Download - The Lean Enterprise (Lean Thinking)
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The Lean EnterpriseThe Lean Enterprise(Lean Thinking)(Lean Thinking)
Carlo Carlo ScodanibbioScodanibbio presents:presents:
”” if it doesn't add value, it is wasteif it doesn't add value, it is waste””
a training event organised by:a training event organised by:
Lean Thinking is Lean Thinking is ““leanlean”” because it provides a way because it provides a way
to do more with less while coming closer to to do more with less while coming closer to
providing customers with exactly what they want.providing customers with exactly what they want.
questionquestionWhich is the primary objective of your Organisation?Which is the primary objective of your Organisation?
write it down on a piece of paper (1 minute)
(one and one only)(one and one only)
Key-Words: lean, manufacturing, power, point, presentation, value, waste, client, service, industry, perform, performance, world, class,
operations, adding, management, productive, process, flow, processing, production, 5S, creativity, people, method, kaizen, improvement, hr,
human, resources, strategy, strategies, tei, employee, involvement, responsibilities, course, carlo, scodanibbio, thinking, enterprise, stream, map,
mapping, spaghetti, diagram, 5why, 5w1h, communication, circle, tool, project, construction, planning, last, planner, ppc, toc, quality, total, poka,
yoke, poka-yoke, excellence, pull
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Airlines...Airlines...
THE STORYTHE STORY……
the fax!!the fax!!
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Banks...Banks...
Car Hire...Car Hire...
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5* Hotel...5* Hotel...
Customer Customer
Care...Care...
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LEAN THINKING: THE ORIGIN 1LEAN THINKING: THE ORIGIN 1Maybe you fish itMaybe you fish it……....
……maybe you farm itmaybe you farm it……....
LEAN THINKING: THE ORIGIN 1LEAN THINKING: THE ORIGIN 1
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……maybe you mine itmaybe you mine it……....
LEAN THINKING: THE ORIGIN 1LEAN THINKING: THE ORIGIN 1
……maybe you breed itmaybe you breed it……....
LEAN THINKING: THE ORIGIN 1LEAN THINKING: THE ORIGIN 1
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……maybe you mill itmaybe you mill it……....
LEAN THINKING: THE ORIGIN 1LEAN THINKING: THE ORIGIN 1
……maybe you brew itmaybe you brew it……....
LEAN THINKING: THE ORIGIN 1LEAN THINKING: THE ORIGIN 1
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……maybe you manufacture itmaybe you manufacture it……....
LEAN THINKING: THE ORIGIN 1LEAN THINKING: THE ORIGIN 1
……maybe you construct itmaybe you construct it……....
LEAN THINKING: THE ORIGIN 1LEAN THINKING: THE ORIGIN 1
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……maybe you simply sell itmaybe you simply sell it……....
LEAN THINKING: THE ORIGIN 1LEAN THINKING: THE ORIGIN 1
or maybe you dance itor maybe you dance it……....
LEAN THINKING: THE ORIGIN 1LEAN THINKING: THE ORIGIN 1
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LEAN THINKING: THE ORIGIN 1LEAN THINKING: THE ORIGIN 1
You catch it, you farm it, You catch it, you farm it,
you mine it, you breed it, you mine it, you breed it,
you mill it, you brew it, you mill it, you brew it,
you manufacture it, you you manufacture it, you
construct it, you simply construct it, you simply
sell it or you dance itsell it or you dance it……
……no matter what you do no matter what you do -- you must generateyou must generate……..
LEAN THINKING: THE ORIGIN 1LEAN THINKING: THE ORIGIN 1
VALUEVALUEfor your customersfor your customers
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LEAN THINKING: THE ORIGIN 2LEAN THINKING: THE ORIGIN 2
Everyone that works in your organization is doing one of three tEveryone that works in your organization is doing one of three things:hings:
1. They are generating value for your customers 1. They are generating value for your customers -- oror
2. They are creating or reshuffling waste 2. They are creating or reshuffling waste –– oror
3. They are doing absolutely nothing3. They are doing absolutely nothing
The market leaders will always The market leaders will always
have the majority of their people have the majority of their people
dedicated to the first of thesededicated to the first of these
……in an office (or a bank, or a travel agent, orin an office (or a bank, or a travel agent, or…….) the floor .) the floor
cleaner may be adding more value than most employees..cleaner may be adding more value than most employees..
…….so, you would like your enterprise to be:.so, you would like your enterprise to be:
modernmodern
efficientefficient
financially soundfinancially sound……
really satisfying clients and employeesreally satisfying clients and employees……
guaranteed in its futureguaranteed in its future…………
productiveproductiveprofitableprofitable
????????
????????????
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…….so, you would like your enterprise to be: .so, you would like your enterprise to be:
Efficient Efficient –– Profitable Profitable –– Modern Modern ––
Productive Productive –– Financially sound Financially sound --
satisfying clients and employees satisfying clients and employees ––
Guaranteed in its future Guaranteed in its future ––
???? ???? -- ????? ????? -- ??????????????????????????
..in a nutshell: you would like your enterprise to..in a nutshell: you would like your enterprise to
performperform
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This is possible: it can be achievedThis is possible: it can be achieved……
…….it depends on you, .it depends on you,
entrepreneurs and managersentrepreneurs and managers……....
..it..it’’s just your choice..s just your choice..
But:But: there are 3 necessary stepsthere are 3 necessary steps……
….you would like your enterprise to be: Efficient – Profitable – Modern –
Productive – Financially sound – Capable of really satisfying clients and
employees – Guaranteed in its future – ???? - ????? - ?????????
THE 3 NECESSARY STEPSTHE 3 NECESSARY STEPS
1) Understand the environmental 1) Understand the environmental
change and manage itchange and manage it
2) Be prepared to abandon the 2) Be prepared to abandon the
““formulaformula””
3) Have a clear direction and tell 3) Have a clear direction and tell
people about itpeople about it……..
4) 4) …….and something more.and something more……....
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STEP 1)STEP 1)
Understand the environmental Understand the environmental
change and manage itchange and manage it
….the world has changed….
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COMPLEXITYCOMPLEXITY
clients are monstersclients are monsters……..
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STEP 2)STEP 2)
Be prepared to abandon the Be prepared to abandon the
““formulaformula””
the the ““formulaformula””::
the the ““CampariCampari”” syndromesyndrome
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the the ““formulaformula””The “secrets” of success
The do’s and don’ts
The “taboo” and “holy cows”
The “how to do things”
The areas of “influence”
The “who and what is to be respected”
The “institutionalised” values and principles
The rules
The policies
The procedures
The “descriptions” (jobs, tasks…..)
…………..
the the ““formulaformula””
EMPHASIS
On 3 key departments:
DESIGN/ENGINEERING
TECHNOLOGY/OPERATIONS
MARKETING/SALES
Emphasis on Structure, Organisation, Hierarchy,
Departments & “Compartments”
Emphasis on Control (the “Controller”…..)
Emphasis on Efficiency
Emphasis on Stability
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protect the protect the ““formulaformula””!!
The Formula must be protected, because it has
generated success for many years:
---- > resistance to change!> resistance to change!
Protection = Vertical ControlProtection = Vertical Control
preserve its integrity!preserve its integrity!
the GUARDIANSthe GUARDIANS’’ function:function:
Vetting/Approving amendments to the
formula or to its main parameters
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effects of the effects of the ““formulaformula””
Top and mid level managers, with time, get used to the
Formula, and learn how to stick to it.
At lower levels (supervisors, shop-floor workers),
unwritten, similar rules filter down and become
applied.
FlexibilityFlexibility
ReactivityReactivity
InnovationInnovation
little….. (or none)
The Enterprise becomes The Enterprise becomes ““closedclosed””
People become People become ““staticstatic””
the the ““formulaformula”” (after midnight(after midnight……))
If some indicators start showing signals of serious
inadequacy of the Formula all that may happen is a
“reshuffle” of the old status-quo:
CostCost--cutting exercisescutting exercises
Increase in efficiency of less Increase in efficiency of less
powerful department/areaspowerful department/areas
And/or: technological revampingAnd/or: technological revamping
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the obsession to change the obsession to change (the (the ““formulaformula”…”…))
The Formula is The Formula is ““blockedblocked””, and the whole , and the whole
Organisation is Organisation is slowslow and and ““reluctant to learnreluctant to learn””
If signals show very poor performance, If signals show very poor performance,
the need to restructure the Formula and to the need to restructure the Formula and to
change may become an obsessionchange may become an obsession
BUT:BUT: in the end things remain the same.....in the end things remain the same.....
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homework?homework?
..oh, yes!!!..oh, yes!!!spot the spot the ““formulaformula””
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STEP 3)STEP 3)
Have a clear direction in your Have a clear direction in your
mindmind…….. .. (and tell people about it(and tell people about it…….).)
the visionthe vision
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TELL YOUR PEOPLE ABOUT THE TELL YOUR PEOPLE ABOUT THE
““LEANLEAN”” DIRECTIONDIRECTIONBUT!! before doing so, some checkBUT!! before doing so, some check--points:points:
“…“…is everybody in your enterprise is everybody in your enterprise -- at at
top/middle level top/middle level -- convinced that people make convinced that people make
the difference between failure andthe difference between failure and success?success?””
“…“…is the vision shared at top/middle level?is the vision shared at top/middle level?””
“…“…is the is the ““integrationintegration”” concept clear and concept clear and
understood at top/middle level?understood at top/middle level?””
This is a “pass the Rubiconpass the Rubicon” situation
– there is no come back – it must go
right. So, make your checks “before”!
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worldworld--class, class,
““leanlean””
performanceperformanceperformance managementperformance management
1 1 -- MEASURE PERFORMANCEMEASURE PERFORMANCE
4 necessary steps4 necessary steps
3 3 -- SET PATH TO IMPROVEMENTSET PATH TO IMPROVEMENT
4 4 -- MAKE IT HAPPENMAKE IT HAPPEN
performance managementperformance management
2 2 –– IDENTIFY THE GAPIDENTIFY THE GAP
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HOW TO MEASURE HOW TO MEASURE
PERFORMANCEPERFORMANCE
Step 1Step 1
……..know where you stand!!!..know where you stand!!!
Step 1Step 1HOW TO MEASURE HOW TO MEASURE
PERFORMANCEPERFORMANCE
……..know where you are!!!..know where you are!!!
Enterprise PerformanceEnterprise Performance
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(KEY PERFORMANCE COMPONENTS (KEY PERFORMANCE COMPONENTS –– KPC)KPC)examples
COMMERCIAL PERFORMANCECOMMERCIAL PERFORMANCEMarket penetration Market penetration –– Market share/expansionMarket share/expansion
Effectiveness of Marketing ActivitiesEffectiveness of Marketing Activities
Sales Force EffectivenessSales Force Effectiveness
Customer LoyaltyCustomer Loyalty
Rate of Acquisition of New CustomersRate of Acquisition of New Customers
Dealers/Wholesalers PerformanceDealers/Wholesalers Performance
Brand Identity LevelBrand Identity Level
Communication EffectivenessCommunication Effectiveness
Reputation Reputation –– ImageImage
THE MAIN COMPONENTS OF THE MAIN COMPONENTS OF
ENTERPRISEENTERPRISE’’S PERFORMANCES PERFORMANCE
Operational Efficiency (Labour, Machines, Materials, Indirect ArOperational Efficiency (Labour, Machines, Materials, Indirect Areas)eas)
Economical Efficiency (Labour, MaterialsEconomical Efficiency (Labour, Materials……..)..)
ProductivityProductivity
Quality of Product and ServiceQuality of Product and Service
Value AddedValue Added
Plant/Equipment PerformancePlant/Equipment Performance
Personnel PerformancePersonnel Performance
THE MAIN COMPONENTS OF THE MAIN COMPONENTS OF
ENTERPRISEENTERPRISE’’S PERFORMANCES PERFORMANCE
examples (KEY PERFORMANCE COMPONENTS (KEY PERFORMANCE COMPONENTS –– KPC)KPC)
OPERATIONAL PERFORMANCEOPERATIONAL PERFORMANCE
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TurnoverTurnover
ProfitabilityProfitability
Industrial Culture Level/ModernityIndustrial Culture Level/Modernity
Effectiveness of Change ManagementEffectiveness of Change Management
THE MAIN COMPONENTS OF THE MAIN COMPONENTS OF
ENTERPRISEENTERPRISE’’S PERFORMANCES PERFORMANCE
examples (KEY PERFORMANCE COMPONENTS (KEY PERFORMANCE COMPONENTS –– KPC)KPC)
ECONOMICAL PERFORMANCEECONOMICAL PERFORMANCE
CULTURAL PERFORMANCECULTURAL PERFORMANCE
THE MAIN COMPONENTS OF THE MAIN COMPONENTS OF
ENTERPRISEENTERPRISE’’S PERFORMANCES PERFORMANCE
(KEY PERFORMANCE COMPONENTS (KEY PERFORMANCE COMPONENTS –– KPC)KPC)
Rather than to Functions and Departments, Performance
Components should preferably be attached to ProcessesProcesses and subsub--
ProcessesProcesses
very im
portan
t!
very im
portan
t!
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Product Development Process Product Development Process –– ““AchievementAchievement”” factorfactor
AfterAfter--Sales Service Process Sales Service Process –– ““Speed of InterventionSpeed of Intervention”” factorfactor
Invoicing Process Invoicing Process –– ““CorrectnessCorrectness”” factorfactor
….and, for instance…
Goods Returned Management Process Goods Returned Management Process –– ““FunctionalityFunctionality”” factorfactor
examples (PROCESS PERFORMANCE INDICATORS)(PROCESS PERFORMANCE INDICATORS)
THE MAIN COMPONENTS OF THE MAIN COMPONENTS OF
ENTERPRISEENTERPRISE’’S PERFORMANCES PERFORMANCE
All significant Performance Components (KPC) should be
measured adequately
If feasible, significant and practical, a
Key Performance IndicatorKey Performance Indicator (KPIKPI) should be associated with a KPCKPC to
monitor it
(KEY PERFORMANCE COMPONENTS (KEY PERFORMANCE COMPONENTS –– KPC)KPC)
THE MAIN COMPONENTS OF THE MAIN COMPONENTS OF
ENTERPRISEENTERPRISE’’S PERFORMANCES PERFORMANCE
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MEASURING QUANTIFIABLE PERFORMANCE COMPONENTSMEASURING QUANTIFIABLE PERFORMANCE COMPONENTS
Certain Performance Components may be mathematically measured
MEASURING UNMEASURING UN--QUANTIFIABLE PERFORMANCE COMPONENTSQUANTIFIABLE PERFORMANCE COMPONENTS
Any (apparently) un-measurable Performance Component may actually be
measured with the aid of suitable
QuestionnairesQuestionnaires and Scoring MethodsScoring Methods
COMPANY CLIMATE QUESTIONNAIREPARAMETERSPARAMETERS
Company (internal) ImageCompany (internal) Image
relationships with Managementrelationships with Management
interinter--personal relationshipspersonal relationships
interest in own workinterest in own work
interinter--functional relationshipsfunctional relationships
work informationwork information
work flow and work flow and ““fluidityfluidity””
““physicalphysical”” work environmentwork environment
examples
MEASURING UNMEASURING UN--QUANTIFIABLE PERFORMANCE COMPONENTSQUANTIFIABLE PERFORMANCE COMPONENTS
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COMPANY CLIMATE QUESTIONNAIRE
Year 2007 Year 2008
INDEXING METHODSINDEXING METHODS
Indices Indices -- Indicators Indicators -- RatiosRatios
even possible to create an overall
Enterprise Performance IndexEnterprise Performance Index
possible to create an Index representing the overall behaviour of a number of Indices
useful on their own and even more when put in relationship the one to the other
useful to understand and to monitor Performance Components behaviour and trends
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SOME EXAMPLES OF COMMERCIAL INDICESSOME EXAMPLES OF COMMERCIAL INDICES
ImsIms = Market Share Index = 100 x Sales ($)/Overall Market Value ($)= Market Share Index = 100 x Sales ($)/Overall Market Value ($)
Inc = New Clients Index = 100 x number of new clients/total Inc = New Clients Index = 100 x number of new clients/total number of clientsnumber of clients
IlcIlc = Lost Clients Index = 100 x number of lost clients/total = Lost Clients Index = 100 x number of lost clients/total number of clientsnumber of clients
IciIci = Clients Increment Index = 100 x (number of year end clients = Clients Increment Index = 100 x (number of year end clients ––number of year start clients)/number of year start clientsnumber of year start clients)/number of year start clients
IascIasc = Average Sales per Client Index = sales (quantity or $)/total = Average Sales per Client Index = sales (quantity or $)/total number of clientnumber of client
IcpcIcpc = Commercialisation of Productive Capacity Index = 100 x sales = Commercialisation of Productive Capacity Index = 100 x sales (quantity)/productive capacity (quantity)(quantity)/productive capacity (quantity)
SOME EXAMPLES OF OTHER INDICESSOME EXAMPLES OF OTHER INDICES
IsrIsr = Stock Rotation Index = sales (at cost)/average stock (at cost= Stock Rotation Index = sales (at cost)/average stock (at cost))
IseIse = Sales per Employee Index = total sales (turnover)/total numbe= Sales per Employee Index = total sales (turnover)/total number of r of employeesemployees
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GRAPHIC REPRESENTATION OF PERFORMANCE GRAPHIC REPRESENTATION OF PERFORMANCE
COMPONENTSCOMPONENTSexamples
GRAPHIC REPRESENTATION OF PERFORMANCE GRAPHIC REPRESENTATION OF PERFORMANCE
COMPONENTSCOMPONENTSexamples
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GRAPHIC REPRESENTATION OF PERFORMANCE GRAPHIC REPRESENTATION OF PERFORMANCE
COMPONENTSCOMPONENTSexample: Radar Chart
why enterprises donwhy enterprises don’’t t ““performperform””......…….the root causes of poor performance date .the root causes of poor performance date
back to over 2 centuries agoback to over 2 centuries ago……....
…….we have gone into the .we have gone into the
21st century, with 21st century, with
enterprises designed in the enterprises designed in the
18th and 19th centuries to 18th and 19th centuries to
perform well in the 20thperform well in the 20th……....
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Why do all traditional Management Why do all traditional Management
techniques and disciplines somehow fail?techniques and disciplines somehow fail?
Management by Objectives, Effective Leadership, Diversification,Z Theory, Situational Leadership, Effective Communication, Zero-based-Budgeting, Decentralisation, Team Building, Management by Exception, Dale Carnegie techniques, Interpersonal Skills,
Quality Circles, Excellence, Restructuring, Portfolio Management, Interactive Management, Matrix Organisational Structure, Total
Quality Management, ISO 9000..... and One-Minute Managing......
Why is communication so difficult in Why is communication so difficult in
many many ““traditionaltraditional”” enterprises?enterprises?
Why isWhy is real, nonreal, non--spurious improvement so spurious improvement so
difficult to achievedifficult to achieve in many enterprises?in many enterprises?
Why Why ““functioningfunctioning”” well is so awkward in well is so awkward in
many many ““traditionaltraditional”” enterprises?enterprises?
..we have to look at organisational structures..we have to look at organisational structures……
Why do enterprises struggle both when they Why do enterprises struggle both when they
expand and when they are compelled to expand and when they are compelled to
shrink?shrink?
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……..that support an effective ..that support an effective
Employee Involvement scheme Employee Involvement scheme
and allow higher levels of and allow higher levels of
PerformancePerformance
ORGANISATIONAL ORGANISATIONAL
STRUCTURESSTRUCTURES
ORGANISATIONAL STRATEGIES
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REAL ENTITIESREAL ENTITIES
effective Human Resourceseffective Human Resources
Management StrategiesManagement Strategies
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effective Human Resourceseffective Human Resources
Management StrategiesManagement Strategies
EFFECTIVE HR MANAGEMENT STRATEGIESEFFECTIVE HR MANAGEMENT STRATEGIES
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EFFECTIVE HR MANAGEMENT STRATEGIESEFFECTIVE HR MANAGEMENT STRATEGIES
EFFECTIVE HR MANAGEMENT STRATEGIESEFFECTIVE HR MANAGEMENT STRATEGIES
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EFFECTIVE HR MANAGEMENT STRATEGIESEFFECTIVE HR MANAGEMENT STRATEGIES
EFFECTIVE HR MANAGEMENT STRATEGIESEFFECTIVE HR MANAGEMENT STRATEGIES
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EFFECTIVE HR MANAGEMENT STRATEGIESEFFECTIVE HR MANAGEMENT STRATEGIES
““...the worst thing that could possibly ...the worst thing that could possibly
happen to an enterprise and its employees happen to an enterprise and its employees
is the adoption of an ineffective H R is the adoption of an ineffective H R
Management strategy......Management strategy......””
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EXAMPLES OF EXAMPLES OF ““MISMIS--MATCHMATCH””
E2 M2
M1
E1
homework?homework?
..oh, yes!!!..oh, yes!!!understand your organisational strategiesunderstand your organisational strategies
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SCANNING AN ORGANISATIONAL STRUCTURESCANNING AN ORGANISATIONAL STRUCTURE
area: cultural valuesarea: cultural values• typical of the "technology" era with a strong "Tayloristic” belief• Credo: "...products and/or technology make business..."• Competitiveness = costs reduction
• typical of the "marketing" era• Motto: Max exploitation of the Market• Logics: Max yearly results (economic - short/medium term strategy)• Credo: Business is made exploiting opportunities
• typical of the "quality challenge" era• Motto: Client's satisfaction ("....client is the king...")• Logics: Long-term strategy based on the Total Quality approach• Credo: Business is made improving continuously and systematically the whole productive
process in a "client-driven" mode
• typical of the "World-Class" era• Motto: Total Satisfaction (client, employees, shareholders, suppliers.....)• Logics: Long-term strategy based on the VAM (Value Adding Management) philosophy (and the
"value-chain" concept of M. E. Porter: "..be in the right chain with valid/competitive partners..")
• Credo: Business is made by increasing continuously and systematically the overall value of the vendor-vendee system and by consistent innovation
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area: relationship with marketarea: relationship with market
• Market: unsaturated (demand > offer) and "stable"• Market's needs: established by "technologists", who decide on validity and "value" of products• Products are literally "thrown" into the market (PRODUCT-OUT)
• Market: saturated (offer > demand) - “consumer” - not "mature" - somewhat unstable -fierce Competition
• Marketing force/abilities indispensable to locate opportunities and generate new needs in the market• Sales force/abilities indispensable to enhance competitiveness• Products developed (functional specs ---> technical specs ---> industrial/manufacturing specs) by locating
market needs (PRODUCT-IN)
• Market: saturated (offer > demand) - somewhat less “consumer” - "mature" (capable of understanding and rewarding quality) - unstable/turbulent
•Market's needs: already established (by western industries) - product lines are well defined (cars, consumer electronics.....)
•Extensive use of QFD (Quality Function Deployment) techniques for effective/fast product development•Market sets productive parameters (quality, delivery, cost) - "...the ocean pulls the river..."
• Market: rich (opulent) - very mature - featuring complexity and economic turbulence - very high competition - rapidly changing
• Market's needs: extremely personalised (mass-production coma ?)• Extrapolation/exasperation of the "market sets productive parameters" concept -----> "market sets
business parameters"
SCANNING AN ORGANISATIONAL STRUCTURESCANNING AN ORGANISATIONAL STRUCTURE
area: relationship with clientsarea: relationship with clients
• Client is an “entity” that buys our products (and sometimes gives us a lot of hassles...)
• We do not know much about our Clients (we are mainly concerned with their “liquidity”...)
• Client can and must be known more/well• Client can be persuaded to buy our products - we have marketing and
sales dept./s that take care of that.....
• Client is “King” and Client’s satisfaction is top priority• Client’s needs and expectations (explicit and implied) must be fulfilled
• Exasperation of the “Client is King” concept --- > “..Client is our Partner in business....”
SCANNING AN ORGANISATIONAL STRUCTURESCANNING AN ORGANISATIONAL STRUCTURE
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area: organisation & managementarea: organisation & management
• "Mechanical" (Scientific) system• Organisation structured in great details, and generally "static"• Decision-making process: top-down• Max attention to efficiency• Professionalism: specialised ("technical" positions are the most essential and rewarded)• Work: fragmented• Management: specialised, "per function", bureaucratic• Budget = basic tool. Great attention to "real/estimated" comparisons/analysis and to "deltas"• Max control (inspection, supervision)• Max cost control (per "cost centre")
• "Mechanical" (Scientific) system• Organisation structured in great details, but somewhat dynamic• Same organisational principles as in model (A), with new, predominant functions
(Sales, Marketing), and a new predominant position: the "Controller"• Decision-making process: top-down• Inter-functional management (featuring meetings, committees, inter-functional project teams....)• MBO - Management by Objectives• Very sophisticated budgeting/control system (with EDP/IT aid)
SCANNING AN ORGANISATIONAL STRUCTURESCANNING AN ORGANISATIONAL STRUCTURE
area: organisation & managementarea: organisation & management
• "Organic" system• From "product" culture (models A and B) to "process" culture and organisation• "Macro" organisation, process-related to main productive parameters: quality - delivery – cost• "Micro" organisation, also process-related to all other parameters• Decentralisation of responsibilities, authorities and management activities• Multi-skilled and multi-function management ("entrepreneurial" management)• Decision-making process: rather bottom-up• Profit-centres rather than cost-centres• Cost control system: from standard-oriented (models A + B) -----> to target-oriented (with performance
indicators) (Model C)• Kaizen (continuous & systematic process improvement). From "Static" standards (models A + B) -----> to
"dynamic" standards (model C). High employees involvement
• Flat Hierarchy (Horizontal Organisation)• Business/entrepreneurial culture and organisation• Total decentralisation of responsibilities in respect of overall results – extensive
Process Re-Engineering
• Organic system featuring high level of internal "supplier/client" relationship - "inter-function" and "matrix“ type organisational structures with high flexibility - value-adding “(re-)engineered” processes
• Profit centres (ABA - Activity Based Accounting)• VENTURE = entrepreneurial management (global management + risk management), highly market-oriented
(in real time), with "intra-preneurial" examples• From MBO (Management by Objectives) -----> to MBP (Management by Policies)• Extensive bottom-up drive• Top management function: co-ordination - homogenisation - internal consultancy/coaching
SCANNING AN ORGANISATIONAL STRUCTURESCANNING AN ORGANISATIONAL STRUCTURE
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area: relationship with employeesarea: relationship with employees
• Man = productive resource executing planned activities• Max control (inspection, supervision)• Employees are generally performing a series of simple and/or well defined tasks
• New parameters at shop-floor level: job rotation, job enlargement, job enrichment• MBO - Management by Objectives• Tasks performed according to well structured “job descriptions”
• Decentralisation of responsibilities and authorities up to shop floor level - some form of “empowerment” (total delegation of responsibilities and max autonomy within own scope of work)
• Considerable/high employee involvement at all levels (in problem solving, decision making, and improvement activities in general)
• Extensive bottom-up drive (both in decision-making and in design/change of organisational parameters)
• Empowerment and beyond: “....employees are partners in business...” -considerable entrepreneurial and “intra-preneurial” phenomena within the Organisation – result-based merit-o-cratic system, with examples of profit-sharing and share-holding type of rewards for employees
SCANNING AN ORGANISATIONAL STRUCTURESCANNING AN ORGANISATIONAL STRUCTURE
area: manufacturing and operational strategyarea: manufacturing and operational strategy
• Max productive volumes (limited only by financial constraints)• Max productive efficiency with high attention to costs• Investments: ----> Improvements of organisation and technology ----> R & D (product and technology)• "Make" rather than "buy"
• Linked to the logics of max turnover and max profit• Short/medium term strategies driven by market researches• Product diversification• Fragmentation into business units (divisions, product lines.....)• Tendency to commercialisation "only"
• Linked to the logics of "turnover consolidation & strengthening" (large volumes- lower costs-larger volumes)• Driving philosophies: CWQC (Company-Wide-Quality-Control) – TQM (Total Quality Management) – TP (Total
Productivity: JIT – Process Improvement & Management) - TPM (Total Productive Maintenance)• Pilot tool: SEW (Systematic Elimination of Waste)• Considerable/high decentralisation of production (and responsibilities associated with design, if applicable, and production)
and high "integration" with suppliers• Internal client = external client
• Linked to the logics of "profit in the medium-long term" maintaining and developing the enterprise's overall value• Protagonist: TBI (Total Business integration) [GWQC (Group-Wide-Quality-Control) - TP (Total Productivity) and
all LEAN approaches/disciplines – Value Stream Management - TPM (Total Productive Maintenance) – 6 Sigma Methodologies - PPD (Product-Process Development), with QFD (Quality Function Deployment) -CIM (Computer Integrated Manufacturing) - SEW (Systematic Elimination of Waste) (Group-wide) -TEI (Total Employee Involvement) (Group-wide) and TEP - COMAKERSHIP]
• Emphasis on total flexibility and extreme attention to all lead-times: time-to-market (development - engineering) - start-up time -P-time - set-up time - distribution time - information time ........ with vendors as co-protagonists
SCANNING AN ORGANISATIONAL STRUCTURESCANNING AN ORGANISATIONAL STRUCTURE
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area: procurement & relationship with suppliersarea: procurement & relationship with suppliers
SCANNING AN ORGANISATIONAL STRUCTURESCANNING AN ORGANISATIONAL STRUCTURE
• Buy at the lowest possible price (utilising high contractual power)• "Paternalistic" style of relationship with ("subordinate") suppliers
• Considerable decentralisation (buy rather than make: to cope with market demand and peaks, differentiated in volumes and mix)
• Alternative, competing suppliers (in order to achieve cost efficiency and to cope with demand peaks) - suppliers "in parallel"
• Generation of high competitiveness among suppliers• Max exploitation of suppliers -----> "disposable" suppliers - turnover of suppliers
• Extensive decentralisation of production (make produce rather than make) and associated (global) responsibilities
• Creation of own, long-term suppliers network [suppliers: limited in number, well selected, "dedicated", "married", highly involved in the improvement of common processes, ideally on the same level of professionalism and maturity] - Motto: "let's improve together"
• Vendor-Vendee relationship are seen as a starting point (rather than as a target)• Driving philosophies: Value-chain - GWQC – Comakership• Permanent logistic networks integrating vendors and vendees• Few, selected, reliable, integrated suppliers - high degree of reciprocal trust - joint improvement programs –
"open" enterprises
WORLDWORLD--CLASS PERFORMANCECLASS PERFORMANCE
the lean enterprise makes no the lean enterprise makes no
distinction between external distinction between external
and internal clientsand internal clients
47
WORLD-CLASS PERFORMANCE
the lean enterprise the lean enterprise
operates operates ““per processper process””
WORLDWORLD--CLASS PERFORMANCECLASS PERFORMANCE
48
Examples:
Marketing process - Sales process - Orders
receiving process - Customer Relations
process - Product Design process -
Production process - Despatch process -
Billing process - etc.
CRITICAL PROCESSESCRITICAL PROCESSES
(PRIMARY PROCESSES)(PRIMARY PROCESSES)Processes that "touch" the customers and are addressed to satisfy the 1st Supporting Group1st Supporting Group
(Clients…)
Examples:
Procurement process - Production Planning
process - Personnel Recruitment process -
R&D process – etc.
SECONDARY PROCESSESSECONDARY PROCESSES
(SUPPORT PROCESSES)SUPPORT PROCESSES)support the Central (money generation) process OR are
set to “learn” or research in specific fields
Examples:
Administration process - Accounting
process - Health & Safety Management
process - etc.
OTHER PROCESSESOTHER PROCESSESinvisible to customers, but essential for Organisation's functioning and addressed to the satisfaction of other other
Supporting GroupsSupporting Groups (Owners & Shareholders –Employees – Suppliers – Regulating Bodies like Government, Bureau of Standards, Normalisation
Bodies….)
articulated in various Primary ProcessesCENTRAL PROCESSCENTRAL PROCESS
(MONEY GENERATING PROCESS)(MONEY GENERATING PROCESS)
UNDERSTANDING PROCESSESUNDERSTANDING PROCESSES
PROCESS PROCESS
ENGINEERINGENGINEERING
49
TODAY'S ULTIMATE SECRET FOR TODAY'S ULTIMATE SECRET FOR
LEAN PERFORMANCE, EXCELLENCE LEAN PERFORMANCE, EXCELLENCE
AND COMPETITIVENESS:AND COMPETITIVENESS:
FLOW PROCESSFLOW PROCESS
� the “overall” process must be
flowing and waste-less not only
“internallyinternally” (operation side) but
also “externallyexternally” (client side)
Example 1Example 1
FLOW PROCESSFLOW PROCESS
Examples 2Examples 2
50
�Value delivering, dynamic, flexible, Flow Flow
ProcessesProcesses (with natural sequences) built
around clients‘ expectations and needs, and
with diversified routes accordingly
Main featuresMain features
FLOW PROCESSFLOW PROCESS
��MultiMulti--functionfunction and multimulti--skillskill personnel
(case worker - case team)
��ResponsibilityResponsibility for the process and its output
�Reduction/elimination of supervision and control
�Decision making autonomy within the process
--- > EmpowermentEmpowerment
�One process ownerprocess owner as reference point
FLOW PROCESSFLOW PROCESSMain featuresMain features
51
�Management: from supervision to coachingcoaching
(training and support)
�Max (intelligent) exploitation of technology
�Flattening of organisational structures
FLOW PROCESSFLOW PROCESSMain featuresMain features
fromfrom toto
internal attentioninternal attention attention to clientattention to client
attention to taskattention to task
simple taskssimple tasks
function unitsfunction units
attention to processattention to process
simple processessimple processes
process unitsprocess units
THE SECOND INDUSTRIAL REVOLUTIONTHE SECOND INDUSTRIAL REVOLUTION
FLOW PROCESSFLOW PROCESS
52
LPMLean
Project
Mangmt
53
FPFlow
Process
VAMVAM
VALUE ADDING VALUE ADDING
MANAGEMENTMANAGEMENT
54
the VAM approach to the productive processthe VAM approach to the productive process
process process
time time
analysisanalysis
ΣΣΣΣΣΣΣΣ Time = 319 days Processing = 3 Hrs (0,04%)Time = 319 days Processing = 3 Hrs (0,04%)
Source: Lean Thinking (James Womack + Daniel Jones)
FRIGHTENINGFRIGHTENING…………..
55
SEWSEWSYSTEMATIC SYSTEMATIC
ELIMINATION OF WASTEELIMINATION OF WASTE
VALUE!VALUE!
56
57
SUMMARY OF THE MAIN TYPES OF WASTESUMMARY OF THE MAIN TYPES OF WASTE
��OverproductionOverproduction
��TransportationTransportation
��Waiting/idlingWaiting/idling
��DefectsDefects
��ControlControl
��MotionMotion
��UnUn--needed processing stepsneeded processing steps
��StockStock
58
WASTE WASTE –– THE TABLE OF EXCUSES THE TABLE OF EXCUSES -- OLDOLD1) That's the way we have always done it1) That's the way we have always done it
12) I wasn't hired to do that12) I wasn't hired to do that
11) I thought I told you11) I thought I told you
10) I'm so busy I just can't get around to it10) I'm so busy I just can't get around to it
9) I didn't think it was very important9) I didn't think it was very important
8) I forgot8) I forgot
7) Wait till the boss comes back & ask him7) Wait till the boss comes back & ask him
6) That's his job 6) That's his job -- not minenot mine
5) I am waiting for an OK5) I am waiting for an OK
4) No one told me to go ahead4) No one told me to go ahead
3) That's not in my department3) That's not in my department
2) I didn't know you were in a hurry for it2) I didn't know you were in a hurry for it
WASTE WASTE –– THE TABLE OF EXCUSES THE TABLE OF EXCUSES -- NEWNEW1) That's the way we have always done it1) That's the way we have always done it
12) All machines eventually give problems12) All machines eventually give problems
11) We must control quality or clients will complain11) We must control quality or clients will complain
10) Set10) Set--up time cannot be reduced furtherup time cannot be reduced further……..
9) We need stock: it9) We need stock: it’’s a good investments a good investment
8) Impossible8) Impossible
7) You mean we are stupid the way we do it???7) You mean we are stupid the way we do it???
6) Managers and consultants6) Managers and consultants……. Only able to mess us up. Only able to mess us up
5) We have tried in the past, and it didn5) We have tried in the past, and it didn’’t workt work……
4) Why change? We are already so busy4) Why change? We are already so busy……..
3) This way we know it works3) This way we know it works……..
2) There is no better way, believe me2) There is no better way, believe me……..
59
spot the waste!spot the waste!
LEAN MANUFACTURING LEAN MANUFACTURING
and FLOW PRODUCTIONand FLOW PRODUCTION
the target:the target:
p i p e l i n e f l o wp i p e l i n e f l o w
c o n t i n u o u s f l o wc o n t i n u o u s f l o w
60
Lean Manufacturing uses less of everything Lean Manufacturing uses less of everything
compared with mass production:compared with mass production:
half the human effort in the factory, half the half the human effort in the factory, half the
manufacturing floor space, half the investment manufacturing floor space, half the investment
in tools, half the engineering hours to develop in tools, half the engineering hours to develop
a new product in half the time. a new product in half the time.
Also it requires keeping far less than half the Also it requires keeping far less than half the
needed inventory and results in fewer needed inventory and results in fewer
defectsdefects……....James P Womack – Daniel T Jones – Daniel Roos
(The machine that changed the world)
LOT (BATCH) LOT (BATCH)
PRODUCTIONPRODUCTIONVS.VS.
FLOW FLOW
PRODUCTIONPRODUCTION
61
LOT PRODUCTIONLOT PRODUCTION VS. FLOW PRODUCTIONVS. FLOW PRODUCTION
62
LOT PRODUCTIONLOT PRODUCTION VS. FLOW PRODUCTIONVS. FLOW PRODUCTION
LOT PRODUCTIONLOT PRODUCTION VS. FLOW PRODUCTIONVS. FLOW PRODUCTION
63
LOT PRODUCTIONLOT PRODUCTION VS. FLOW PRODUCTIONVS. FLOW PRODUCTION
LOT PRODUCTIONLOT PRODUCTION VS. FLOW PRODUCTIONVS. FLOW PRODUCTION
64
fake flow productionfake flow production
the the ““conveyorconveyor”” methodmethod
LOT PRODUCTIONLOT PRODUCTION VS. FLOW PRODUCTIONVS. FLOW PRODUCTION
65
““batch productionbatch production”” vs. vs.
““oneone--piece flowpiece flow””
batch production vs. onebatch production vs. one--piece flowpiece flow
analysis
ANALYSISANALYSIS
66
The role of Lean Disciplines in The role of Lean Disciplines in
developing Employee Involvementdeveloping Employee Involvement
The role of The role of
Lean Lean
Disciplines in Disciplines in
developing developing
Employee Employee
InvolvementInvolvement
67
the the ““SOCOSOCO”” (5S) approach(5S) approach
nonnon--socosoco examplesexamples
68
a a socosoco story story
a a socosoco factoryfactory
5S in action5S in action
a a socosoco factoryfactory
5S in action5S in action
69
UU--CELL CELL
MANUFACTURINGMANUFACTURING
ONEONE--PIECE FLOWPIECE FLOW
cell manufacturingcell manufacturing
labour/machines situationlabour/machines situation
70
Lean Manufacturing and Lean Manufacturing and
Total Quality ManagementTotal Quality Management
THE POKATHE POKA--YOKE DISCIPLINEYOKE DISCIPLINE
100% TESTING APPROACHES100% TESTING APPROACHES
THE 6 SIGMA METHODOLOGYTHE 6 SIGMA METHODOLOGY
71
APPROACHES TO TQMAPPROACHES TO TQM
TOTAL QUALITY MANAGEMENTTOTAL QUALITY MANAGEMENT
implementing a Quality implementing a Quality
Assurance or Total Assurance or Total
Quality Program without Quality Program without
considering the considering the
Productivity aspect would Productivity aspect would
be "handicapped"be "handicapped"
TOTAL QUALITY MANAGEMENTTOTAL QUALITY MANAGEMENT
72
The 5 QA Achievement Levels
FLOW PRODUCTION FLOW PRODUCTION -- THE QUALITY ISSUETHE QUALITY ISSUE
5) Processes do not create defects to begin with5) Processes do not create defects to begin with
4) Processes do not send defects downstream4) Processes do not send defects downstream
3) Defects are reduced3) Defects are reduced
2) Defective product is not delivered to client2) Defective product is not delivered to client
1) Defective product is delivered to client1) Defective product is delivered to client
Flow Production is Flow Production is
based on QA level 5: based on QA level 5:
ZERO DEFECTSZERO DEFECTS
FLOW PRODUCTION FLOW PRODUCTION -- THE QUALITY ISSUETHE QUALITY ISSUE
73
Quality Inspection Quality Inspection builtbuilt--intointo the the
productive process: 100% inspectionproductive process: 100% inspection
PokaPoka--Yoke devices builtYoke devices built--into the into the
productive process for guaranteed qualityproductive process for guaranteed quality
If defects occur, the process is stopped, If defects occur, the process is stopped,
and the cause/s found and eliminatedand the cause/s found and eliminated
No double check/double inspectionNo double check/double inspection
Inspection Department IS Inspection Department IS
the Production Departmentthe Production Department
FLOW PRODUCTION FLOW PRODUCTION -- THE QUALITY ISSUETHE QUALITY ISSUE
6 Sigma methodology in extreme or 6 Sigma methodology in extreme or
well suited situationswell suited situations
100% testing100% testing
Flash Images of fully automated and Flash Images of fully automated and
semisemi--automated calibrating and testing automated calibrating and testing
lines for the lines for the ““Common RailCommon Rail”” Diesel Diesel
Injection System.Injection System.
Lines engineered by AEA Lines engineered by AEA SrlSrl of Italy.of Italy.
74
a worlda world--class enterprise dedicated class enterprise dedicated
to 100% quality testingto 100% quality testing
100% testing100% testing100% testing
The 6-SigmaThe 6The 6--SigmaSigma
MethodologyMethodologyMethodologyoverview
75
pokapoka--yokeyoke
76
MISTAKEMISTAKE--PROOFING IN EVERYDAYPROOFING IN EVERYDAY’’S LIFES LIFE
MISTAKEMISTAKE--PROOFING IN EVERYDAYPROOFING IN EVERYDAY’’S LIFES LIFE
77
MISTAKEMISTAKE--PROOFING IN EVERYDAYPROOFING IN EVERYDAY’’S LIFES LIFE
POKAPOKA--YOKE APPLICATIONSYOKE APPLICATIONS
78
POKAPOKA--YOKE APPLICATIONSYOKE APPLICATIONS
FLOW PRODUCTION FLOW PRODUCTION -- THE QUALITY ISSUETHE QUALITY ISSUEThe “turn-this-board” strategy
79
FLOW PRODUCTION FLOW PRODUCTION -- THE QUALITY ISSUETHE QUALITY ISSUEThe “turn-this-board” strategy
HEAVY MECHANISATION / HEAVY MECHANISATION /
AUTOMATIONAUTOMATION
LEAN MANUFACTURING LEAN MANUFACTURING
and TPMand TPM
TOTAL PRODUCTIVE MAINTENANCETOTAL PRODUCTIVE MAINTENANCE
80
81
““traditionaltraditional”” TPMTPM
PARTICIPATIVEPARTICIPATIVE PROGRAMS DESIGNED TO INCREASE EQUIPMENT EFFECTIVENESS (PRODUCTIVITY - QUALITY -SAFETY) AIMING AT VARIOUS GOALS:
definitiondefinition
�AUTONOMOUS MAINTENANCE ACTIVITIES TO
MAINTAIN BASIC EQUIPMENT CONDITIONS
�ELIMINATION OF ACCELERATED DETERIORATION
�RESTORATION OF EQUIPMENT TO OPTIMAL
OPERATING CONDITIONS
�ELIMINATION OF THE 6 BIG LOSSES6 BIG LOSSES, IN ORDER TO
MAXIMISE EQUIPMENT EFFECTIVENESS
““traditionaltraditional”” TPMTPMgoalsgoals
�INCREASE IN EFFICIENCY AND COST-EFFECTIVENESS
OF MAINTENANCE FUNCTION
�INCREASE OF OPERATION AND MAINTENANCE SKILLS
�MAINTENANCE PREVENTION
�MAINTAINABILITY IMPROVEMENT AND DEVELOPMENT
OF A MAINTENANCE SYSTEM FOR THE EQUIPMENT
LIFE
82
““traditionaltraditional”” TPMTPM
�TOTAL INVOLVEMENT OF PEOPLE FROM ALL DEPTS.
THAT PLAN, DESIGN, USE OR MAINTAIN EQUIPMENT
�AND OTHERS
�MAX. SAFETY AND ENVIRONMENT CONSERVATION/
/POLLUTION CONTROL
�INVOLVEMENT OF TOP MANAGEMENT
goalsgoals
““todaytoday’’ss”” TPMTPM
today’s TPM focuses on the entire
productive processproductive process to assure that the right equipment is part of a valuevalue--
adding/wasteadding/waste--freefree series of operations
and to assure (by deploying “traditional”TPM approaches) that equipment
contributes “effectively” to the primary objective of valuevalue--generationgeneration
83
spot the waste!spot the waste!
people and machinespeople and machines
84
THE 6 BIG LOSSESTHE 6 BIG LOSSES
85
THE 6 BIG LOSSESTHE 6 BIG LOSSES
THE 6 BIG LOSSESTHE 6 BIG LOSSES
86
PREVENTIVE MAINTENANCEPREVENTIVE MAINTENANCE
AUTONOMOUS MAINTENANCEAUTONOMOUS MAINTENANCE
the hearts of TPMthe hearts of TPM
The new relationship between The new relationship between
Maintenance and ProductionMaintenance and Production
VALUE VALUE
STREAM STREAM
MANAGEMENTMANAGEMENT
87
VALUE STREAM MANAGEMENTVALUE STREAM MANAGEMENT
VSM storyboardVSM storyboard
PROCESS MAPPINGPROCESS MAPPING
88
PROCESS MAPPINGPROCESS MAPPING
PROCESS MAPPINGPROCESS MAPPINGPROCESS ROUTE ANALYSIS PROCESS ROUTE ANALYSIS
GROUPGROUP--TECHNOLOGYTECHNOLOGY
89
PROCESS MAPPINGPROCESS MAPPINGPROCESS ROUTE ANALYSIS PROCESS ROUTE ANALYSIS
GROUPGROUP--TECHNOLOGYTECHNOLOGY
PROCESS MAPPINGPROCESS MAPPINGPROCESS ROUTE ANALYSIS PROCESS ROUTE ANALYSIS
GROUPGROUP--TECHNOLOGYTECHNOLOGY
90
PROCESS MAPPINGPROCESS MAPPINGPROCESS ROUTE ANALYSIS PROCESS ROUTE ANALYSIS
GROUPGROUP--TECHNOLOGYTECHNOLOGY
TACKLING IMPROVEMENT KAIZEN STYLETACKLING IMPROVEMENT KAIZEN STYLE
1. Double-check your “direction”
Create a Kaizen Milestones Create a Kaizen Milestones
Charter and manage it with the Charter and manage it with the
typical Project Management styletypical Project Management style
3. Rank Improvement Projects!
2. Understand improvement!!!
91
A TRADITIONAL A TRADITIONAL
IMPROVEMENTS IMPROVEMENTS
LISTLIST……..
FROM
THE MILESTONE THE MILESTONE
CHARTERCHARTER
..TO
92
LEANLEAN
what is it?what is it?
THINKINGTHINKING
LEAN THINKING: what is it?LEAN THINKING: what is it?
The key to WCP: LEAN THINKINGThe key to WCP: LEAN THINKING
Based on 5 core concepts:Based on 5 core concepts:
1.1. ValueValue: as defined and/or perceivable by : as defined and/or perceivable by
the customer (what the customers buy)the customer (what the customers buy)
3.3. FlowFlow: the required value: the required value--adding steps adding steps
must must ““flowflow”” –– the process must flow both the process must flow both
““internallyinternally”” (Operation Side) and (Operation Side) and
““externallyexternally”” (Customer Side)(Customer Side)
2.2. Value StreamValue Stream: the way value is produced : the way value is produced
and deliveredand delivered
93
4.4. PullPull: or making the value stream : or making the value stream ““flowflow””
““pulledpulled”” by the market (triggering flow by the market (triggering flow
from the customer needs)from the customer needs)
5.5. ExcellenceExcellence: there is no end to the process : there is no end to the process
of minimising time, efforts, space, costs of minimising time, efforts, space, costs
and mistakes while offering a product or and mistakes while offering a product or
service which is closer and closer to what service which is closer and closer to what
customers actually want, need, expect or customers actually want, need, expect or
dream ofdream of……..
The key to WCP: LEAN THINKINGThe key to WCP: LEAN THINKING
LEAN THINKING: what is it?LEAN THINKING: what is it?Based on 5 core concepts:Based on 5 core concepts:
Examples: Examples:
Airline: actual flying Airline: actual flying
Healthcare: receiving diagnosis/treatmentHealthcare: receiving diagnosis/treatment
Examples: Examples:
Airline: liningAirline: lining--up to checkup to check--in in –– security checksecurity check--in in
Healthcare: sitting in the waiting room waiting for an appointmeHealthcare: sitting in the waiting room waiting for an appointment nt
Other examples: checking, asking, fixing, second and third contaOther examples: checking, asking, fixing, second and third contacts, rects, re--doingdoing……..
The key to WCP: LEAN THINKINGThe key to WCP: LEAN THINKING
LEAN THINKING: what is it?LEAN THINKING: what is it?Definitions:Definitions:
�� ValueValue--adding activityadding activity: any activity that : any activity that
contributes directly to satisfy the needs of the contributes directly to satisfy the needs of the
customerscustomers
�� NonNon--valuevalue--addingadding: anything that takes time or : anything that takes time or
resources but does not contribute directly to resources but does not contribute directly to
satisfy the needs of the customerssatisfy the needs of the customers
94
The key to WCP: LEAN THINKINGThe key to WCP: LEAN THINKING
LEAN THINKING: what is it?LEAN THINKING: what is it?
�� Reduce the steps by halfReduce the steps by half
Very preliminary targets:Very preliminary targets:
�� Reduce the errors by halfReduce the errors by half
�� Reduce the time by halfReduce the time by half
Subsequent targets:Subsequent targets:
�� Cut the steps to VA onlyCut the steps to VA only
�� Cut the time to VACut the time to VA--TimeTime
�� Zero defectsZero defects
scrapscrap--yard operations yard operations -- 11
EXERCISE???EXERCISE???
……..oh, yes!!!..oh, yes!!!
Flow Processing in any IndustryFlow Processing in any Industry
95
RESISTANCE TO LEAN TRANSITIONRESISTANCE TO LEAN TRANSITION
The key to WCP: LEAN THINKINGThe key to WCP: LEAN THINKING
LEAN THINKING: resistanceLEAN THINKING: resistance
�� Opposition thinkingOpposition thinking::
�� Batch vs. one piece flow mentalityBatch vs. one piece flow mentality
�� Fight fires vs. Fight fires vs. ““ask why 5 timesask why 5 times””
�� Push vs. pull (anticipate) mindsetPush vs. pull (anticipate) mindset
�� It will feel wrongIt will feel wrong…… taking apart taking apart
something that has taken years something that has taken years
to buildto build……
the the ““conveyorconveyor”” mentalitymentality
LEAN THINKING: resistanceLEAN THINKING: resistance
96
the the ““conveyorconveyor”” mentalitymentality
LEAN THINKING LEAN THINKING –– who cares?who cares?
�� Worker/employeeWorker/employee: : “…“…why should I why should I
care?care?””
�� Supervisors/foremenSupervisors/foremen: : “…“…we have we have
always done this wayalways done this way…”…”
�� ManagerManager: : “…“…with this workwith this work--force, force,
what do you expect?what do you expect?””
�� Top ManagementTop Management: : “…“…if the results if the results
($) are there, why care?($) are there, why care?””
SmithSmith’’s circle is closed!s circle is closed!
97
�� 5W2H5W2H
The key to WCP: LEAN THINKINGThe key to WCP: LEAN THINKING
LEAN THINKING: the toolsLEAN THINKING: the toolsSome of the tools for seeing waste:Some of the tools for seeing waste:
�� Bar ChartsBar Charts
�� Time ObservationTime Observation
�� TaktTakt TimeTime
�� SOCO (5S)SOCO (5S)
�� Value Stream MappingValue Stream Mapping
�� Production Control BoardProduction Control Board
�� Communication circleCommunication circle�� Flow chartFlow chart
�� Spaghetti diagramSpaghetti diagram
�� TRIZTRIZ
�� 5WHYs5WHYs
and:and:
5W2H5W2H
LEAN THINKING: the toolsLEAN THINKING: the tools
�� WHAT?WHAT?
�� HOW MUCH?HOW MUCH?
�� HOW?HOW?
�� WHO?WHO?
�� WHEN?WHEN?
�� WHERE?WHERE?
�� WHY?WHY? amplifyamplify
98
5WHYs5WHYs
LEAN THINKING: the toolsLEAN THINKING: the tools
��WHY?WHY?
��WHY?WHY?
��WHY?WHY?
��WHY?WHY?
��WHY?WHY?
SPAGHETTI DIAGRAM SPAGHETTI DIAGRAM –– PRESENT STATUSPRESENT STATUS
telephone
motion/persons
motion/goods
motion/paper/fax
LEAN THINKING: the toolsLEAN THINKING: the toolsSpaghetti diagramSpaghetti diagram
99
LEAN THINKING: the toolsLEAN THINKING: the toolsCommunication CirclesCommunication Circles
issueissue John
Bill
George
Mary
Supplier
Bill
John
Example: TAKT TIME in HealthcareExample: TAKT TIME in Healthcare
�� If your customer demand is for 24 xIf your customer demand is for 24 x--rays/day rays/day
and your xand your x--ray tech is available 420 minutes ray tech is available 420 minutes
per day per day
TaktTakt time: 420 time: 420 ÷÷ 24 = 17,5 minutes24 = 17,5 minutes
LEAN THINKING: the toolsLEAN THINKING: the toolsTaktTakt TimeTime
TAKT TIME =TOTAL AVAILABLE WORK TIME
CUSTOMER DEMAND
TaktTakt Time sets the pace of production to Time sets the pace of production to
match the rate of customer demandmatch the rate of customer demand
100
LEAN THINKING: the toolsLEAN THINKING: the toolsTime ObservationTime Observation
�� With Time Observations you determine With Time Observations you determine ““how longhow long”” it takes it takes
to do the taskto do the task
Get close to the work Get close to the work
Video record Video record
See in detail See in detail
See the waste See the waste
Quantify waste Quantify waste
Classify wasteClassify waste
�� Time Observation is a tool to help you Time Observation is a tool to help you ““seesee”” waste, by waste, by
seeing the nonseeing the non--valuevalue--adding steps in detailadding steps in detail
�� Time Observations are NOT Time Observations are NOT ““Time StudiesTime Studies”” (Time & (Time &
MotionMotion……..)..)
LEAN THINKING: the toolsLEAN THINKING: the toolsBar ChartBar Chart
�� Displays Time Observation dataDisplays Time Observation data
1) for activities performed by 1) for activities performed by
an individual personan individual person
TARGET
101
LEAN THINKING: the toolsLEAN THINKING: the toolsBar ChartBar Chart
�� Displays Time Observation dataDisplays Time Observation data
1) for activities performed by 1) for activities performed by
several personsseveral persons
How many How many
people do people do
you need?you need?
??
LEAN THINKING: the toolsLEAN THINKING: the toolsThe main tool:The main tool:
The main The main Lean Lean
ThinkingThinking tool and tool and
the common the common
denominator to all denominator to all
other toolsother tools……
102
YEARS 2000YEARS 2000
FACTORS OF COMPETITIVENESSFACTORS OF COMPETITIVENESS
C r e a t i v i t yC r e a t i v i t y
the 6 thinking hatsthe 6 thinking hats
103
scrapscrap--yard operations 2 yard operations 2 –– scrap cansscrap cans
EXERCISE???EXERCISE???
……..oh, yes!!!..oh, yes!!!
Flow Processing in any IndustryFlow Processing in any Industry
scrapscrap--yard operations 2 yard operations 2 –– scrap cansscrap cans
104
……are are Lean ThinkingLean Thinking
and and Flow ProcessFlow Process
principles and principles and
techniques suited techniques suited
to all industries?to all industries?
yes!!yes!!
The answer is always:The answer is always:
105
Flow ProcessingFlow Processing
Lean Thinking in the Service IndustryLean Thinking in the Service Industry
spot the waste!spot the waste!
Service IndustryService Industry
A GLORIOUS WEDDING
A FISHY EVENING
CONVENTIONS
106
look at the pearls!look at the pearls!
(Service Industry)(Service Industry)
The The ““pearlspearls”” in the Service Industryin the Service Industry
drop your commentsdrop your comments……
to the floor!to the floor!
107
Flow Processing in the Service IndustryFlow Processing in the Service Industry
The Service Industry offers numerous examples of good, The Service Industry offers numerous examples of good,
Flowing Processes and bad, nonFlowing Processes and bad, non--Flowing ProcessesFlowing Processes…………....
EXAMPLES
POKAPOKA--YOKE FLOW PROCESSINGYOKE FLOW PROCESSING
EXERCISE???EXERCISE???
……..oh, yes!!!..oh, yes!!!
Flow Processing in the Service IndustryFlow Processing in the Service Industry
108
IDEAMATRIXIDEAMATRIX
features, characteristicsfeatures, characteristics……. go here. go here
PP
RR
OO
VV
OO
CC
AA
TT
II
OO
NN
WW
OO
RR
DD
SS
ideaidea
Sometimes itSometimes it’’s difficult to do things right the first time, without mistakes:s difficult to do things right the first time, without mistakes: there can be problemsthere can be problems……..
Flow Processing in the Service IndustryFlow Processing in the Service Industry
��Target: transform a dissatisfied client into a (very) satisfied Target: transform a dissatisfied client into a (very) satisfied
one!one!
��The The SRPSRP intervention must care of the customer first and intervention must care of the customer first and
then of his/her problemthen of his/her problem
��the the SR ProcessSR Process must be: top priority must be: top priority -- extremely fast extremely fast -- lean lean --
and simpleand simple……..
��The challenge: what is important is the The challenge: what is important is the ““Service Recovery Service Recovery
ProcessProcess”” (there is only one more chance to get things right!!)(there is only one more chance to get things right!!)
(hotel room not ready…. lost suitcase….)
��Frontline Personnel Frontline Personnel empowermentempowerment: essential!: essential!
109
BRABRA--FITTINGFITTING
EXERCISE???EXERCISE???
……..oh, yes!!!..oh, yes!!!
Flow Processing in the Service IndustryFlow Processing in the Service Industry
Deploying VSM and other LT Deploying VSM and other LT
tools in other tools in other
Industries/ProcessesIndustries/Processes
a) healthcarea) healthcare
110
Deploying VSM and other LT Deploying VSM and other LT
tools in other tools in other
Industries/ProcessesIndustries/Processes
b) administrationb) administration
EXERCISE????EXERCISE????
……oh, yes!!!!oh, yes!!!!a hiccup processa hiccup process……
COMPLEX PROCESSES, INVOLVING SEVERAL PERSONS COMPLEX PROCESSES, INVOLVING SEVERAL PERSONS
or DEPARTMENTS, OFTEN ORIGINATE ERRORS or DEPARTMENTS, OFTEN ORIGINATE ERRORS
111
Lean Project Lean Project
ManagementManagement
Lean Thinking in the Project IndustryLean Thinking in the Project Industry
Lean Construction Lean Construction
ManagementManagement
TRADITIONALTRADITIONAL
basicsbasics
PROJECT MANAGEMENTPROJECT MANAGEMENT
112
TRADITIONAL PROJECT MANAGEMENTTRADITIONAL PROJECT MANAGEMENT
PROJECT PARAMETERSPROJECT PARAMETERS
TRADITIONAL PROJECT MANAGEMENTTRADITIONAL PROJECT MANAGEMENT
113
key principleskey principles
TRADITIONAL PROJECT MANAGEMENTTRADITIONAL PROJECT MANAGEMENT
key principleskey principles
TRADITIONAL PROJECT MANAGEMENTTRADITIONAL PROJECT MANAGEMENT
114
the needthe need……
Typical symptoms of Projects with low Typical symptoms of Projects with low
PROJECT MANAGEMENT contentPROJECT MANAGEMENT content
��Costs : too high, and anyhow exceeding budgetCosts : too high, and anyhow exceeding budget
��PenaltiesPenalties
��Project Termination : long, painful, with hiccupsProject Termination : long, painful, with hiccups
��Delays on completionDelays on completion
��Project Start : slow, hesitant, difficultProject Start : slow, hesitant, difficult
��Personnel turnover within Project TeamPersonnel turnover within Project Team
��Efforts : duplicated/doubled upEfforts : duplicated/doubled up
115
Typical symptoms of Projects with low Typical symptoms of Projects with low
PROJECT MANAGEMENT contentPROJECT MANAGEMENT content��Inefficient resources utilisationInefficient resources utilisation
��Waste Waste -- Rejects and DefectsRejects and Defects
��Stress, pressure, anxiety, ineffectiveness, inadequacy, lack of Stress, pressure, anxiety, ineffectiveness, inadequacy, lack of
readiness to take up responsibilities, lack of flexibility, readiness to take up responsibilities, lack of flexibility,
frequent misunderstandings, tendency to "pass the buck", frequent misunderstandings, tendency to "pass the buck",
dede--motivation, rigidity...........motivation, rigidity...........
��High level of contingencies High level of contingencies –– unforeseen and unexpected unforeseen and unexpected
occurrencesoccurrences
��Time factor and Quality standards not complied with by suppliersTime factor and Quality standards not complied with by suppliers
and suband sub--contractorscontractors
��Dissatisfaction : of Client Dissatisfaction : of Client -- of Consultants of Consultants -- within Project Team within Project Team ––
within General Managementwithin General Management
��Wrong person acting as Project ManagerWrong person acting as Project Manager
��General Management and/or Functional Managers lacking General Management and/or Functional Managers lacking
knowledge of Project Manager's roleknowledge of Project Manager's role
��Project Manager lacking knowledge of his role and functionsProject Manager lacking knowledge of his role and functions
��No person responsible for the project as a whole : no Project No person responsible for the project as a whole : no Project
Manager (or too many...)Manager (or too many...)
��Non realistic estimation/budgetingNon realistic estimation/budgeting
��Projects not dealt with as suchProjects not dealt with as such
Likely causes:Likely causes:
��Inadequate CommunicationInadequate Communication
��Project Manager lacking human resources managing abilitiesProject Manager lacking human resources managing abilities
��Project Team not adequately structured by Project ManagerProject Team not adequately structured by Project Manager
��Project's Project's objective(sobjective(s) not sufficiently defined/clarified) not sufficiently defined/clarified
116
��Non realistic Planning and/or SchedulingNon realistic Planning and/or Scheduling
��Non integrated PLANNING and CONTROLNon integrated PLANNING and CONTROL
��Project Manager lacking administrative capacityProject Manager lacking administrative capacity
��Project Manager autonomy too limited/non adequateProject Manager autonomy too limited/non adequate
��Excessive conflicts Excessive conflicts -- PM lacking conflicts management abilitiesPM lacking conflicts management abilities
��Project Manager lacking strategic abilitiesProject Manager lacking strategic abilities
Likely causes:Likely causes:
��Non adequate Project Cost Control SystemNon adequate Project Cost Control System
��Human resources under excessive stressHuman resources under excessive stress
��Too many and too sudden changes of any natureToo many and too sudden changes of any nature
��Project Manager lacking commercial abilitiesProject Manager lacking commercial abilities
��Project Manager lacking negotiation abilitiesProject Manager lacking negotiation abilities
117
118
conventional managementconventional management……
……and matrix managementand matrix management
119
never start a project unless all resources are availablenever start a project unless all resources are available……..
120
PLANNINGPLANNING
PROGRAMMINGPROGRAMMING
SCHEDULINGSCHEDULING
CONTROLLINGCONTROLLING
121
LIFECYCLE OF PROJECT WITH POOR PLANNINGLIFECYCLE OF PROJECT WITH POOR PLANNING
Project initiationProject initiation
Wild enthusiasmWild enthusiasm
DisillusionmentDisillusionment
Wild chaosWild chaos
Search for the guiltySearch for the guilty
Punishment of the innocentPunishment of the innocent
Promotion of nonPromotion of non--participantsparticipants
Definition of the requirements (Planning)Definition of the requirements (Planning)
EXERCISE????EXERCISE????
……oh, yes!!!!oh, yes!!!!the OWP TUBES projectthe OWP TUBES project
122
THE BOTTOM LINETHE BOTTOM LINE……
Calculation Sheet
LEANLEAN
basicsbasics
PROJECT MANAGEMENTPROJECT MANAGEMENT
introducing:introducing:
123
Lean Project Lean Project
Management Management forewordforeword
WHY DO SOME PROJECTS FAIL?WHY DO SOME PROJECTS FAIL?
LEAN PROJECT MANAGEMENTLEAN PROJECT MANAGEMENT forewordforeword
124
““the project/construction the project/construction
industry is in some ways not industry is in some ways not
completely shifted from craft completely shifted from craft
to mass production to mass production -- much much
less to lean productionless to lean production””
LEAN PROJECT MANAGEMENTLEAN PROJECT MANAGEMENT
on the other hand, the industry has followed the mass on the other hand, the industry has followed the mass
production model in its extensive division of labour production model in its extensive division of labour
LEAN PROJECT MANAGEMENTLEAN PROJECT MANAGEMENTthe main consequences:the main consequences:
WASTEWASTE
DELAYS ON SCHEDULESDELAYS ON SCHEDULES
the 3 phenomena are strictly the 3 phenomena are strictly
interlinked and have a interlinked and have a
common denominator: an common denominator: an
inadequate style of thinkinginadequate style of thinking
COST OVERRUNSCOST OVERRUNS
125
EXAMPLES
spot the waste!spot the waste!
Construction Industry 1Construction Industry 1
EXAMPLES
spot the waste!spot the waste!
Construction Industry 2Construction Industry 2
126
�� MovingMoving
any correlation between what you have seen and your work of everany correlation between what you have seen and your work of every day?y day?
Any similitude?Any similitude?
�� Giving instructions Giving instructions –– Receiving instructionsReceiving instructions
�� Ordering things Ordering things –– SettingSetting--up things up things –– Making sure..Making sure..
�� ReportingReporting
�� AttendingAttending……
�� Meetings Meetings –– ““spotspot”” meetings in the passagemeetings in the passage……
�� Doing things Doing things ““in casein case”” –– or or ““why not?why not?””
�� PreparingPreparing
�� AnsweringAnswering
�� FilingFiling
Check list:Check list:
�� WaitingWaiting
�� ObservingObserving
�� Checking Checking –– Inspecting Inspecting -- SupervisingSupervising
�� Talking Talking –– Clarifying Clarifying –– Explaining Explaining –– IllustratingIllustrating……
�� Chatting Chatting -- Phoning Phoning –– Taking Taking ““thisthis”” callcall……
�� Putting pressure Putting pressure –– Chasing Chasing -- Expediting Expediting –– DealingDealing……
�� Managing Managing –– Authorising, approving Authorising, approving –– Getting rightGetting right……
Does all this create Does all this create
value for your clients?value for your clients?
LEAN PROJECT MANAGEMENTLEAN PROJECT MANAGEMENT��Traditionally, project/construction works are viewed and Traditionally, project/construction works are viewed and
modelled only as a series of modelled only as a series of conversionconversion (value(value--adding) adding)
activitiesactivities (activity/conversion(activity/conversion--centred or contractcentred or contract--
centred model)centred model)
For example,
waste activitieswaste activities
such as waiting,
offloading,
storing, moving
material, and
inspection are
not generally
modelled by
Critical Path
Models (CPM),
WBS (Works
Breakdown
Structure) or
other planning
or control tools.
127
LEAN PROJECT MANAGEMENTLEAN PROJECT MANAGEMENTanalysis of traditional planning inadequaciesanalysis of traditional planning inadequacies
��In project/construction works, the In project/construction works, the
effective point of intervention has effective point of intervention has
proven to be the proven to be the Weekly Work PlanWeekly Work Plan, ,
because that is where decisions are because that is where decisions are
made, work is selected and scheduled made, work is selected and scheduled
and commitments are made.and commitments are made.
��Generally and traditionally, a Generally and traditionally, a bar chartbar chart is is
produced showing the durations and produced showing the durations and
sequencing of assignments by subsequencing of assignments by sub--crew for crew for
each day of the week. The bareach day of the week. The bar--chart is often chart is often
literally literally ““thrownthrown”” at supervisors/foremen.at supervisors/foremen.
LEAN PROJECT MANAGEMENTLEAN PROJECT MANAGEMENTanalysis of traditional planning inadequaciesanalysis of traditional planning inadequacies
however, having such a bar chart on hand and using
it effectively may be two very different things…
128
��PlanningPlanning (schedules, budgets, etc.) collectively tell project (schedules, budgets, etc.) collectively tell project
personnel what they personnel what they SHOULDSHOULD do.do.
��Project ManagementProject Management thereafter thereafter monitorsmonitors and and enforcesenforces
conformanceconformance of of DIDDID to to SHOULDSHOULD. .
PlanningPlanning takes place before project execution. takes place before project execution.
ControlControl takes place during/after project execution. takes place during/after project execution.
Scheme:Scheme:
planning the work
executing the plan
SHOULDSHOULD
project objectivesproject objectives
datadata
informationinformation
resourcesresources DIDDID
PM ControlPM Control
LEAN PROJECT MANAGEMENTLEAN PROJECT MANAGEMENTanalysis of traditional planning inadequaciesanalysis of traditional planning inadequacies
��Everything works fine until Everything works fine until ““somethingsomething”” goes wronggoes wrong -- then a then a
chain reaction takes place chain reaction takes place -------- > > delays over delaysdelays over delays
��Then, more and more Then, more and more pressurepressure is put on everyone in the is put on everyone in the
chain to produce more, fasterchain to produce more, faster
��This usually This usually makes things worse rather than bettermakes things worse rather than better
��Working under pressure results in ever more nonWorking under pressure results in ever more non--productive productive
time, detime, de--moralises supervision, and directs energy and moralises supervision, and directs energy and
attention toward attention toward ““fire fightingfire fighting”” rather than learning rather than learning
how to work well in the first instancehow to work well in the first instance
If this traditional approach to planning worked perfectly,
DID would always match SHOULD
Statistics reveal that what actually gets done differs from
what is supposed to be done at least 1/3 of the time
LEAN PROJECT MANAGEMENTLEAN PROJECT MANAGEMENTtraditional planningtraditional planning
129
LEAN PROJECT MANAGEMENTLEAN PROJECT MANAGEMENT
taking the lean waytaking the lean way
wayway
the leanthe lean
takingtaking
views Engineering & views Engineering &
Construction Projects as Construction Projects as
fast, continuous fast, continuous Flow Flow
ProcessesProcesses, in which only , in which only
conversions add valueconversions add value
LEAN PROJECT MANAGEMENTLEAN PROJECT MANAGEMENTthe lean philosophythe lean philosophy
130
Based on the same 5 Core Principles as Lean Thinking:Based on the same 5 Core Principles as Lean Thinking:
LEAN PROJECT MANAGEMENTLEAN PROJECT MANAGEMENT
1.1.ValueValue
5.5.ExcellenceExcellence
4.4.PullPull
3.3.FlowFlow
2.2.Value StreamValue Stream
specific tools/techniques for:specific tools/techniques for:
LEAN PROJECT MANAGEMENTLEAN PROJECT MANAGEMENT
the the ““Last PlannerLast Planner”” approachapproach
the PPC and its intelligent usethe PPC and its intelligent use
131
THE LAST PLANNER: ShouldTHE LAST PLANNER: Should--CanCan--WillWill
Last PlannersLast Planners are expected to make commitments are expected to make commitments
((WILLWILL) to doing what ) to doing what SHOULDSHOULD be done, only to the be done, only to the
extent that it extent that it CANCAN be done in a be done in a lean fashionlean fashion
Last Planner
(waste removal)
SHOULDSHOULD
CANCAN WILLWILL
LEAN PROJECT MANAGEMENTLEAN PROJECT MANAGEMENTlean planning and the lean planning and the ““last plannerlast planner””
the the LAST PLANNER LAST PLANNER mechanismmechanism
LEAN PROJECT MANAGEMENTLEAN PROJECT MANAGEMENTlean planning and the lean planning and the ““last plannerlast planner””
WILL BE DONEWILL BE DONE
CAN BE DONECAN BE DONE
constraints & unforeseen/s eliminationconstraints & unforeseen/s elimination
hence: REALISTIC LOADING of PU resourceshence: REALISTIC LOADING of PU resources
waste reduction/elimination from PU work waste reduction/elimination from PU work
package or activitypackage or activity
hence: SOUND ASSIGNMENThence: SOUND ASSIGNMENT
132
project objectivesproject objectives
initial planningdatadata
informationinformationSHOULDSHOULD
adjusted planningADJUSTEDADJUSTED
SHOULDSHOULD
last planner
work execution
WILLWILL
DIDDID
status +status +
forecastsforecasts
resourcesresources
CANCAN
PM ControlPM Control
Match:Match:
SHOULD toSHOULD to
ADJ. SHOULDADJ. SHOULD
Match:Match:
ADJ. SHOULDADJ. SHOULD
to WILLto WILL
Match:Match:
WILL to DIDWILL to DID
(PPC)(PPC)
LEAN PROJECT MANAGEMENTLEAN PROJECT MANAGEMENTlean planning and lean controllean planning and lean control
PPC is the heart of Lean Planning/ControlPPC is the heart of Lean Planning/Control
��the lean method consists in the lean method consists in systematic measuringsystematic measuring
��identifying reasons for nonidentifying reasons for non--completion (completion (5Why5Why))
��and tracing reasons back to root causes that can be and tracing reasons back to root causes that can be
eliminated to prevent repetitionseliminated to prevent repetitions
LEAN PROJECT MANAGEMENTLEAN PROJECT MANAGEMENTlean planning and lean controllean planning and lean control
Measuring PPC allows also to Measuring PPC allows also to distinguish between failures distinguish between failures
rooted in plan quality and failures to execute plansrooted in plan quality and failures to execute plans
Traditionally, we assume that all failures are execution Traditionally, we assume that all failures are execution
failures, whereas the vast majority of failures to complete failures, whereas the vast majority of failures to complete
planned work are rooted in the quality of plans.planned work are rooted in the quality of plans.
133
who is the who is the ““Last PlannerLast Planner””??
ideallyideally……..
everybody!everybody!
LEAN PROJECT MANAGEMENTLEAN PROJECT MANAGEMENT
Lean Project Lean Project
Management in Management in
MultiMulti--Project Project
situationssituations
the TOC approachthe TOC approach
134
THE BITHE BI--TUBE TUBE
PROJECTPROJECTANALYSISANALYSIS
can construction can construction
become different?become different?
look at this!!look at this!!
135
LEAN THINKINGLEAN THINKING
ANDAND
TECHNOLOGYTECHNOLOGY
LEAN THINKING AND TECHNOLOGYLEAN THINKING AND TECHNOLOGY
11stst –– PeoplePeople
Remember! In a lean environment:Remember! In a lean environment:
22ndnd –– Methods (lean)Methods (lean)
33rdrd -- TechnologyTechnology
136
LEAN THINKING AND TECHNOLOGYLEAN THINKING AND TECHNOLOGY
technology cul-de-sac
technology cul-de-sac
137
LEAN THINKINGLEAN THINKING
IN OTHERIN OTHER
PRINCIPLESPRINCIPLES
PROJECTPROJECT--DRIVEN INDUSTRIESDRIVEN INDUSTRIES
Spot the Waste!Spot the Waste!
Steel FabricationSteel Fabrication
EXAMPLES
138
LEAN THINKINGLEAN THINKING
ANDAND
SAFETYSAFETY
nonnon--lean safety exampleslean safety examples
139
LEAN THINKINGLEAN THINKING
ANDAND
THE CONTINUOUSTHE CONTINUOUS
PROCESS INDUSTRYPROCESS INDUSTRY
LEAN THINKING AND THE LEAN THINKING AND THE
CONTINUOUS PROCESS INDUSTRYCONTINUOUS PROCESS INDUSTRY
Targets:Targets:
c) c) assure the Flowassure the Flow: through TPM & other technical : through TPM & other technical
Maintenance disciplinesMaintenance disciplines
b) b) pull the Flowpull the Flow: relate Operations to the Market: relate Operations to the Market
a) a) balance the Flow:balance the Flow: through Continuous Flow techniquesthrough Continuous Flow techniques
140
LEAN THINKING AND THE LEAN THINKING AND THE
CONTINUOUS PROCESS INDUSTRYCONTINUOUS PROCESS INDUSTRY
��eliminate the residual waste around the Floweliminate the residual waste around the Flow
Additional Target:Additional Target:
EXAMPLES
The Control Room syndromeThe Control Room syndrome
141
Lean ThinkingLean Thinking
the Value Chainthe Value Chain
andand
Lean Thinking and the Value ChainLean Thinking and the Value Chain
How can things be How can things be
structured so that the structured so that the
enterprise does nothing enterprise does nothing
but add value, and does but add value, and does
that as rapidly as possible?that as rapidly as possible?
all thatall that’’s left are the time, the people and the s left are the time, the people and the
activities that add value for the customeractivities that add value for the customer
all the intermediate steps, all the intermediate time all the intermediate steps, all the intermediate time
and all the intermediate people are eliminatedand all the intermediate people are eliminated
key issueskey issues
supply s
ide
supply s
ide
dema
nd sid
e
dema
nd sid
e
142
RELATIONSHIP WITH RELATIONSHIP WITH
SUPPLIERS IN A SUPPLIERS IN A
WORLDWORLD--CLASS CLASS
ENVIRONMENTENVIRONMENTsupply s
ide
supply s
ide
143
VENDORS CLASSIFICATIONIV CLASS - "NORMAL"
SUPPLIER
III CLASS - "PERFORMING" SUPPLIER II CLASS - "INTEGRATED"
SUPPLIER (Operational Comakership)
I CLASS - "PARTNER"
SUPPLIER
(Business Comakership)
RELATIONSHIP
DEVELOPMENT
CONVENTIONAL APPROACH° Negotiation focused on price° Minimal infos & quality specs° Conflictual interests° Little reciprocal trust° Governed by contractual power° Single-order purchases with little exception° Short-term purchases horizon° Many suppliers
"IMPROVEMENT" APPROACH° Primary attention to quality/price ratio° Large infos° More reciprocal trust° Many open orders & extensive purchases planning° Start-up of long-term relationship° Reduction of suppliers number (= selection)° Some experimental comakership° Target: vendor's improvement° Decentralization of production and responsibilities
OPERATIONAL INTEGRATION° Great attention to "total" process° Long-term relationship regularly (+- yearly) reviewed° Open infos (including market's feed-back)° High level of trust° Mutually agreed vendor's "recovery" procedures° Price fluctuations allowed with mutually agreed criteria° Systematic (and jointly defined) vendor's Kaizen programs (price-quality-process)° Open orders as a rule° Consulting/training services to Vendor
STRATEGIC INTEGRATION° Great attention to common business° Open doors, open "value-chain" and open info system° Benchmarking together° Full trust: vendor thrives on vendee's business and vendee thrives on vendor's support to business° Top level agreement on policies and strategies° Proper business partnership with some suppliers
QUALITY
ISSUE
° Vendor responsible only for conformity to specs° Systematic acceptance Inspections/Tests° Max guarantee only on a 100% test basis (sampling/AQL techniques and free-pass carry high risk)° Some inspections at source° Some "formal" certification (2nd and 3rd party) of vendor's QA system
° Extensive certification of vendor's QA system° Vendor's rating on "absolute" quality° Start-up of "auto-certification" programs° Vendor responsible for conformity to use° Quality improvement programs imposed to vendor° Mix tests on acceptance/free-pass
° Extensive auto-certification° Focus on vendor's CWQC system° Quality guaranteed and auto-certified with jointly agreed criteria)° Vendor's global responsibility on consequences of non-conformities (product liability)° Free-pass with/without bonus° Integrated improvement programs (QA – TQM)
° Maintenance of auto- certification° Focus on GWQC° Co-design of quality specs and QFD° Free-pass as a rule° Vendor's globally responsible for end-user's satisfaction
LOGISTICS
° Buffer stocks: safe/necessary ° Start-up of JIT supplies (mainly Kanban)° Some buffer stocks
° JIT supplies (frequent/small-lots) directly to productive areas° No buffer stocks° Some synchro-supplies
° Global vendor's integration in vendee's productive flow – synchro supplies only° Common informatics and planning
PRODUCT-
PROCESS
DEVELOPMENT
° None/minimal vendor's involvement ° Some vendor's involvement° Vendee's imposition of vendor's process improvement programs
° Co-engineering & Co-design° Some common use of QFD° Some joint R & D investments
° Extensive, joint PPD and QFD° Extensive, joint R & D investments° Global involvement
EVALUATION
& RATING
° Price° Quality: compliance to specs° Reliability & Performance° Evaluation of QA system (2nd party certification)
° QA system evaluation/audit° Rating based on "absolute" quality° Evaluation/Rating based on Total Costs of (non-) quality
° Global Process capability audit° Evaluation and rating at Total Costs
° Global Vendor's Organization audit
MOTTO "Shop around for the best price" "Let's improve together" "The productive process starts at
vendor's premises"
"Let's make business together"
144
comakershipcomakership
the present and the futurethe present and the future
International Lean Supply Chain International Lean Supply Chain -- exampleexample
145
THE CLIENT IS THE THE CLIENT IS THE
KEY:KEY:
THE NEW DIMENSIONTHE NEW DIMENSION
dema
nd sid
e
dema
nd sid
e
146
the customerthe customer-- and marketand market--driven enterprisedriven enterprise
Enterprise committed to provide excellent quality Enterprise committed to provide excellent quality
and competitive products and services to satisfy the and competitive products and services to satisfy the
needs and wants of a wellneeds and wants of a well--defined market segmentdefined market segment
• Customers’ voice is of primary
importance
• Professional treatment/attention to
clients
• Courteous and responsive attitude
• Empathy and respectful attitude
• Clients are irrational: a pain in the
neck
• Customers: an obstacle to
Profitability
• Hostile and careless attitude
• “Take it or leave it” attitude
Attitudes toward
Customers
• Customers-driven
• Management by facts and data
• Product-driven
• Management by opinion
Basis for
Decision-making
• Buyer’s Market
• Targets at achieving increased Market
Share and long-term financial growth
• Seller’s Market
• Careless about lost customers (due
to poor customers’ satisfaction)
Marketing focus
• Customers’ satisfaction
• Market share
• Long-term Profitability
• Level of Quality & Productivity (Value)
• Bottom-line Financial Results
• Quick return on Investments
Measure of
Performance
• Long-term focus
• Projective Management
• Planning Process: strategically driven by
customers
• Short-term focus
• Reactionary Management
• Planning Process: through
Management by Objectives
Product and
Service Planning
CustomerCustomer--driven enterprisedriven enterpriseTraditional enterpriseTraditional enterprise
the customerthe customer-- and marketand market--driven enterprisedriven enterprise
147
• Provided according to customers’
requirements and needs
• Provided according to Enterprise’s
requirements/policy
Quality of
Product/Services
• Targeting at errors and defects
prevention
• Targeting at errors and defects
detection
Productive
Process Mangmt.
• Extensive teamwork practice between
Process Owners, Suppliers and
Customers
• Customers, Suppliers and
Operations people have nothing in
common
Style of
Operations
• Fastest time-to-market products and
services
• Customers can wait for products and
services
Product and
Service Delivery
• People are the enterprise’s greatest
resource
• People are an infinite source of
problems and a burden on the
enterprise
Orientation to
Personnel
• Continuous Process Improvement
• Conscious Performance Management
• Crisis Management
• Management by fear and intimidation
Improvement
Strategy
CustomerCustomer--driven enterprisedriven enterpriseTraditional enterpriseTraditional enterprise
the customerthe customer-- and marketand market--driven enterprisedriven enterprise
148
149
Lean Thinking is not only concerned with Lean Thinking is not only concerned with
waste eliminationwaste elimination from processesfrom processes……
……to the contrary, Lean Thinking is very much to the contrary, Lean Thinking is very much
concerned with concerned with conservation of valueconservation of value and and
enhancement/increase of valueenhancement/increase of value to the customersto the customers……
……for that, we must focus onfor that, we must focus on……..
ECONOMYECONOMY
OF THE NEWOF THE NEW
AND THREATSAND THREATS
OPPORTUNITIESOPPORTUNITIES
the market is, as always, full of opportunitiesthe market is, as always, full of opportunities…………..
150
OPPORTUNITIES: 1)OPPORTUNITIES: 1)
OPPORTUNITIES: 2)OPPORTUNITIES: 2)
151
OPPORTUNITIES: 3) the longest chainOPPORTUNITIES: 3) the longest chain
EXERCISE????EXERCISE????
……oh, yes!!!!oh, yes!!!!spot an opportunityspot an opportunity
152
Lean ThinkingLean Thinking
think like a customer!think like a customer!
andand
the Marketing/Sales Processthe Marketing/Sales Process
Lean Thinking applied to the Marketing/Sales ProcessLean Thinking applied to the Marketing/Sales Process
Marketing/Sales = process to Marketing/Sales = process to ““manufacturemanufacture”” customerscustomers
the process must include only those activities which are the process must include only those activities which are
necessary to add value from a customernecessary to add value from a customer’’s perspectives perspective
Process output: loyal, profitable, repeat customersProcess output: loyal, profitable, repeat customers
drilldrill
PUSH vs. PULLPUSH vs. PULL
example: leads generation (trade shows..)example: leads generation (trade shows..)
ONEONE--PIECE FLOWPIECE FLOW
market research market research ““in batchin batch”” ------ > >
continual research on a continual basiscontinual research on a continual basis
CELLULAR MANUFACTURINGCELLULAR MANUFACTURING
permanent, Xpermanent, X--functional work teams, dedicated to process functional work teams, dedicated to process
leads, QFD outputs, etc. in oneleads, QFD outputs, etc. in one--piece flow mode piece flow mode
153
Lean ThinkingLean Thinking
Office WorkOffice Work
andand
open debateopen debate
the deployment of TPM the deployment of TPM
principles in other principles in other
industrial sectorsindustrial sectors
open debateopen debate
154
Lean Thinking Lean Thinking
6 Sigma6 Sigma
vs.vs.
LT vs. 6 SigmaLT vs. 6 Sigma
155
LT vs. 6 Sigma: one possible LT solutionLT vs. 6 Sigma: one possible LT solution
LT vs. 6 Sigma: one possible LT solutionLT vs. 6 Sigma: one possible LT solution
156
Lean Thinking Lean Thinking
principles in principles in
developing new developing new
products/servicesproducts/services
a slight design mistakea slight design mistake
157
WORLD CLASS PRODUCT DEVELOPMENTWORLD CLASS PRODUCT DEVELOPMENT
The main The main ““StateState--ofof--thethe--ArtArt”” Disciplines are:Disciplines are:
�� QFD (Quality Function Deployment)QFD (Quality Function Deployment)
�� FMEA (Failure Mode and Effect Analysis)FMEA (Failure Mode and Effect Analysis)
�� FTA (Fault Tree Analysis)FTA (Fault Tree Analysis)
�� DE (Design of Experiments)DE (Design of Experiments)
�� MU (Multivariate Analysis)MU (Multivariate Analysis)
�� VA (Value Analysis) VA (Value Analysis)
�� VE (Value Engineering)VE (Value Engineering)
�� CE (Concurrent/Simultaneous Engineering)CE (Concurrent/Simultaneous Engineering)
essential: INTEGRATED APPROACHessential: INTEGRATED APPROACH
158
...another ...another ““TerminatorTerminator”” of of
Adam Smith theoriesAdam Smith theories……......
CONCURRENT ENGINEERINGCONCURRENT ENGINEERING
159
Lean Thinking and Software DevelopmentLean Thinking and Software Development
Manufacturing wastes translated to software development
Overproduction = Extra FeaturesOverproduction = Extra Features
Inventory = RequirementsInventory = Requirements
Extra Processing Steps = Extra StepsExtra Processing Steps = Extra Steps
Motion = Finding InformationMotion = Finding Information
Defects = Defects = DefectsDefects Not Caught by TestsNot Caught by Tests
Waiting = Waiting = WaitingWaiting, Including Customers, Including Customers
HOMEWORK???HOMEWORK???
..oh, yes!!!..oh, yes!!!
160
““LEANLEAN”” STATUS STATUS
SELFSELF--ASSESSMENTASSESSMENT
a worlda world--class class
projectproject--driven driven
enterpriseenterprise
161
LEAN THINKINGLEAN THINKING
THE EXCELLENCE TARGETTHE EXCELLENCE TARGET
IMPROVING PERFORMANCE: IMPROVING PERFORMANCE:
THE LEAN KAIZEN APPROACHTHE LEAN KAIZEN APPROACH
the bottomthe bottom--up approach to Performance Improvement has a name:up approach to Performance Improvement has a name:
162
systematic and methodical approach, topsystematic and methodical approach, top--
driven, codriven, co--ordinated and supported, ordinated and supported,
to continuous improvement towards an to continuous improvement towards an
"excellent, lean status" target in various "excellent, lean status" target in various
organisational and operational areas;organisational and operational areas;
in a "stepin a "step--byby--step" fashion;step" fashion;
and with deep, active involvement of those and with deep, active involvement of those
concerned in each improvement areaconcerned in each improvement area
today's KAIZENtoday's KAIZEN
increase in effectiveness increase in effectiveness
and/or efficiency of processesand/or efficiency of processes
(all the rest might be spurious, fictitious (all the rest might be spurious, fictitious
improvement)improvement)
IMPROVEMENTIMPROVEMENT
��PREVENTIVE ACTIONSPREVENTIVE ACTIONS
��CORRECTIVE ACTIONSCORRECTIVE ACTIONS
throughthrough
163
the piers the piers
of Kaizenof Kaizen
164
KAIZEN & TEIKAIZEN & TEI
.....if he only knew how.....!.....if he only knew how.....!
.....the person doing the job .....the person doing the job
knows far more than anyone knows far more than anyone
else as to the best way of else as to the best way of
doing that job, and therefore is doing that job, and therefore is
the one person best fitted to the one person best fitted to
improve it....improve it....
165
KAIZEN IS TEAMWORK!!!KAIZEN IS TEAMWORK!!!
verticallyvertically
horizontallyhorizontally
internallyinternally
externallyexternally
KAIZEN IS PROBLEMKAIZEN IS PROBLEM--SOLVINGSOLVING
THEORY AND PRACTICE THEORY AND PRACTICE
methodologies to approach methodologies to approach
problems and complexity:problems and complexity:��KK--T methodT method
��Brainstorming, Lateral Thinking & other Creative P/S Brainstorming, Lateral Thinking & other Creative P/S
techniquestechniques
��Critical Examination & other "global" ProblemCritical Examination & other "global" Problem--SolversSolvers
166
KAIZEN IS DECISIONKAIZEN IS DECISION--MAKING MAKING
ABILITY AND PRACTICE ABILITY AND PRACTICE
methodologies to approach the methodologies to approach the
decisiondecision--making process:making process:
��Archer methodArcher method
��optimisation methodsoptimisation methods
��elimination and evaluation chartselimination and evaluation charts
��decision trialdecision trial--balance methodbalance method
��matrix techniquesmatrix techniques
a marketing problema marketing problem
EXERCISE???EXERCISE???
……..oh, yes!!!..oh, yes!!!
167
KAIZEN IS INTELLIGENT USE KAIZEN IS INTELLIGENT USE
OF THE OLD & NEW TOOLS FOR OF THE OLD & NEW TOOLS FOR
LEAN IMPROVEMENTLEAN IMPROVEMENT
��Data Collection Chart, Scatter Diagram, Control ChartsData Collection Chart, Scatter Diagram, Control Charts
��Graphs, Histograms, Pareto Diagram, ABC analysisGraphs, Histograms, Pareto Diagram, ABC analysis
��Cause and Effect (Ishikawa) Diagram, Relations Diagram Cause and Effect (Ishikawa) Diagram, Relations Diagram
Affinity Diagram, CEDAC, Arrow Diagram, FlowAffinity Diagram, CEDAC, Arrow Diagram, Flow--ChartsCharts
��Tree (Systematic) Diagram, Matrix Diagrams, PTree (Systematic) Diagram, Matrix Diagrams, P--M M
AnalysisAnalysis
��FMEA/FMECA MethodsFMEA/FMECA Methods
��Radar (Spider) ChartsRadar (Spider) Charts
��and all LEAN THINKING tools and techniquesand all LEAN THINKING tools and techniques
KAIZEN IS KAIZEN IS
CULTURAL CULTURAL
CHANGECHANGE
168
teamteam--workwork
does it work?does it work?
teamteam--workworkteamteam--workwork
teamteam--workwork
TeamTeam--work work –– the solution?the solution?
The principle of working in team to tackle The principle of working in team to tackle
all sorts of organisational and technical all sorts of organisational and technical
issues has been discovered several issues has been discovered several
decades agodecades ago……..
Project TeamsProject Teams
……and and MeetingsMeetings: Board Meetings : Board Meetings -- Management Management
Meetings Meetings –– Department Meetings Department Meetings –– InterInter--functional functional
Meetings Meetings –– Production Planning Meetings Production Planning Meetings –– etc. etc.etc. etc.
BUT:BUT:
InterInter--functional Teamsfunctional TeamsImprovement TeamsImprovement Teams
ReRe--engineering Teamsengineering Teams
Quality CirclesQuality Circles
Kaizen TeamsKaizen Teams
6 Sigma Teams6 Sigma Teams……
169
…….do you recall at least one .do you recall at least one
meeting from which you (or meeting from which you (or
someone else) came out someone else) came out unun--
satisfiedsatisfied? or a bit ? or a bit frustratedfrustrated? or ? or
possibly possibly stressedstressed??
TeamTeam--work work –– the solution?the solution?
……not to mentionnot to mention
confusedconfusedirritatedirritated
annoyedannoyed
intimidatedintimidated
perturbedperturbed bored to deathbored to death
humiliatedhumiliated
angryangry
horrifiedhorrified
exhaustedexhausted terrorisedterrorised……..???..???
BUT:BUT:
Meetings and teamMeetings and team--work are work are
not necessarily associated not necessarily associated
with high involvement and with high involvement and
effective improvement nor do effective improvement nor do
represent the sole/best answer represent the sole/best answer
to kaizen improvementto kaizen improvement…………
TeamTeam--work work –– the solution?the solution?
170
……oh, yes !!!!oh, yes !!!!
team exercising team exercising
TeamTeam--work work –– does it work?does it work?
EXERCISE????EXERCISE????
the nerdthe nerd
Lean Thinking and PEOPLELean Thinking and PEOPLE
and: the importance of Top Management commitment and: the importance of Top Management commitment
in implementing a LT programin implementing a LT program
171
PEOPLE IN INDUSTRYPEOPLE IN INDUSTRY
Fishermen (Hunters)
Engine (train) Drivers
Doctors
Farmers
172
EFFECTIVE HR MANAGEMENT STRATEGIESEFFECTIVE HR MANAGEMENT STRATEGIES
……if a person at the top is the most important, see what if a person at the top is the most important, see what
happens if a person at the bottom walks awayhappens if a person at the bottom walks away……..
173
As people's best motivations come from their As people's best motivations come from their own own
ideasideas, TEI stimulates people to release, in a , TEI stimulates people to release, in a
channelled mode, their channelled mode, their own creative energyown creative energy
for the benefit of the Customers, the Organisation's for the benefit of the Customers, the Organisation's
and their ownand their own
TEI is TEI is everyoneeveryone in the Organisation deeply involved, in the Organisation deeply involved,
using own using own brain powerbrain power, in , in problemproblem--solvingsolving, , learning, ,
continuous improvementcontinuous improvement activities, and systematic activities, and systematic
search for opportunitiessearch for opportunities
in a nutshell
HIGH (TOTAL) INVOLVEMENTHIGH (TOTAL) INVOLVEMENT
TEI is a system for organisational and people's TEI is a system for organisational and people's
changechange. .
It is a system that improves people's working It is a system that improves people's working
conditions by their own actions.conditions by their own actions.
TEI is a system for direct participation of people to TEI is a system for direct participation of people to
Organisation's success, by letting them take Organisation's success, by letting them take
responsibilitiesresponsibilities. .
TEI wants people to be responsible for their own TEI wants people to be responsible for their own
motivation and their own improvement: simply by motivation and their own improvement: simply by
letting them know the letting them know the scorescore........
HIGH (TOTAL) INVOLVEMENTHIGH (TOTAL) INVOLVEMENT
in a nutshell
174
TEI is a system that TEI is a system that
stimulates people to stimulates people to
become become responsibleresponsible agentagent
for their own for their own securitysecurity..
HIGH (TOTAL) INVOLVEMENTHIGH (TOTAL) INVOLVEMENT
in a nutshell
…….responsible.responsible agentagent for for
their own their own securitysecurity……..
the worm
175
TEI represents a continuous TEI represents a continuous
challengechallenge to people, by letting them to people, by letting them
set the path to their set the path to their fulfilmentfulfilment at at
work, work, enjoyingenjoying the very process......the very process......
HIGH (TOTAL) INVOLVEMENTHIGH (TOTAL) INVOLVEMENT
in a nutshell
high involvement in manufacturinghigh involvement in manufacturing……..
176
multimulti--skill, multiskill, multi--functionfunction……..
high involvementhigh involvement……..
177
high involvementhigh involvement……..
getting highly involvedgetting highly involved……..
178
involvement: special cases involvement: special cases
involvement: special cases involvement: special cases
Necessary rolesNecessary roles……. . with simple job descriptions (1 with simple job descriptions (1 –– 2 items)2 items)
Retailing personnelRetailing personnel
Service establishments personnelService establishments personnel
Public officialsPublic officials
BottomBottom--ofof--thethe--ladder personnelladder personnel
179
The IWT triumph!The IWT triumph!
a worlda world--class exampleclass example
180
a practical model for TEIa practical model for TEI
181
LEAN THINKINGLEAN THINKING
andand
the LEARNING the LEARNING
ORGANISATIONORGANISATION
Public Public enemyenemy n. 1:n. 1:
brain lazinessbrain laziness
……and thinkingand thinking
THE SECOND INDUSTRIAL REVOLUTIONTHE SECOND INDUSTRIAL REVOLUTION
182
thinking and other featuresthinking and other featuresbefore midnightbefore midnight
Business:
specialisationspecialisation-formatted
after midnightafter midnight
Business:
integrationintegration-formatted
Automatic ThinkingAutomatic Thinking
(associated to specialised
jobs)
and/or
ExternallyExternally--guided Thinkingguided Thinking
(from Management above)
Hard, creative thinking
Value-generating thinking
SelfSelf--integratedintegrated Thinking
Both lead to:
Reactive ThinkingReactive Thinking (reaction to
the ambient/work before the
person)
Leads to:
Projective/ProProjective/Pro--active Thinkingactive Thinking
(controls and manages the
ambient/work before the
person)
Based on brainbrain--lazinesslaziness :
needs external authorityexternal authority
to be governed
Based on own brainbrain--
powerpower : has the authority
internally
Suitable for fragmented
bits of work (work
formatted Adam Smith
style)
Suitable for
integrated flow of
work (a process)
before midnightbefore midnight after midnightafter midnight
thinking and other featuresthinking and other features
183
MaintainsMaintains only (it may even
destroy...)BuildsBuilds, achieves, generates
wealth
Keeps people busy at making
things going (deceiving
oneself to be working hard)
Makes people stick to value
generation (working hard for
production of Value)
Self-integrated Thinking
discouraged (dangerous !!)
Self-integrated Thinking
promoted (essential !!!)
before midnightbefore midnight after midnightafter midnight
PushPush functioning, top-
driven/imposedPullPull functioning, market/client-
driven
thinking and other featuresthinking and other features
COMPLEXITY: COMPLEXITY:
many people using specialised
thinking to control many
others using automatic and/or
externally-guided thinking.
Absurdity.
SIMPLICITYSIMPLICITY:
fewer people using hard,
integrated thinking,
empowered to manage value
generating processes - simply
controlled (in-process and in
real-time control through basic
indicators).
before midnightbefore midnight after midnightafter midnight
Based on “DELEGATIONDELEGATION"
which, in the majority of
cases, is not transmission of
responsibilities, but
evaporation of responsibilities
(fresh-air effect).
Based on EMPOWERMENTEMPOWERMENT
which is integral/total transfer
of responsibilities.
Empowering = transferring a
business mind to all bodies
concerned with value
generation
thinking and other featuresthinking and other features
184
Leads to stagnationstagnation (un-
integrated, cul-de-sac
responsibilities): people
stagnating into day-to-day
problems that get trapped with
Leads to wealthwealth (integrated
responsibilities & areas of
purpose): people
concentrating only onto value
generation
before midnightbefore midnight after midnightafter midnight
88--5 attitude5 attitude/mentality because
of little purpose or none at all Entrepreneurial attitudeEntrepreneurial attitude
because of areas of purpose
Personnel have little/no
purpose, therefore little/no
MOTIVATIONMOTIVATION. The typical
employee does not know,
does not feel, only has cul-de-
sac responsibilities....
Entrepreneur's attitude,
approach, MOTIVATIONMOTIVATION,
knowledge and sensations
because of areas of purpose
thinking and other featuresthinking and other features
Generally leads (in a
conscious or un-conscious
mode) to employees'
DISSATISFACTIONDISSATISFACTION - cul-de-
sac responsibilities are the
best guarantee of frustration,
stress and dissatisfaction
Generally leads to employees'
JOBJOB--SATISFACTIONSATISFACTION -
integrated responsibilities are
the essence of real values,
happiness and excitement
Motto: "...work is a necessary
evil..."
Motto: "...work is a gymnasium
in which people can practise,
test themselves, evolve,
develop, learn, grow, and be
happy and proud of the value
they produce..."
before midnightbefore midnight after midnightafter midnight
thinking and other featuresthinking and other features
185
Knowledge, associated to
specialised work, is the most
valuable asset: it must be
maintained, preserved and
protected
Knowledge is not as
important. The ability to
"learn" and the opening to
"learning" and perfecting
knowledge are most
important.
Traditional, static
Organisation
Dynamic, Learning
Organisation
before midnightbefore midnight after midnightafter midnight
thinking and other featuresthinking and other features
ENTERPRISE MANAGEMENT ENTERPRISE MANAGEMENT
in a lean environmentin a lean environment
““simple is beautiful!simple is beautiful!””
““small is beautiful!small is beautiful!””
186
small is beautiful!small is beautiful! -- 11
PaulanerPaulaner BrBrääuhausuhaus
Clock TowerClock Tower
Cape Town WaterfrontCape Town Waterfront
187
188
189
small is beautiful!small is beautiful! -- 22
Bakeries todayBakeries today
190
191
small is beautiful! small is beautiful! -- 33
2 small SA enterprises2 small SA enterprises
192
small is beautiful! small is beautiful! -- 44
williamwilliam
williamwilliam
193
small is beautiful! small is beautiful! -- 55
edithedith
edithedith
194
TOTAL EMPLOYEE TOTAL EMPLOYEE
PERFORMANCEPERFORMANCE
Beyond TEI
Why do all traditional HR management and Why do all traditional HR management and
motivational techniques somehow fail?motivational techniques somehow fail?
Management by Objectives, Effective Leadership, Diversification,Z Theory, Situational Leadership, Effective Communication, Zero-based-Budgeting, Decentralisation, Team Building, Management by Exception, Dale Carnegie techniques, Interpersonal Skills,
Quality Circles, Excellence, Restructuring, Portfolio Management, Interactive Management, Matrix Organisational Structure, Total
Quality Management, ISO 9000..... and One-Minute Managing......
TEI and beyond - TEP: TOTAL EMPLOYEE PERFORMANCE
195
“It is not a matter of applying
fine psychology, or of following
pipe-smoking top notch
consultants’ refined theories….
the philosophythe philosophy
TEI and beyond - TEP: TOTAL EMPLOYEE PERFORMANCE
…..it is just a matter of
understanding that time is due to
go back to basics: few, but clear,
core concepts - few, but well
identified, values – and, most of
all, simple, basic methods......
TEI and beyond - TEP: TOTAL EMPLOYEE PERFORMANCE
the philosophythe philosophy
196
Give a chance to people to perform, to be job-
satisfied, and to re-gain professional dignity,
by empowering them to be totally responsible
and accountable for a complete process, of
which they can understand the entity, the
parameters, the importance, the inputs, the
outputs, the client, the associated value, and
the performance measuring criteria.
TEI and beyond - TEP: TOTAL EMPLOYEE PERFORMANCE
the philosophythe philosophy
….give people a chance to be
craftsmen in their workshop,
or traders in their shop, in
strict contact with their
customers....
TEI and beyond - TEP: TOTAL EMPLOYEE PERFORMANCE
the philosophythe philosophy
197
…give people a chance to be
proud of the value they
generate, of the wealth they
create for themselves, and for
others......”
TEI and beyond - TEP: TOTAL EMPLOYEE PERFORMANCE
the philosophythe philosophy
Value ProducersValue Producers
…let people be responsible..
TEI and beyond - TEP: TOTAL EMPLOYEE PERFORMANCE
the philosophythe philosophy
198
Value ProducersValue Producers
…let people be responsible..
why worldwhy world--class enterprises class enterprises
do not suffer from the do not suffer from the
absenteeism plague? absenteeism plague?
open debateopen debate
199
….shift
from: TGIF
to: TGIM!!to: TGIM!!
TEI and beyond - TEP: TOTAL EMPLOYEE PERFORMANCE
a practical model for TEP
200
are there any examples of are there any examples of
TEP actually operational?TEP actually operational?
is the TEP scenario only suited to small businesses?is the TEP scenario only suited to small businesses?
201
The growth of an Enterprise does not The growth of an Enterprise does not
increase the number of valueincrease the number of value--
generating processes nor the generating processes nor the
number of basic responsibilities. number of basic responsibilities.
It is the way we have changed and It is the way we have changed and
manipulated industry that has manipulated industry that has
created an enormous number of created an enormous number of
““dummydummy””, fictitious responsibilities , fictitious responsibilities
(and functions).......(and functions).......
If the business volume grows, there are If the business volume grows, there are
various ways of dealing with it rather various ways of dealing with it rather
than building pyramids. For instance:than building pyramids. For instance:
��a manufacturing enterprise a manufacturing enterprise ““without a factorywithout a factory””
��““parallelparallel””, horizontal processes, horizontal processes
��one or more one or more ““replicareplica”” of the original businessof the original business
��a a ““company without a companycompany without a company””
202
a a ““company without a factorycompany without a factory””
““ReplicasReplicas””, , ““Parallel ProcessesParallel Processes””, ,
““Companies without a CompanyCompanies without a Company””, and , and
other similar, new business styles have other similar, new business styles have
one very important feature in common: one very important feature in common:
they are they are
untouchable by untouchable by
SmithSmith’’s viruss virus
203
…….so, you would like your people to be:.so, you would like your people to be:
ResponsibleResponsible
EfficientEfficient
Serious and reliableSerious and reliable
Dedicated to their workDedicated to their work
Committed to improvementCommitted to improvement…………
CostCost--consciousconsciousAccountableAccountable
????????
????????????
…….so, you would like your people to be:.so, you would like your people to be:
Efficient Efficient –– Responsible Responsible -- CostCost--
conscious conscious -- Dedicated to their work Dedicated to their work --
Serious and reliable Serious and reliable –– Accountable Accountable ––
Committed to improvementCommitted to improvement………… --
???? ???? -- ????? ????? -- ??????????????????????????
204
..in a nutshell: you would like your people to..in a nutshell: you would like your people to
performperform
This is possible: it can be achievedThis is possible: it can be achieved……
…….it depends on you, .it depends on you,
entrepreneurs and managersentrepreneurs and managers……....
..it..it’’s just your choice..s just your choice..
But:But: there are 3 necessary stepsthere are 3 necessary steps……
205
…….you would like your people to be: responsible .you would like your people to be: responsible –– accountable accountable ––
efficient efficient -- dedicated to their work dedicated to their work –– committed to improvementcommitted to improvement…………
THE 3 NECESSARY STEPSTHE 3 NECESSARY STEPS
1) Understand the environmental 1) Understand the environmental
change and manage itchange and manage it
2) Be prepared to abandon the 2) Be prepared to abandon the
““formulaformula””
3) Have a clear direction and tell 3) Have a clear direction and tell
people about itpeople about it……..
4) 4) …….and something more.and something more……....
the Pygmalion effectthe Pygmalion effect
BELIEVE IN BELIEVE IN
PEOPLE!PEOPLE!
Mc Mc GregorGregor and the Xand the X--Y theoryY theory
206
LegaLega del del filofilo dd’’orooro
http://www.legadelfilodoro.itNon-profit Organisation – Osimo – Italy
Assisting the blind, deaf and dumb.
Communication: MALOSSI
207
…….so you would like your people to be: responsible .so you would like your people to be: responsible –– accountable accountable ––
efficient efficient -- dedicated to their work dedicated to their work –– committed to improvementcommitted to improvement…………
THE CHOICE IS YOURSTHE CHOICE IS YOURS……
methods
traditional
responsibilities
limited
waste
involvement
high
little/none
Job Satisfaction??Job Satisfaction??
…….so you would like your people to be: responsible .so you would like your people to be: responsible –– accountable accountable ––
efficient efficient -- dedicated to their work dedicated to their work –– committed to improvementcommitted to improvement…………
THE CHOICE IS YOURSTHE CHOICE IS YOURS……
methods
lean
value added
high
responsibilities
high
involvement
Job Satisfaction!!Job Satisfaction!!
high
208
Lean ThinkingLean ThinkingA course presented by Carlo A course presented by Carlo ScodanibbioScodanibbio
Organised by:Organised by:
CREDITSCREDITS
The documentary material of this course is based on papers and wThe documentary material of this course is based on papers and works of:orks of:
and on personal experience and development by Carlo and on personal experience and development by Carlo ScodanibbioScodanibbio
MUSIC BYMUSIC BY
Bach Bach –– Barry Barry -- Beethoven Beethoven –– Grieg Grieg –– HaydinHaydin -- Mozart Mozart –– MuffatMuffat –– Paganini Paganini -- Ponchielli Ponchielli ––
RimskyRimsky--Korsakov Korsakov -- Rossini Rossini –– R. Strauss R. Strauss -- Verdi Verdi -- Vivaldi Vivaldi –– Wagner & othersWagner & others
Copyright Copyright ©© Carlo Carlo ScodanibbioScodanibbio 20092009
Lean ThinkingLean Thinking““““““““a cultural revolutiona cultural revolutiona cultural revolutiona cultural revolutiona cultural revolutiona cultural revolutiona cultural revolutiona cultural revolution””””””””
209
THE LEAN ENTERPRISE (Lean Thinking)
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