Six Sigma is not just a new term for Total Quality Management (TQM) . They have many similarities and are compatible in many business environments. TQM has brought great improvements and value to many companies. Six Sigma can do more.
TQM is the development, deployment, and maintenance of systems related to quality-producing business processes. TQM is a strategic approach that focuses on encouraging a continuous flow of incremental quality improvements. It encourages the establishing of a culture of collaboration among different departments within organization. TQM is mainly a cultural initiative and a style of management toward increased quality.
Six Sigma is not just another quality initiative or process improvement program. It is more than that because it is a robust continuous improvement strategy and process that includes cultural methodologies such as the various TQM approaches. Six Sigma is complementary to TQM initiatives such as ISO 9000 registration, which is mainly procedural; Total Quality Management (TQM), which is mainly cultural, and Statistical Process Control (SPC), which is primarily statistical process control monitoring. All of these initiatives attempt to improve quality levels but typically reach a plateau. The Six Sigma approach goes to the next level.
Six Sigma is not about quality in the strict traditional sense. Quality, defined traditionally as conformance to internal requirements, is not the focus of Six Sigma. True, Six Sigma focuses on improving quality by helping organizations produce products and services better, faster and cheaper. However, it accomplishes that by reducing waste. In traditional terms, Six Sigma focuses on defect prevention, cycle time reduction, and cost savings. Six Sigma is about helping the organization make more money. Unlike cost-cutting programs that reduce value and quality, Six Sigma identifies and eliminates costs that provide no value to customers: the costs incurred due to waste.
The focus of TQM initiatives differs from the focus of Six Sigma programs. One, TQM programs focus on improvement in individual operations with unrelated processes. Six Sigma focuses on making improvements in all operations within a process. Two, Six Sigma involves dedicated, full-time resources—the “black belts” —versus TQM, which is usually a part-time activity of non-dedicated managers.
The breadth and depth and the precision of Six Sigma and TQM also differ. Six Sigma has a well-defined project charter that outlines the scope of a project, financial targets, anticipated benefits, milestones, etc. It's based on hard financial data and savings. In TQM, organizations go into a project without fully knowing what the financial gains might be. Six Sigma has a solid control phase (DMAIC – Define-Measure-Analyze-Improve-Control) that makes specific measurements, identifies specific problems, and provides specific solutions that can be measured.
How else is Six Sigma different? Six Sigma is:
* Fact based and data driven
* Results-oriented, providing quantifiable and measurable bottom-line results
* A leader-sponsored top-down approach
* Linked to strategy
* Thinking about customer requirements
* Applicable to all business processes - administrative, sales, marketing, R&D, etc.
Six Sigma is a robust continuous improvement strategy and process that includes cultural methodologies such as Total Quality Management (TQM), process control strategies such as Statistical Process Control (SPC) and other important statistical tools. Six Sigma tools and techniques all are found in total quality management. Six Sigma is the application of the tools on selected important projects at the appropriate time. Six Sigma tools and techniques all are found in TQM. When done correctly, Six Sigma becomes a way toward organization and cultural development. Yet, it is more than a set of tools! Six Sigma is the strategic and systematic application of the tools on targeted important projects at the appropriate time. Because Six Sigma incorporates TQM but goes beyond it, it will outlast TQM.
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May 31, 2011
May 30, 2011
Lean Logistics (Supply Chain Management)
Supply Chain Management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by the end customers. SCM was developed over time to help effectively coordinate the procurement of parts and materials between organizations that are connected through their supply processes.
Supply Chain Management spans all movement and storage of raw materials, work-in-process and finished goods from the point of origin to the point of consumption.
In today’s domestic and global economies, wholesalers, distributors, manufacturers, retailers, suppliers, and everyone else concerned in the supply chain are under pressure to reduce and balance their costs, time and inventories in order to continue to be profitable while still meeting their customers’ demands. The best way for them to achieve this is to implement lean logistics. Lean logistics are focused on eliminating waste from the internal and external supply chains and this is achieved by reducing excessive inventories, replenishment times and unnecessary costs. Lean supply chains are designed to pull, not push, to replenish inventory levels.
Lean logistics presents a business with several challenges due to the many different hand-offs that are involved when moving items along the supply chain. Global lean logistics particularly has a huge challenge for businesses due to the additional time needed for their shipments to be transported over long distances. On top of that, there are often many different organizations that will be directly involved with each shipment. Some reports state that it requires the involvement of as many as 17 different organizations to deal with one single shipment. These organizations would be the suppliers, terminals, truckers, freight forwarders, customs brokers, railroads, air and ocean carriers, etc. So bringing lean logistics into such a large and extended multi transactional supply chain is not an easy task. It often means that some of those organizations involved are sometimes working together and at odds at the same time with each individual shipping transaction. This leads to additional non-value added activities being generated throughout the supply chain which creates waste (muda).
Today’s, global and domestic economies are forcing companies to change the way they do business. They are utilizing lean logistics in order to support initiatives for cost reductions and quality improvements. Although lean logistics are not easy to implement, they are extremely cost effective and a business that can successfully execute them will receive multiple benefits. When a business is focusing its sights on the global markets, it will need to put together a project team to work on creating a lean logistics system. Doing this upfront will be cost effective because it will help everyone involved to understand the needs of the organization to identify and reduce a number of potential failures occurring throughout the supply chain process.
With the many benefits that lean logistics can bring to a company it is hard to understand why it has not already been implemented by every business. The issue is that some view the work involved as being too big or too difficult to do. Although it isn’t easy, the benefits far out way the difficulties if they take the time to start by developing their own internal system. Later they can extend their process out to other organizations in their supply chain suppliers, customers and end users.
read more »
Supply Chain Management spans all movement and storage of raw materials, work-in-process and finished goods from the point of origin to the point of consumption.
In today’s domestic and global economies, wholesalers, distributors, manufacturers, retailers, suppliers, and everyone else concerned in the supply chain are under pressure to reduce and balance their costs, time and inventories in order to continue to be profitable while still meeting their customers’ demands. The best way for them to achieve this is to implement lean logistics. Lean logistics are focused on eliminating waste from the internal and external supply chains and this is achieved by reducing excessive inventories, replenishment times and unnecessary costs. Lean supply chains are designed to pull, not push, to replenish inventory levels.
Lean logistics presents a business with several challenges due to the many different hand-offs that are involved when moving items along the supply chain. Global lean logistics particularly has a huge challenge for businesses due to the additional time needed for their shipments to be transported over long distances. On top of that, there are often many different organizations that will be directly involved with each shipment. Some reports state that it requires the involvement of as many as 17 different organizations to deal with one single shipment. These organizations would be the suppliers, terminals, truckers, freight forwarders, customs brokers, railroads, air and ocean carriers, etc. So bringing lean logistics into such a large and extended multi transactional supply chain is not an easy task. It often means that some of those organizations involved are sometimes working together and at odds at the same time with each individual shipping transaction. This leads to additional non-value added activities being generated throughout the supply chain which creates waste (muda).
Today’s, global and domestic economies are forcing companies to change the way they do business. They are utilizing lean logistics in order to support initiatives for cost reductions and quality improvements. Although lean logistics are not easy to implement, they are extremely cost effective and a business that can successfully execute them will receive multiple benefits. When a business is focusing its sights on the global markets, it will need to put together a project team to work on creating a lean logistics system. Doing this upfront will be cost effective because it will help everyone involved to understand the needs of the organization to identify and reduce a number of potential failures occurring throughout the supply chain process.
With the many benefits that lean logistics can bring to a company it is hard to understand why it has not already been implemented by every business. The issue is that some view the work involved as being too big or too difficult to do. Although it isn’t easy, the benefits far out way the difficulties if they take the time to start by developing their own internal system. Later they can extend their process out to other organizations in their supply chain suppliers, customers and end users.
read more »
May 29, 2011
Lean Enterprise
Is your company meeting the demands of customers while increasing market share and profits?
It's amazing how many companies actually gloss over the obvious. Many businesses are moving through each day, dealing with one crisis after the next. They've become addicted to using fire fighting techniques to maintain the status quo, Anyone who can consistently step up to put out the fire to save the day is declared a hero. However, the same problems still occur day after day.
How many companies are willing to admit they're failing to meet customer expectations? I've not found many who will say it outright during my years of experience. Most are happy to live in absolute denial and oblivious to the facts until they hit that "pain point of realization". Many companies are facing the most crucial challenge to their very survival. Business and manufacturing technologies of the 20th century are no longer capable of meeting the challenges of the 21st century. Customers are now demanding more from their suppliers. There are many more choices available when deciding if a company is capable of meeting their supply needs.
Many organizations still hold fast to the belief that if they just work harder, they can improve things. This belief is not true. Hard work alone will not cut it in today's global economy. Only when an organization starts to energize its employees, by unleashing their creativity to work smarter will they start to see massive change. Companies, who continue to focus their most valuable resource on survival tactics, by forcing them to work harder, will lose them faster.
Lean Enterprise - Finding solutions to challenges requires a business to find answers to these key questions:
What is the core skills capability within your company that sets it apart from others in your field? How can you best utilize these core skills to focus your business processes? How does a company grow in a highly volatile world market and still meet customer demand? How do you deliver a product or service faster and still maintain an acceptable level of quality? How do you reduce excessive inventory levels and continue to maintain customer satisfaction? How do you reduce operating costs, allowing you to become more competitive?
There is a simple solution to address all of the above questions and it can put your business way ahead of the competition: Become a Lean Enterprise by implementing and integrating lean techniques into your business model. It does not matter if you're a manufacturing or non-manufacturing company. Anyone can use lean techniques to improve their business processes. Lean is a journey. Enjoy the trip.
read more »
It's amazing how many companies actually gloss over the obvious. Many businesses are moving through each day, dealing with one crisis after the next. They've become addicted to using fire fighting techniques to maintain the status quo, Anyone who can consistently step up to put out the fire to save the day is declared a hero. However, the same problems still occur day after day.
How many companies are willing to admit they're failing to meet customer expectations? I've not found many who will say it outright during my years of experience. Most are happy to live in absolute denial and oblivious to the facts until they hit that "pain point of realization". Many companies are facing the most crucial challenge to their very survival. Business and manufacturing technologies of the 20th century are no longer capable of meeting the challenges of the 21st century. Customers are now demanding more from their suppliers. There are many more choices available when deciding if a company is capable of meeting their supply needs.
Many organizations still hold fast to the belief that if they just work harder, they can improve things. This belief is not true. Hard work alone will not cut it in today's global economy. Only when an organization starts to energize its employees, by unleashing their creativity to work smarter will they start to see massive change. Companies, who continue to focus their most valuable resource on survival tactics, by forcing them to work harder, will lose them faster.
Lean Enterprise - Finding solutions to challenges requires a business to find answers to these key questions:
What is the core skills capability within your company that sets it apart from others in your field? How can you best utilize these core skills to focus your business processes? How does a company grow in a highly volatile world market and still meet customer demand? How do you deliver a product or service faster and still maintain an acceptable level of quality? How do you reduce excessive inventory levels and continue to maintain customer satisfaction? How do you reduce operating costs, allowing you to become more competitive?
There is a simple solution to address all of the above questions and it can put your business way ahead of the competition: Become a Lean Enterprise by implementing and integrating lean techniques into your business model. It does not matter if you're a manufacturing or non-manufacturing company. Anyone can use lean techniques to improve their business processes. Lean is a journey. Enjoy the trip.
read more »
May 28, 2011
Lean Office
What Are Lean Office Practices?
Many business owners who continue to struggle in today’s economy have probably not heard about the successful companies who have avoided the same fate. What did they do that was so different?
They took the time to learn how to implement lean principles to improve their business practices and service to all of their customers. They have achieved improvements in employee morale, business performance and profits. Of course, many business owners only implement lean principles on the shop floor and in doing so miss an incredible opportunity to transform their entire business. What should they be doing instead? Well, many companies are realizing that lean principles are not just limited to use on the shop floor, they are now looking at using these same ideas to improve their administrative processes. Every manufacturing process requires paperwork (such as a customer order or production traveler) to schedule the manufacturing processes. For example, shop floor employees can make the products in hours, but it often takes days or weeks to generate the documentation to initiate the manufacturing process. How to take the next step towards improving this situation leaves business owners with many questions and few answers.
Next, here are some questions and answers. Remember, these answers are personal opinions, so please use your own discretion before using the information.
1. Is it possible to implement a lean office system into a small company?
Lean is not, nor has it ever been exclusive to large companies. Waste exists inside every business, no matter what their field of expertise or size of the company. Many administrative activities such as, engineering approvals, invoicing, order processing, purchasing and human relations can be improved using lean principles. A lean office system will deliver real results that everyone will be able to see. It will improve employee morale, job satisfaction and customer confidence. It is easy to apply lean principles into any business environment. A business owner requires is a sense of urgency and the commitment to do it.
2. Is there a standardized system for a lean business office?
There is no actual standardized model or system for a lean business office. There are companies who have successfully created their own lean administrative systems based on their own situational needs. If it were possible to obtain the implementation procedures from these companies, their office designs would help other organizations to benchmark their own processes. Some authors use case studies of companies who documented their lean office implementation process. These books can be a great source of information and ideas to get someone started.
3. What does a lean office actually look like?
Well, it depends on your business needs. It would be easy to recognize a lean office in comparison to a traditional office. It would be easy to recognize some of the more obvious lean techniques. A lean business office would be very organized because it would have implemented a 5S system. It would use “visual management” such as color-coding to allow the documents to be easily archived and retrieved as needed. Files would be located to eliminate or minimize the amount of walking by office employees. The workload is balanced and flowing throughout the office and paperwork piles would be nonexistent.
It will take some trial and error to develop the ideal lean office system. However, implementing a lean administrative process might be necessary to take your business to the next level!
read more »
Many business owners who continue to struggle in today’s economy have probably not heard about the successful companies who have avoided the same fate. What did they do that was so different?
They took the time to learn how to implement lean principles to improve their business practices and service to all of their customers. They have achieved improvements in employee morale, business performance and profits. Of course, many business owners only implement lean principles on the shop floor and in doing so miss an incredible opportunity to transform their entire business. What should they be doing instead? Well, many companies are realizing that lean principles are not just limited to use on the shop floor, they are now looking at using these same ideas to improve their administrative processes. Every manufacturing process requires paperwork (such as a customer order or production traveler) to schedule the manufacturing processes. For example, shop floor employees can make the products in hours, but it often takes days or weeks to generate the documentation to initiate the manufacturing process. How to take the next step towards improving this situation leaves business owners with many questions and few answers.
Next, here are some questions and answers. Remember, these answers are personal opinions, so please use your own discretion before using the information.
1. Is it possible to implement a lean office system into a small company?
Lean is not, nor has it ever been exclusive to large companies. Waste exists inside every business, no matter what their field of expertise or size of the company. Many administrative activities such as, engineering approvals, invoicing, order processing, purchasing and human relations can be improved using lean principles. A lean office system will deliver real results that everyone will be able to see. It will improve employee morale, job satisfaction and customer confidence. It is easy to apply lean principles into any business environment. A business owner requires is a sense of urgency and the commitment to do it.
2. Is there a standardized system for a lean business office?
There is no actual standardized model or system for a lean business office. There are companies who have successfully created their own lean administrative systems based on their own situational needs. If it were possible to obtain the implementation procedures from these companies, their office designs would help other organizations to benchmark their own processes. Some authors use case studies of companies who documented their lean office implementation process. These books can be a great source of information and ideas to get someone started.
3. What does a lean office actually look like?
Well, it depends on your business needs. It would be easy to recognize a lean office in comparison to a traditional office. It would be easy to recognize some of the more obvious lean techniques. A lean business office would be very organized because it would have implemented a 5S system. It would use “visual management” such as color-coding to allow the documents to be easily archived and retrieved as needed. Files would be located to eliminate or minimize the amount of walking by office employees. The workload is balanced and flowing throughout the office and paperwork piles would be nonexistent.
It will take some trial and error to develop the ideal lean office system. However, implementing a lean administrative process might be necessary to take your business to the next level!
read more »
May 27, 2011
World Class Manufacturing
World Class Manufacturing is a very different set of ideas, principles, thoughts, policies and techniques for operating and managing a manufacturing company. World Class Manufacturing concepts were developed as the United States influenced the resurrection of Japanese manufacturing industries after World War II. It adopts many of the innovative ideas that were developed and used by the Japanese electronics, automotive, and steel companies to increase their competitive edge. Primarily, it focuses on using the concept of “kaizen” to improve cost, quality, lead time, customer service and manufacturing flexibility.
World Class Manufacturing is a process approach which typically includes these techniques and philosophies; Quick Changeovers (SMED), Statistical Process Control (SPC), Just in Time (JIT), Visual Management, Streamlined Flow, Small lot sizes, Cross Functional Teams, Employee Empowerment, Part Families, Reducing Process Variation, Cellular Manufacturing, Zero Defects, and Total Preventive Maintenance (TPM).
Companies taking part in World Class Manufacturing strategies tend to focus on improving their operations, and to attempt to eliminate waste to create a lean business system. This approach results in higher productivity and better profits. However, these businesses will also focus on increasing the velocity of their total order volume to improve delivery without relying of excessive or increasing inventory levels. Sequential methods of performing work are being replaced with synchronized manufacturing methods to speed up the operations to compress time, and hierarchical departmentalized functions are being replaced by self directed work teams.
World Class Manufacturing is a process focused approach using teams to improve all the manufacturing operations. World Class Manufacturing techniques contradict many of the traditional manufacturing concepts, which were developed during the industrial revolution. The implementation of world class techniques will often bring up resistance to change with management and employees. Resistance to change is often supported by the statement "we've always done it this way". The most resistance is often found in the lower and middle management levels. A process for change has to be implemented with the full participation of management and employees working together.
Capital investment is another huge issue for management teams. World Class Manufacturing has the approach of “use creativity before capital". However, sometimes improvements can be financially justified. This would be true, especially when improved methods require an organization to purchase new technology or equipment to achieve quick changeovers, more efficient cycle times, and give more flexibility in their operations. Executives will often choose to take the option to save on costs but this can be short sighted. They will become equally frustrated with the less than desirable outcome as a consequence of not financially supporting the improvements.
Like everything else, World Class Manufacturing is not a universal remedy or silver bullet, nor should it be. It is an operational approach that, if used correctly, it will provide new insights and allows a business to become more competitive in global markets. It is the ideal system to quickly design and develop new, higher quality products at lower costs, as well as delivering them with shorter lead times and better manufacturing processes.
read more »
World Class Manufacturing is a process approach which typically includes these techniques and philosophies; Quick Changeovers (SMED), Statistical Process Control (SPC), Just in Time (JIT), Visual Management, Streamlined Flow, Small lot sizes, Cross Functional Teams, Employee Empowerment, Part Families, Reducing Process Variation, Cellular Manufacturing, Zero Defects, and Total Preventive Maintenance (TPM).
Companies taking part in World Class Manufacturing strategies tend to focus on improving their operations, and to attempt to eliminate waste to create a lean business system. This approach results in higher productivity and better profits. However, these businesses will also focus on increasing the velocity of their total order volume to improve delivery without relying of excessive or increasing inventory levels. Sequential methods of performing work are being replaced with synchronized manufacturing methods to speed up the operations to compress time, and hierarchical departmentalized functions are being replaced by self directed work teams.
World Class Manufacturing is a process focused approach using teams to improve all the manufacturing operations. World Class Manufacturing techniques contradict many of the traditional manufacturing concepts, which were developed during the industrial revolution. The implementation of world class techniques will often bring up resistance to change with management and employees. Resistance to change is often supported by the statement "we've always done it this way". The most resistance is often found in the lower and middle management levels. A process for change has to be implemented with the full participation of management and employees working together.
Capital investment is another huge issue for management teams. World Class Manufacturing has the approach of “use creativity before capital". However, sometimes improvements can be financially justified. This would be true, especially when improved methods require an organization to purchase new technology or equipment to achieve quick changeovers, more efficient cycle times, and give more flexibility in their operations. Executives will often choose to take the option to save on costs but this can be short sighted. They will become equally frustrated with the less than desirable outcome as a consequence of not financially supporting the improvements.
Like everything else, World Class Manufacturing is not a universal remedy or silver bullet, nor should it be. It is an operational approach that, if used correctly, it will provide new insights and allows a business to become more competitive in global markets. It is the ideal system to quickly design and develop new, higher quality products at lower costs, as well as delivering them with shorter lead times and better manufacturing processes.
read more »
May 25, 2011
Doing lean yourself
What Is Lean Training?
The concept of Just in Time (JIT) and lean manufacturing training methods have been attributed to Henry Ford, who started researching and developing more efficient production methods in 1910. Ford created an automobile manufacturing system to build the Model T that was called a moving assembly line. The introduction of Ford’s production system at the Highland Park Plant took production output from 19,000 cars in 1910 to 78,440 by 1912. Ford was producing one Model T every 12 hours. His methods were so successful that Ford soon became one of the richest men in the United States. How did Henry Ford deliver lean training to his employees?
One of the main problems facing Ford was that many of his workers were unable to read or write, and many were immigrants who did not speak English. Ford decided to divide the labor into small repeatable tasks, and each employee received on the job lean training, learning through a process of direct observation and practice. His version of lean training took a long time, especially if an employee did not speak English. Each Ford worker was a specialist and trained to perform a specific task. The work was so repetitive and monotonous that employee morale was low and many workers quit their jobs after a few months. This affected the production numbers because it took time to train new employees and get them up to speed. Some estimates say Ford was spending as much as $100 to train each new employee, which was a considerable sum of money at the time. How did Henry Ford deal with his employee morale and training problems?
Henry Ford introduced a series of employee incentives. He believed these would allow him to retain his skilled employees and be able to encourage the best people to work for him. His main incentive was to introduce a profit sharing plan which increased an employee’s wages to $5 a day, which was double the acceptable pay rate at that time. Ford’s employee turnover and absenteeism problems soon disappeared. He introduced classes to teach English, math, and writing skills to his employees. This created a more stable and skilled workforce which increased productivity and reduced production costs. Between 1914 and 1916, Ford’s profits doubled from $30 million to $60 million, and he could produce a car at the rate of one every 93 minutes. By the year 1920 Ford could manufacture one car every 60 seconds.
After World War II, Toyota, a Japanese car manufacturer was making new strides by adopting many of Henry Ford’s ideas and developing them to a new level. Just like Henry Ford, Toyota realized that the success of their business was rooted in the skill and attitude of their employees towards producing a quality product. Toyota moved its business focus to become people centric. This led to employees receiving Just in Time (JIT) or lean training from experts in their field. Eventually, Toyota developed offline classrooms within their facilities to deliver lean training to their employees before being allowed to work on the assembly line. Toyota believed that by doing this, their employees would become more productive and quality focused. Their belief was correct! Today, Toyota’s manufacturing methods, known as the Toyota Production System (TPS), have become accepted as a world class standard for Just in Time (JIT) and lean training throughout every industry. Before you sign up for any lean training courses make sure the foundation for the training program is based on methods from the Toyota Production System (TPS).
read more »
The concept of Just in Time (JIT) and lean manufacturing training methods have been attributed to Henry Ford, who started researching and developing more efficient production methods in 1910. Ford created an automobile manufacturing system to build the Model T that was called a moving assembly line. The introduction of Ford’s production system at the Highland Park Plant took production output from 19,000 cars in 1910 to 78,440 by 1912. Ford was producing one Model T every 12 hours. His methods were so successful that Ford soon became one of the richest men in the United States. How did Henry Ford deliver lean training to his employees?
One of the main problems facing Ford was that many of his workers were unable to read or write, and many were immigrants who did not speak English. Ford decided to divide the labor into small repeatable tasks, and each employee received on the job lean training, learning through a process of direct observation and practice. His version of lean training took a long time, especially if an employee did not speak English. Each Ford worker was a specialist and trained to perform a specific task. The work was so repetitive and monotonous that employee morale was low and many workers quit their jobs after a few months. This affected the production numbers because it took time to train new employees and get them up to speed. Some estimates say Ford was spending as much as $100 to train each new employee, which was a considerable sum of money at the time. How did Henry Ford deal with his employee morale and training problems?
Henry Ford introduced a series of employee incentives. He believed these would allow him to retain his skilled employees and be able to encourage the best people to work for him. His main incentive was to introduce a profit sharing plan which increased an employee’s wages to $5 a day, which was double the acceptable pay rate at that time. Ford’s employee turnover and absenteeism problems soon disappeared. He introduced classes to teach English, math, and writing skills to his employees. This created a more stable and skilled workforce which increased productivity and reduced production costs. Between 1914 and 1916, Ford’s profits doubled from $30 million to $60 million, and he could produce a car at the rate of one every 93 minutes. By the year 1920 Ford could manufacture one car every 60 seconds.
After World War II, Toyota, a Japanese car manufacturer was making new strides by adopting many of Henry Ford’s ideas and developing them to a new level. Just like Henry Ford, Toyota realized that the success of their business was rooted in the skill and attitude of their employees towards producing a quality product. Toyota moved its business focus to become people centric. This led to employees receiving Just in Time (JIT) or lean training from experts in their field. Eventually, Toyota developed offline classrooms within their facilities to deliver lean training to their employees before being allowed to work on the assembly line. Toyota believed that by doing this, their employees would become more productive and quality focused. Their belief was correct! Today, Toyota’s manufacturing methods, known as the Toyota Production System (TPS), have become accepted as a world class standard for Just in Time (JIT) and lean training throughout every industry. Before you sign up for any lean training courses make sure the foundation for the training program is based on methods from the Toyota Production System (TPS).
read more »
May 22, 2011
Benefits Of Six Sigma
Although six sigma promises many potential benefits still it is very important to understand them before going to start six sigma projects in your organization.
Being a vital part of any six sigma methodology, it is very important to choose the right six sigma project. Six sigma projects are identified in an organization by considering its strategic direction and impacts on the bottom-line and customer satisfaction. Weigh the pros and cons properly and make sure that you have taken all constraints into consideration. Below things should be kept in mind before selecting any six sigma project:
Remember, not all projects have the potential to save same amount of money. Make sure that the project you are choosing is capable of giving you long-term benefits and has the ability to induce further improvements in other projects of your organization.
Be careful while choosing the six sigma team for your project. This team should be strong as it has to lead the project towards success. Perform proper cost benefits analysis and then decide if you should recruit black belts from some outside resource or use the in-house team. Long term benefits and affordability are two key factors that should be kept in mind while selecting a project and its team.
In order to get best results it is important to sub-divide the project into two or more smaller six sigma projects. These projects will handle the strategic, tactical as well as operational aspects of the project.
Monitor the project regularly and make sure that it does not deviate from the track.
Being an effective process improvement strategy, six sigma projects promises many potential benefits to the organization that uses them. Ranging from financial to organizational and operational, six sigma projects carry their own individual benefits.
Financial Benefits: The financial benefits include:
1- The cost is reduced by decrease in the cost of production and services.
2- The profitability as well as productivity of existing products and services is increased.
3- There is an increase in cash flow due to additional revenue generation.
4- The cost avoidance factor is enabled.
5- Current revenue is increased or additional revenue is produced.
6- Organizations get fast return on investment.
7- Risk management.
Operational Benefits: The operational benefits of six sigma projects include:
1- The employee's workload is reduced.
2- The employee satisfaction level is increased due to improvements in the workflow.
3- Non-value-added services and activities are eliminated.
4- Team spirit is increased.
5- Internal communication within the organization is improved.
5- Processes are simplified and improved.
read more »
Being a vital part of any six sigma methodology, it is very important to choose the right six sigma project. Six sigma projects are identified in an organization by considering its strategic direction and impacts on the bottom-line and customer satisfaction. Weigh the pros and cons properly and make sure that you have taken all constraints into consideration. Below things should be kept in mind before selecting any six sigma project:
Remember, not all projects have the potential to save same amount of money. Make sure that the project you are choosing is capable of giving you long-term benefits and has the ability to induce further improvements in other projects of your organization.
Be careful while choosing the six sigma team for your project. This team should be strong as it has to lead the project towards success. Perform proper cost benefits analysis and then decide if you should recruit black belts from some outside resource or use the in-house team. Long term benefits and affordability are two key factors that should be kept in mind while selecting a project and its team.
In order to get best results it is important to sub-divide the project into two or more smaller six sigma projects. These projects will handle the strategic, tactical as well as operational aspects of the project.
Monitor the project regularly and make sure that it does not deviate from the track.
Being an effective process improvement strategy, six sigma projects promises many potential benefits to the organization that uses them. Ranging from financial to organizational and operational, six sigma projects carry their own individual benefits.
Financial Benefits: The financial benefits include:
1- The cost is reduced by decrease in the cost of production and services.
2- The profitability as well as productivity of existing products and services is increased.
3- There is an increase in cash flow due to additional revenue generation.
4- The cost avoidance factor is enabled.
5- Current revenue is increased or additional revenue is produced.
6- Organizations get fast return on investment.
7- Risk management.
Operational Benefits: The operational benefits of six sigma projects include:
1- The employee's workload is reduced.
2- The employee satisfaction level is increased due to improvements in the workflow.
3- Non-value-added services and activities are eliminated.
4- Team spirit is increased.
5- Internal communication within the organization is improved.
5- Processes are simplified and improved.
read more »
May 21, 2011
Kanban Boards
What are kanban boards?
a kanban board is a physical chart located in a central area of a manufacturing plant. It is designed to keep project goals and tasks highly visible for all team members. Kanban boards are arranged in rows and columns, with each column or row representing a specific goal, project, or team member. Cards or tickets are placed in this grid system to represent steps or tasks related to each of these goals. Simple projects may require only a dozen cards, while complex projects may involve hundreds of kanban cards.
Kanban boards are a common tool used in lean manufacturing. During lean, or just-in-time manufacturing, companies strive to minimize waste in terms of materials, equipment, and time. Manufacturers who utilize this strategy focus on ensuring that every dollar and minute spent in production results in a profit. Kanban boards, which are named after a Japanese term for billboard or sign, help these companies optimize scheduling and task lists.
The cards used on kanban boards are often color coded so team members can easily sort through tasks. High-priority jobs may be written on red cards, for example, while a specific employee may look for green cards to find his responsibilities. The cards may be self sticking, or may fit into slots built into each board. As tasks are completed or adjusted, the card is moved off the board or placed in a separate section. New tasks can be added at anytime simply by adding a new card.
Some companies use virtual kanban boards instead of physical ones to facilitate communication. Manufacturers rely on special project-planning software to create these boards, which often closely resemble their physical counterparts. Users can add or remove tasks with the click of a mouse, or even drag and drop cards to different parts of the board. This type of application serves as an effective way for team members in different locations to work together on a project.
Kanban boards are designed to eliminate roadblocks in manufacturing and keep all team members on the same page. They serve as a continuous reminder of tasks should be completed to meet the goals of the company. Employees are not left confused or unclear about the order in which tasks should be performed, so they are better equipped to perform their jobs. Like lean manufacturing, kanban boards are designed to eliminate waste and maximize productivity and profit.
read more »
a kanban board is a physical chart located in a central area of a manufacturing plant. It is designed to keep project goals and tasks highly visible for all team members. Kanban boards are arranged in rows and columns, with each column or row representing a specific goal, project, or team member. Cards or tickets are placed in this grid system to represent steps or tasks related to each of these goals. Simple projects may require only a dozen cards, while complex projects may involve hundreds of kanban cards.
Kanban boards are a common tool used in lean manufacturing. During lean, or just-in-time manufacturing, companies strive to minimize waste in terms of materials, equipment, and time. Manufacturers who utilize this strategy focus on ensuring that every dollar and minute spent in production results in a profit. Kanban boards, which are named after a Japanese term for billboard or sign, help these companies optimize scheduling and task lists.
The cards used on kanban boards are often color coded so team members can easily sort through tasks. High-priority jobs may be written on red cards, for example, while a specific employee may look for green cards to find his responsibilities. The cards may be self sticking, or may fit into slots built into each board. As tasks are completed or adjusted, the card is moved off the board or placed in a separate section. New tasks can be added at anytime simply by adding a new card.
Some companies use virtual kanban boards instead of physical ones to facilitate communication. Manufacturers rely on special project-planning software to create these boards, which often closely resemble their physical counterparts. Users can add or remove tasks with the click of a mouse, or even drag and drop cards to different parts of the board. This type of application serves as an effective way for team members in different locations to work together on a project.
Kanban boards are designed to eliminate roadblocks in manufacturing and keep all team members on the same page. They serve as a continuous reminder of tasks should be completed to meet the goals of the company. Employees are not left confused or unclear about the order in which tasks should be performed, so they are better equipped to perform their jobs. Like lean manufacturing, kanban boards are designed to eliminate waste and maximize productivity and profit.
read more »
May 15, 2011
How to Improve Your Leadership
A lot of management competencies have been developed through excellent research over the years. They provide a good solid foundation for developing management skills and improving performance. However they sometimes feel intangible or abstract so when I'm working with managers I try to ground those theories in a bit of reality. For example, I sometimes use a very simple exercise to help clarify to the managers which are the most important skills and behaviours they need in their organisations. Answer the questions as they pertain to your company, your team and your experiences:
Think about the best managers you have ever worked for and ask yourself these questions. What made them the best? Why? What did they say? What did they do? What did they not do? How did they make you feel?
Write down a list of all the things you thought of. Describe the things you saw, felt and heard. Be specific, focus on behaviours and events. Why do these things stand out in your mind?
Now think about your own management style when you are working with your employees. How many of these things are a reflection of you? What would your employees say about you? How would they answer the questions above? How do you make them feel?
Would they say the same things about you? If yes, then you're probably on the right track. If they say something different or unexpected, then these things may be opportunities to develop your skills.
There are a couple of important caveats to remember though,
Each of your employees is different. The things they value in the way they want to be treated and managed will vary. So spending time getting to know your team is equally important. The most successful managers know their people and they understand what their people will respond to best.
You can't be everything to everyone, if you have to choose one or two areas to focus on, what would those be?
Organisations have personalities, cultures and values. Think about the things that you do, that your organisation values in you. How does that translate to your team?
Key in your toolbox is your ability to flex and adapt your style as needed
By using these simple questions, you can quite quickly recognise the things that matter most to yourself, your team and your organisation. Armed with this information you can now make informed choices about the areas you might want to focus on for development. Use a mentor or a coach to soundboard and challenge your thinking and behaviours. Before you realise it, you will be on your way to being the best!
read more »
Think about the best managers you have ever worked for and ask yourself these questions. What made them the best? Why? What did they say? What did they do? What did they not do? How did they make you feel?
Write down a list of all the things you thought of. Describe the things you saw, felt and heard. Be specific, focus on behaviours and events. Why do these things stand out in your mind?
Now think about your own management style when you are working with your employees. How many of these things are a reflection of you? What would your employees say about you? How would they answer the questions above? How do you make them feel?
Would they say the same things about you? If yes, then you're probably on the right track. If they say something different or unexpected, then these things may be opportunities to develop your skills.
There are a couple of important caveats to remember though,
Each of your employees is different. The things they value in the way they want to be treated and managed will vary. So spending time getting to know your team is equally important. The most successful managers know their people and they understand what their people will respond to best.
You can't be everything to everyone, if you have to choose one or two areas to focus on, what would those be?
Organisations have personalities, cultures and values. Think about the things that you do, that your organisation values in you. How does that translate to your team?
Key in your toolbox is your ability to flex and adapt your style as needed
By using these simple questions, you can quite quickly recognise the things that matter most to yourself, your team and your organisation. Armed with this information you can now make informed choices about the areas you might want to focus on for development. Use a mentor or a coach to soundboard and challenge your thinking and behaviours. Before you realise it, you will be on your way to being the best!
read more »
Important of Employee Empowerment
Employee empowerment defined as the creation of an environment in which people at all levels feel they have real influence over standards of quality, service, and business effectiveness within their areas of responsibility. It is a strategy and philosophy that enables employees to make decisions about their jobs. In an organization where this style of management is not natural, adopting a management style that embraces empowerment will be a difficult but critical change in order to succeed in the effort of implementing Lean Enterprise Thinking.
Organizations that support empowered people have some common characteristics:
- Wide spans of control exist with relative responsibilities and accountabilities
- A process-based organization structure is used as opposed to a purely functional based structure
- Management stands behind people being empowered
- There are few management layers in the organization
Most experts who are familiar with implementing Lean in an organization will probably state something to the effect of "... the major inhibitor to get a lean environment is the inability to trust the workforce and really give up a certain level of control in order to give people the power to implement their own ideas and be respected as experts in their area..." .
Without this level of trust within the workforce, those who know best how to improve the operation will not feel they can make the changes required to eliminate all of the waste possible and the thought of continuous improvement will not become a way of thinking as it must for Lean to be truly successful.
Empowering the workforce does not mean that management gives up control and lets people do whatever they please. Instead, guidelines and boundaries need to be set so that everyone knows the limits of how they can operate. A process needs to be established that allows management to set the direction for the organization but lets the workforce finds unique ways to achieve these goals and objectives. By letting the workforce be free to implement ideas within their work areas, management will find that the organization is much more productive than by following the direction of a few select individuals. The trick is to leverage one's self though the talents of everyone involved.
The process of adapting an empowerment style of operating within the organization is not solely the responsibility of management. True, a manager needs to learn to let go without giving up total control, but in order for empowerment to work, the employee must accept it and the responsibility that goes with it. In short - they have to take it. However, not all are willing or able to do, or they do not know how and what it means, so care must be taken to educate and transition those involved.
Changing to a mode of operating that truly empowers the members of an organization is a difficult transition to make but is one that can be accomplished. It does take time and having a coach can be a real help. Everyone involved should be patient and realize that the organization is learning a new way to operate, but once it is successful with this transition, the organization will have taken a major step towards to Being Lean and not just Doing Lean.
read more »
Organizations that support empowered people have some common characteristics:
- Wide spans of control exist with relative responsibilities and accountabilities
- A process-based organization structure is used as opposed to a purely functional based structure
- Management stands behind people being empowered
- There are few management layers in the organization
Most experts who are familiar with implementing Lean in an organization will probably state something to the effect of "... the major inhibitor to get a lean environment is the inability to trust the workforce and really give up a certain level of control in order to give people the power to implement their own ideas and be respected as experts in their area..." .
Without this level of trust within the workforce, those who know best how to improve the operation will not feel they can make the changes required to eliminate all of the waste possible and the thought of continuous improvement will not become a way of thinking as it must for Lean to be truly successful.
Empowering the workforce does not mean that management gives up control and lets people do whatever they please. Instead, guidelines and boundaries need to be set so that everyone knows the limits of how they can operate. A process needs to be established that allows management to set the direction for the organization but lets the workforce finds unique ways to achieve these goals and objectives. By letting the workforce be free to implement ideas within their work areas, management will find that the organization is much more productive than by following the direction of a few select individuals. The trick is to leverage one's self though the talents of everyone involved.
The process of adapting an empowerment style of operating within the organization is not solely the responsibility of management. True, a manager needs to learn to let go without giving up total control, but in order for empowerment to work, the employee must accept it and the responsibility that goes with it. In short - they have to take it. However, not all are willing or able to do, or they do not know how and what it means, so care must be taken to educate and transition those involved.
Changing to a mode of operating that truly empowers the members of an organization is a difficult transition to make but is one that can be accomplished. It does take time and having a coach can be a real help. Everyone involved should be patient and realize that the organization is learning a new way to operate, but once it is successful with this transition, the organization will have taken a major step towards to Being Lean and not just Doing Lean.
read more »
May 10, 2011
Process Excellence
At any given time most companies have numerous activities underway to improve their operations. For example, the company might be pursuing one or more of the following:
1- TQM
2- Lean manufacturing
3- Kaizen
4- Business process reengineering
5- Theory of constraints
6- Variation reduction
The list can be extended indefinitely. Six Sigma can't simply be thrown into the mix without causing tremendous confusion. People will find themselves in conflict with one another over jurisdiction, resources, and authority. Leadership must give careful thought as to how the various overlapping activities can best be organized to optimize their impact on performance. An "umbrella concept" often provides the needed guidance to successfully integrate the different but related efforts. One concept that I've found to be particularly useful is that of "Process Excellence," or PE.
What is Process Excellence?
Organizations are typically designed along functional lines. Functions, such as engineering, marketing, accounting, manufacturing, and so on are assigned responsibility for certain tasks. The functions tend to correspond closely to university degree programs. Persons with higher education in a functional area specialize in the work assigned to the function. General management allocates resources to each function based on the needs of the enterprise.
If the enterprise is to be successful the "needs of the enterprise" must be based on the needs of its customers. However, customers typically obtain value not from organizational functions but from products or services that are created by the cooperative efforts and resources of many different functional areas. Most customers could care less about how the enterprise creates the values they are purchasing. A similar discussion applies to owners and shareholders. In fact, there is a substantial body of opinion among management experts that focusing internally on functional concerns can be detrimental to the enterprise as a whole. An alternative is to focus on the process or value stream that creates and delivers value.
A process focus means that stakeholder values are defined and activities are classified as either relating to the creation of the final value (value-added activity) or not (non-value added activity.) Processes are evaluated on how effectively and efficiently they create value. Effectiveness is defined as delivering what the customer requires, or exceeding the requirements; it encompasses quality, price, delivery, timeliness and everything else that goes into perceived value. Efficiency is defined as being effective using a minimum of resources; more of an owner's perspective. Excellent processes are those that are both effective and efficient.
PE is the set of activities specifically designed to create excellent processes. PE is change-oriented and cross-functional. It includes Six Sigma, all of the initiatives listed earlier, and many more as well. By creating a top-level position for PE, leadership assigns clear responsibility for this important work. The PE Leader, usually a Vice-President, leads a Process Excellence Leadership Team (PELT) which includes functional leaders as well as full-time PE personnel such as the Director of Six Sigma. The VP of PE isn't responsible for a particular processes, but she has the authority to identify key processes and nominate owners for approval by the CEO or the PELT. Examples of processes include:
Order fulfillment
Coordinating improvement activities of Six Sigma, Lean, etc.
Customer contact with the company
Handling public relations emergencies
Getting ideas for improvement projects
Matching improvement projects with customer needs
Innovating
Communicating with the outside world
Communicating internally
Identifying talent
Handling customer problems
Avoiding legal disputes
In other words, the VP of Process Excellence has a "meta-process" responsibility. He is responsible for the process of identifying and improving processes. PE activities such as Six Sigma, Lean, etc. provide PE with resources to direct toward the organization's goal of developing internal processes that give them a competitive advantage in securing the best employees, delivering superior customer value, and earning a premium return for its investors.
read more »
1- TQM
2- Lean manufacturing
3- Kaizen
4- Business process reengineering
5- Theory of constraints
6- Variation reduction
The list can be extended indefinitely. Six Sigma can't simply be thrown into the mix without causing tremendous confusion. People will find themselves in conflict with one another over jurisdiction, resources, and authority. Leadership must give careful thought as to how the various overlapping activities can best be organized to optimize their impact on performance. An "umbrella concept" often provides the needed guidance to successfully integrate the different but related efforts. One concept that I've found to be particularly useful is that of "Process Excellence," or PE.
What is Process Excellence?
Organizations are typically designed along functional lines. Functions, such as engineering, marketing, accounting, manufacturing, and so on are assigned responsibility for certain tasks. The functions tend to correspond closely to university degree programs. Persons with higher education in a functional area specialize in the work assigned to the function. General management allocates resources to each function based on the needs of the enterprise.
If the enterprise is to be successful the "needs of the enterprise" must be based on the needs of its customers. However, customers typically obtain value not from organizational functions but from products or services that are created by the cooperative efforts and resources of many different functional areas. Most customers could care less about how the enterprise creates the values they are purchasing. A similar discussion applies to owners and shareholders. In fact, there is a substantial body of opinion among management experts that focusing internally on functional concerns can be detrimental to the enterprise as a whole. An alternative is to focus on the process or value stream that creates and delivers value.
A process focus means that stakeholder values are defined and activities are classified as either relating to the creation of the final value (value-added activity) or not (non-value added activity.) Processes are evaluated on how effectively and efficiently they create value. Effectiveness is defined as delivering what the customer requires, or exceeding the requirements; it encompasses quality, price, delivery, timeliness and everything else that goes into perceived value. Efficiency is defined as being effective using a minimum of resources; more of an owner's perspective. Excellent processes are those that are both effective and efficient.
PE is the set of activities specifically designed to create excellent processes. PE is change-oriented and cross-functional. It includes Six Sigma, all of the initiatives listed earlier, and many more as well. By creating a top-level position for PE, leadership assigns clear responsibility for this important work. The PE Leader, usually a Vice-President, leads a Process Excellence Leadership Team (PELT) which includes functional leaders as well as full-time PE personnel such as the Director of Six Sigma. The VP of PE isn't responsible for a particular processes, but she has the authority to identify key processes and nominate owners for approval by the CEO or the PELT. Examples of processes include:
Order fulfillment
Coordinating improvement activities of Six Sigma, Lean, etc.
Customer contact with the company
Handling public relations emergencies
Getting ideas for improvement projects
Matching improvement projects with customer needs
Innovating
Communicating with the outside world
Communicating internally
Identifying talent
Handling customer problems
Avoiding legal disputes
In other words, the VP of Process Excellence has a "meta-process" responsibility. He is responsible for the process of identifying and improving processes. PE activities such as Six Sigma, Lean, etc. provide PE with resources to direct toward the organization's goal of developing internal processes that give them a competitive advantage in securing the best employees, delivering superior customer value, and earning a premium return for its investors.
read more »
Customer Needs
It is easy to make assumptions about what customers want and need. Interviewing customers provides the team with up-to-date information on customer priorities, clarifies likes and dislikes, and identifies emerging opportunities.
Keys to success:
Always talk directly to the customers – never assume you know their needs
Prioritize customer needs above internal needs
Be specific, and clearly state the desired customer outcomes
Communicate customer needs to all employees
Frequent mistakes made:
Team prioritizes internal needs rather than customer needs
The biggest mistake made by teams who do not interview their customers is to focus on internal needs rather than customer needs. Example: An office service group for small business owners decides to improve work efficiency; so they fire their dedicated word processing specialist and hire an individual who will do administrative work as well as word processing. Customers are irate because they want a dedicated person to handle their word processing needs. The office staff decision has made their workplace more efficient but lost customers in the process!
Team fails to update assumptions about customer needs
Customer needs change. Without talking to them, we live in the past and don’t discover these emerging needs. Team members say, "But we talk to our customers all the time." Yes, but the conversations are about immediate needs and services rather than inquiries about level of satisfaction and emerging needs. Example: A state agency wants to improve the quality of a report that they produce for the legislature. But after interviewing customers, they discover that the legislature no longer wants this report! Customer data helps teams discover new opportunities, verify the extent of a problem, better understand how products and services are used, prevent problems that impact the customer, and prioritize the work of the team.
Multiple customers have conflicting and competing needs
Individuals in an organization serve different customers. The needs of these customers are sometimes in conflict. When this happens. Internal departments compete with one another to meet the needs of their diverse customers. Interviewing customers will help the team look at the total picture and determine which priorities meet the needs of all their customers.
read more »
Keys to success:
Always talk directly to the customers – never assume you know their needs
Prioritize customer needs above internal needs
Be specific, and clearly state the desired customer outcomes
Communicate customer needs to all employees
Frequent mistakes made:
Team prioritizes internal needs rather than customer needs
The biggest mistake made by teams who do not interview their customers is to focus on internal needs rather than customer needs. Example: An office service group for small business owners decides to improve work efficiency; so they fire their dedicated word processing specialist and hire an individual who will do administrative work as well as word processing. Customers are irate because they want a dedicated person to handle their word processing needs. The office staff decision has made their workplace more efficient but lost customers in the process!
Team fails to update assumptions about customer needs
Customer needs change. Without talking to them, we live in the past and don’t discover these emerging needs. Team members say, "But we talk to our customers all the time." Yes, but the conversations are about immediate needs and services rather than inquiries about level of satisfaction and emerging needs. Example: A state agency wants to improve the quality of a report that they produce for the legislature. But after interviewing customers, they discover that the legislature no longer wants this report! Customer data helps teams discover new opportunities, verify the extent of a problem, better understand how products and services are used, prevent problems that impact the customer, and prioritize the work of the team.
Multiple customers have conflicting and competing needs
Individuals in an organization serve different customers. The needs of these customers are sometimes in conflict. When this happens. Internal departments compete with one another to meet the needs of their diverse customers. Interviewing customers will help the team look at the total picture and determine which priorities meet the needs of all their customers.
read more »
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