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ThedaCare: Lean Healthcare
Area health systems put customer service first by MaryBeth Matzek In 2005, ThedaCare was able to save $10 million thanks to its lean programs and officials hope to save another $12 million this year, Toussaint said.
ThedaCare's march toward lean began when Toussaint started looking for a way to improve quality and service while cutting costs. He found what he was looking for in an unlikely place - a factory that produces lawnmowers and snow blowers.
The model Ariens used was adapted from a system put in place by Toyota, the Japanese automotive manufacturer. As part of the system, teams are formed to look at processes and find ways to improve them - whether it's cutting out an unnecessary step or finding a better way to serve the customer. via Lean Manufacturing BlogRelated:
Deming Seminar and Conference
TPS - Take 2
The cover story in latest issue of Industry Week focuses on what people have missed when applying ideas from the Toyota Production System. Learning From Toyota -- Again by John Teresko: "Why is it that the TPS tools of lean, agile, TQM, TPM, re-engineering, just-in-time, cellular/continuous workflow and so on -- never seem to really pay off big [aside from Toyota]?" asks Michael Paris, president of Hinsdale, Ill.-based Paris:Consulting. His response: "Unless TPS is everywhere in an organization, it is nowhere. Too often managers pushing for performance improvements have a limited vision and scope. They fail to approach the executive team that has responsibility for the entire enterprise and authority over it." Continuous Improvement In The Executive Suite by Patricia Panchak: We've watched as Toyota's strength and market share steadily grew for two decades. We've adopted the Toyota Production System (TPS), which we correctly determined is the source of Toyota's success. But we missed something that is now becoming ever more clear: Continuous improvement is as integral to corporate strategy as it is to production strategy. Executives looking for a long-term competitive edge should take note. The tools of TQM, lean manufacturing, TPS, six sigma... are useful. But the extraordinary gains are made when the entire system is geared toward improvement. Related Posts:
Lean Software Development
Toyota's Early History
via Got Boondogle: A book that I recently finished is "Quest for the Dawn" by Shoji Kimoto. "Quest for the Dawn" is a fascinating true story set from about 1930 to the mid 1950s of a bold business quest to build an automobile from the ground up. The relentless inventors were Sakichi and Kiichiro Toyoda and, of course, the car manufacturer was the Toyota Motor Company. Look interesting, so I went on amazon.com and Quest for the Dawn by Shoji Kimoto was available for $1, through a 3rd party, plus $3.49 shipping. I really like many of the things the internet makes easy. And relating to the zero defects post earlier today. I never thought of it as a defect when I couldn't order an obscure book, in a minute or two, from home and have it delivered to me. Deming was right that: " Absence of defects does not necessarily build business... Something more is required."
Zero Defects
Zero Defects by Norman Bodek: Do you believe it is possible to have Zero Defects? I am not talking about six sigma at all. I believe it is possible to have zero defects (in a sense). But I do not believe it is a good management strategy to practice what those I have heard in the past preaching zero defects. A Dichotomy by Norman Bodek. Wow, you really have to look to find this article after you follow the link. I think the site could really benefit from improving the usability of the site (similar to lean ideas on making things visible and easy to find): In truth, you should be making lots of mistakes. We do want you to learn, but for the sake of your customers you should not allow mistakes to become defects. That is the dichotomy! Make mistakes but donÂ't allow them to become defects. I know many people talk about this conflict (those that agree aiming for zero mistakes missing the most important ideas). However, I have never really understood it as a conflict. You want to take risks to try new things to experiment to learn. Doing those things can be done in a manner that doesn't provide your customers a defect. I suppose there are times when you take a risk your customers may be disappointed, but I don't see why this need be the case with most experiments. Aiming to limit defects for the customer is a good idea. I agree continually improving your products and service is a good idea. I think applying poka yoke concepts is a great idea to eliminating mistakes internally (in your organization) and in the design of your products and service so your customers avoid potential problems. I agree that eliminating defects that get to customers (and even those that don't) is wise. But I think that doing so is the result of continually improving your processes. I do not believe you succeed by declaring your goal to be zero defects. You succeed by creating a culture of never ending improvement, of customer focus, of fact based decision making, of learning, of "empowerment"... Part of that improvement is reducing variation, reducing defects, implementing smart new mistake proofing but innovation is too. Effectively zero defects is not really achievable in most cases. Defects are largely a matter of definition. As performance improves expectations will often rise. When you eliminate anything you would have called a defect years ago, standards are higher and things that would not have been called defects are no longer acceptable. At some point the system process advances to such a level where zero defects is possible in some cases but in many (say medical care, air transportation, education, computer software, restaurants, government, management consulting, civil engineering, legal services...) I really think it is basically impossible. W. Edwards Deming, New Economics, page 10: "No defects, no jobs. Absence of defects does not necessarily build business... Something more is required."
Engines of Democracy
Engines of Democracy by Charles Fishman, Fast Company: The 170-plus people who work at this plant try to make perfect jet engines. And they come close. On average, one-quarter of the engines that GE/Durham sends to Boeing have just a single defect -- something cosmetic, such as a cable not lined up right, or a scratch on a fan case. The other three-quarters are, in fact, perfect.
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GE/Durham's continuous-feedback culture -- "We call this the feedback capital of the world," says Paula Sims -- means that while in one sense it's true that no one here has a boss, the opposite is also true: "I have 15 bosses," says Keith McKee. "All of my teammates are my bosses." No one is exempt. "Not long after I started here," says Sims, "an employee came to me and said, 'Paula, you realize that you don't need to follow up with us to make sure we're doing what we agreed to do. If we say we'll do something, we'll do it. You don't need to micromanage us.' I sat back and thought, 'Wow. That's so simple. I'm sending the message that I don't trust people, because I always follow up.' I took that to heart. This was a technician, and I had been at the plant less than 30 days. I appreciated that he felt comfortable enough to tell me this. And I thought, 'This really is a different place.'"
Improving Communication
How to Communicate with Me by David Anderson. A nice post, with practical advice on improving communication. He understood that service goes downward in management and he encouraged us to communicate to him, how he could be of service to us. I've used the template I developed for communicating with John as a way to train my staff to better up-manage. It's important not to expect people to do this intuitively. Generally, their only up-management training came when as a child they learned how to manipulate parents to get what they wanted. Manipulation isn't the result we're after. Understanding the correct level to make decisions and how to ask for senior intervention, is what we are looking for. Here is the template...
Effective Innovation
Overcoming the barriers to effective innovation (pdf format) by Pierre Loewe and Jennifer Dominiquini The top six obstacles to innovation identified by respondents were consistent across industries: - Short-term focus.
- Lack of time, resources or staff.
- Leadership expects payoff sooner than is realistic.
- Management incentives are not structured to reward innovation.
- Lack of a systematic innovation process.
- Belief that innovation is inherently risky.
Related posts:
What Should GM Do?
GM must take back concepts that Toyota has capitalized on by W. Harrison Goodenow: It still doesn’t have to be this way. The solution lies in better manufacturing engineering and not in Machiavellian marketing. Concurrent engineering, hard prototyping, management by planning, real process control and Deming’s analytic-studies approach to design of experiments are proven approaches to designing and building a quality car competitively. Just ask Toyota.
Lean Accounting
Lean Accounting (Lean Beans) by Sue Sondergelt We must get rid of Standard Cost and Absorption Accounting for managing the business. This is 1930's thinking, when business was all labor, little material, and very little overhead. Today business is all material, very little labor, and moderate overhead. A nice short article introducing accounting issues which influence organizational behavior in the counter-productive ways. Accountants today need to change the way they think! We need to lose old paradigms! We need to think in terms of processes, not transactions. We need to think Cost Management, not Cost Accounting. We need to be leading Teams, not reporting history. - More lean thinking articles
- Profit Beyond Measure: Extraordinary Results Through Attention to Work and People by H. Thomas Johnson and Anders Broms. This book details how two extremely profitable manufacturers, Toyota and the Swedish truck maker Scania, have rejected the traditional mechanistic mindset of managing by results.
- Lean Accounting Summit
Lean Consumption
Lean Consumption by James P. Womack and Daniel T. Jones, Harvard Business Review. An excellent article on the topic of their book: Lean Consumption. The Principles of Lean ConsumptionThe concepts underlying lean consumption boil down to six simple principles that correspond closely with those of lean production. (For more on these principles, see our book Lean Thinking.) - Solve the customer’s problem completely by insuring that all the goods and services work, and work together.
- Don’t waste the customer’s time.
- Provide exactly what the customer wants.
- Provide what’s wanted exactly where it’s wanted.
- Provide what’s wanted where it’s wanted exactly when it’s wanted.
- Continually aggregate solutions to reduce the customer’s time and hassle. This approach has been pursued brilliantly
A very good article. Read it and then get the book.
Lean at NUMMI
via Lean Manufacturing Blog, Lean at NUMMI by Patrick Waurzyniak , Manufacturing Engineering. An article well worth reading. NUMMI's production system is patterned closely after TPS, which is constantly changing and being updated, notes Gonzalez-Beltran. The pillars of TPS are the waste-reduction techniques of Just-in-Time production, bringing inventory to where it is needed and at the right time, and also jidoka, which provides machines and operators the ability to detect abnormal conditions and immediately stop work if such conditions occur. Other major lean manufacturing elements being emphasized at NUMMI include standardized work, kaizen events, jishuken (an in-depth week-long workshop similar to a kaizen event), and value-stream mapping, which NUMMI has pushed down into its supplier companies. Related posts:
Leading Lean: Right Tool, Right Problem, Right Thinking
via Lean Manufacturing Blog - Leading Lean: Right Tool, Right Problem, Right ThinkingOne look at the kanban card in light of lean thinking helps those using it understand how and why it works, because they see it and understand it as a request, not a card. It is a method to connect a customer to a supplier. But most companies implementing kanban systems are not successful at getting the users to understand how and why the tool works. The most common excuse - it is too hard for our people to understand - stands in stark contrast to the simple concept.
You can read about the tools and techniques of lean in any book. You can delegate the application and implementation to just about anyone. But you cannot succeed without internalizing the principles of lean throughout all of management, and using that thinking to guide the implementation, daily decision making, problem solving, managing and coaching.
More lean thinking articles
Carnival of Lean Leadership
Lean and Six Sigma in India BPO
Via Panta Rei, Business Process Outsourcing, Meet Value Engineering, Measure for MeasureDedicated Six Sigma, Lean and Reengineering teams continuously spot and improve processes for Genpact as well as its customers. Supported by 500-plus Six Sigma Black Belts and Master Black Belts, 150 Lean Coaches, these teams have implemented 400-plus breakthrough improvements, 3,000-plus Kaizen improvements that enhanced productivity by 6-8 per cent year-on-year. Genpact shares these benefits with customers," says Bhasin.
For one of its customers consolidating operations from multiple centres to one, offshoring the processes and Six Sigma initiatives delivered a productivity benefit of $300 million, he says.
According to S. Nagarajan, Founder and Chief Operating Officer of 24/7Customer, value engineering is a means of value creation more than cost reduction. Another interesting quote: Continued cost inflation, higher wages and a talent crunch threaten India's global sourcing competitiveness. This will allow lower-cost countries to grab market share from India. Related Posts:
Management Lessons from Terry Ryan
Management Lessons from Terry Ryan: Humility, Stability & Personality from Management by Baseball: competitors in any endeavor figure anything easy must not be a very important differentiator (bass-ackwards of course, but the erroneous mental algebra is that if it was important and easy both, everyone could/would do it and since they're not doing it and it's easy it, therefore, must not be important. Goofy but widespread thinking. As long as Ryan and his team make this seem like luck or just simple stuff, others won't feel like they're being outfoxed (which is not an incentive to deal with the fox again). This seems true to me. I can't really understand why people seem unwilling to do the simple known things to improve performance. But there does seem to be the attitude that we need to find secret or fantastic new ideas in order to learn. "I can just read some idea in a book published 30 years ago and improve that can't be worth doing. That can't be true, if it was everyone would be doing it." Well it isn't quite that easy but it is close. Just do the obvious things that have been well publicized for decades and you will do much better than most. Ryan says the whole operation has had this 10- to 12 year run of stable key folk. This lowers overhead, as anyone who has ever worked in a healthy small business. Operational overhead shrivels becaus[e] people learn what others' strengths are, learn to trust and leave people alone to do their jobs. Once it becomes apparent that chronic office politics and effort invested in other overhead activities gets no organizational reward, people look for alternatives (like real work) with which to win brownie points. Avoiding Deming's deadly disease: mobility of top management. Toyota Manufacturing Powerhouse, Relentless, Detroit News: Unusual among automakers, "they don't hide a lot," Coventry said. "It's like going to the Super Bowl and having the opposite side throw their playbook on the table. It's as if they feel they can still beat you on the field." Here is one simple way to get results. Use the Leader's Handbook by Peter Scholtes. Some more great management books.
Lean Manufacturing in the Middle East
Lean Manufacturing Interview of Mohammed Ajlouni, Managing Director of Jordan Specialized Vehicle:
How should you work with your suppliers in a truly lean environment?
In a truly lean environment, suppliers are partners. They will be expected to supply the required material, the right quality, the right quantity, at the right time, every time. To be able to do this, suppliers have to learn how to take the waste out of their processes. Indeed, many companies have to teach their suppliers how to become lean too.
More lean manufacturing articles
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