Kate Mackle, founder of Thinkflow Limited, talks about the importance of understanding the problems of a company before assessment can even hope to represent a useful to tool to measure how well the business is doing.
Imagine the scene. You enter the doctor’s consulting room. “What seems to be the trouble?” he says. You answer: “Well, I’ve been feeling very listless. Not as energetic as I usually am. And I’ve had one or two dizzy spells.” He asks: “How long have you been taking one aspirin a day?”; “how many marathons have you run in the last 5 years?”; “When do you aspire to move from Valium to Prozac?”
If you were a particularly reflective individual, sometime after running from the surgery in shock, you might ponder to yourself: “Why did he jump straight to assuming certain drugs were the answer, before he even knew what was wrong with me? And why did he presume such extreme exercise was appropriate when he could clearly see that I’m a stranger to the gym?”
In short, you’d think: “Why didn’t he diagnose what was wrong with me before jumping to conclusions?”
Thankfully, we’ve got the Medical Council to protect us from such bizarre behaviour from those who are responsible for looking after our health. Unfortunately, no such body exists to sanction those who seek to advise us on how to improve our companies. They are free to pedal endless derivatives of “lean assessment tools”, each purporting to help identify where we are on the lean journey and what we need to do more of to help us on the way.
You know the type of assessment I’m talking about. Score yourself from 1 to 5 on your application of the lean toolbox. Score 1 for carrying out a value stream map on one product family; score 5 for mapping all your value streams. Score 1 for having a model 5S area; score 5 for 5sing the whole plant. And so on.
Google “lean assessment” and you’ll find 33 million hits for this sort of thing: that’s a lot of anecdotal evidence that there’s a receptive audience who believe in the worth of such assessments – or that there’s a healthy industry in promoting this idea.
These are all great tools and very effective when used selectively, but where’s the diagnosis of the need? Where’s the judgement that to make the necessary change at this point in developing a lean system, this is the appropriate intervention to make?
Assessments by definition require a standard to assess against. This means that “lean assessments” purport to tell you how “lean” you are against some sort of standard of best practice. This betrays the thinking that somehow the state of “being lean” exists independently from your business type, circumstances and environment. This is equivalent to believing that there is a standard of good health which we can assess people against irrespective of age, gender and socioeconomic conditions.
Even worse, the degree of attainment against this “lean standard” is equated with the extent to which various tools and techniques have been applied: typically, these tools are those which have been popularised by their use in repetitive component assembly environments and are largely irrelevant to businesses operating in a complex low volume-high variety environment.
The brutal truth is that if you assess yourself against a model that tests for application of tools, you will be sucked into unthinking programmes of tool deployment. It’s a dangerous path to tread because you think you’re doing the right thing and can spend an enormous amount of time and effort getting a better score on the assessment grid, blissfully unaware that it’s made absolutely no difference to the business’ ability to win orders and make money.
THE IMPORTANCE OF SEQUENCE
One of the major weaknesses of conventional lean assessments is the absence of reference to sequence: where to start and what conditions do you need to have in place for the next stage of development. Instead, all tools are seen as equally useful at all times which leads to premature attempts to use tools which the environment is not yet ready to support or exploit.
For example, trying to use 5S to maintain workplace organisation in a plant where the assembly schedules are constantly interrupted by parts shortages: having a nicely-painted square where you put the jobs awaiting parts is not lean. It is no coincidence that people often have difficulty in sustaining 5S: it is a tool for visualising and maintaining the standard flow of work – it cannot create order where none exists.
Similarly, you need to know where to focus your loss reduction activities: where do we have the greatest need to improve availability and reduce variation? Doing a SMED activity on a non-constraint may be the right thing to do in a mature lean system if you want to reduce the lead time after the constraint: it’s not going to have any benefit if you’re not even managing the flow through the constraint.
Many of the tools in the lean toolbox help us standardise, communicate and solve problems: they help us to be more effective in organising our daily work and continuously improving how we do that work. Other tools help us improve availability and reduce variation: they help us make the process more reliable so that the flow of value to the customer is maintained. There’s nothing inherently wrong in using these tools for their own sake – if you can afford the luxury to do so.
Most organisations can’t: they need to know the most important improvement activities to do now with the limited resource available. They need to know what changes to make to the business to improve service, to be able to reliably take on new orders, to free up cash from inventory, to reduce operating costs without jeopardising sales, to invest with confidence. They need to know what improvements will have a fast and sustainable financial benefit. They won’t get this from lean assessments.
The answers to these pressing questions lie in understanding how the business could be more effective in matching its capacity and procurement to the demand of the customer. Get these decisions wrong and you’ll find yourself in the uncomfortable position of having taken on orders you can’t fulfil on time, tying up cash in inventory that’s not moving, with a headcount and costs that look untenable. Lean assessments are weak in this area because the whole of the lean movement treats demand, capacity and inventory management with a woeful simplicity. Turn to a lean assessment for direction and you’ll find yourself challenged as to how much you’re using kanban and pull systems: you are taking the cure before you’ve even understood your diagnosis.
It’s a testament to the belief in lean and the power of the results achieved that managers persist in trying to do the “right thing” instead of telling their lean advisors to shove it while they get on with saving the business. In fact, more intolerance of facile solutions would help the whole lean movement to get real: what managers need is a fast way to get better insight into the cause of their problems and an effective way of designing and implementing the solution.
Practical solutions emerge from applying thought and effort in conditions of real need: ironically, that’s one lesson from Toyota’s experience that we don’t hear much about – maybe because no-one has given it an exotic-sounding Japanese name. I could call it “GANBATTE” and make a fortune marketing it but instead I’m going to share with you an approach that’s emerged out of years of experience of lean implementation.
Joking aside, it’s a serious question: why are we performing so badly and how can we improve? You can answer that question once for businesses but if you don’t develop their thinking to be able to ask and answer the question again and again and again, they won’t be capable of sustainable continuous improvement – particularly when the performance no longer looks “so bad”. Faced with that challenge, a framework emerged over time that has proved useful in helping organisations diagnose the causes of their underperformance and design effective programmes to implement improvements. It’s a simple way of addressing the vital questions: where to start and what to do?
It’s called the “Thinkflow framework” because it does exactly what it says on the tin: if you “think flow” you will be led down the correct path towards improvement. However, just saying “think flow” would have been impossibly inscrutable from someone who clearly was not a Japanese sensei so the framework expands on the key elements of “thinking flow”.
There are four parts to the framework: Create Flow, Maintain Flow, Organise for Flow and Measure for Flow. In a real application, each part would be formed of questions to guide diagnosis and then to direct the design of solutions (that’s the part where the selective use of the lean tools comes in). A degree of customisation is required to make the framework relevant to the characteristics of the business but for the purposes of this article, the generic approach will be described.
It starts with “Create Flow”. This requires a thorough understanding of how the business manages the fulfilment of customer demand: how effectively are the planning and scheduling systems working? When we understand why these processes are not working, we’ve diagnosed the underlying cause of failure to give the customer what they want, when they want it: we’ve also understood why we don’t have the right material or resources at the right time. Out of this understanding emerges the definition of what needs to be changed to make the system capable of meeting customer demand: in practice, this means improving the planning and scheduling systems so that we create a flow of value. We can also quantify the financial consequences of the current state: what is the effect of poor service, lost sales, extra inventory and resources? That makes it very clear to the management team what the financial benefits can be from the improvements that are designed.
Once we know how we want value to flow, we need to know how to keep the flow going: what could stop the flow and how can we make sure the flow can be maintained? This is what we look at in “Maintain Flow”. It’s where we diagnose the causes of losses of availability and quality – and consequently where we can identify the need for tools which can reduce or eliminate those losses and thereby make the system more efficient. Because “Create Flow” has defined what’s constraining the flow of value, our decision-making regarding the deployment of these tools is automatically prioritised.
Designing the perfect flow system and making it work efficiently through focussed loss reduction activities is fine in theory but we know that in everyday operations, variation will occur and problems will happen. We need to ensure that everyone knows how the system should work, how it’s performing and how to resolve the problems that arise: we need to give people a context for continuous improvement and the skills to solve problems in a sustainable fashion. This is the purpose of many of the tools in the lean toolbox: they help the organisation deal with problems that stop the flow of value. In the framework, this is called Organise for Flow and deciding what’s needed in this area stems naturally from the system design decisions taken in the Create and Maintain Flow areas.
Having worked through Create, Maintain and Organise flow, a business will have diagnosed the causes of the underperformance in their current state and identified the major changes needed to design a future state. In doing so, they will have recognised the potential benefits of change and realised where current policies and measures are out of alignment with a focus on the flow of value to the customer. In the last part of the framework, Measure for Flow alerts the business to any measures which are inadvertently out of alignment with customer value and supports the definition of appropriate measures to monitor the effectiveness of the new system.
The corrective actions needed to improve performance are often accepted as necessary despite the fact that they are underpinned by a philosophy very different to that which informs conventional accounting practice. In fact, it is often not until later on, when you want the system to drive further improvement, that the outputs of the standard accounting methods can prove to be an impediment to further application of lean principles: measures which are believed to inform you about how to “take cost out” will obstruct thinking about how to “add value in”. See John Darlington’s article in this issue on page 20 to understand more about why this is.
Working through the Thinkflow framework will guide you through assessing your current ability to create flow, leading to the design of an improved system for delivering value to the customer. The selection of the appropriate tools to maintain and improve the system will emerge from this design. The tools themselves are not complex: you know them already or can readily learn what is needed when you need it. The critical point is that the need for the use of the tools will be self-evident when the requirements of the system to create a flow of value are clear.
The Thinkflow approach has been tested and refined over many years in a wide range of different businesses, and many organisations have experienced a step-change in the speed and effectiveness in achieving results from their lean activities by designing implementation programmes around the framework. There’s enough in this article to give you direction on getting started on this approach for yourself: GANBATTE!