Variation is inherent in engineering. Each job has different requirements, demands different skill sets, and requires different approaches. Traditional lean techniques aim to create stability by removing the variation, creating one-piece flow, and using kanban to pull. However, that approach won’t work in engineering since removing the variation will probably exclude the customer as well. Moreover, traditional flow and pull in the office is hard to do when each job is unique and each engineer is a shared resource. So how can engineering offices manage such high variation and complexity?
The answer is not removing the variation, but accepting it and designing value streams in the office that are capable of responding it.
The challenges of change
The process of engineering change notifications (ECNs), common in most engineering departments, is a good example for illustrating how to design value stream flow in engineering that can adapt to high variation.
ECNs are requests for a change to a product design or manufacturing process. They can be minor (a label change on package) or major (redesign with performance analysis). And they can come from within the organisation or from the customer. Changes from the customer often involve a customer-facing employee such as a programme manager, who receives or interprets the request for a change then passes it through engineering for the necessary design input, purchasing, finance to cost and price the changes, and then management for sign-off.
The Transformation Process
To redesign a complex office value stream such as ECNs within a large business, there is a five-step process:
1. Model sites. Identify a small number (one to three) of model sites where model ECN value streams will be designed and rapidly implemented. The key to selecting these locations is the energy of the local team, its willingness to learn and adapt to new ideas and processes, and the commitment to making real change to the existing value stream by participating in educational sessions and experimenting with and supporting new tools that will be deployed. Once the implementation is complete within the model sites, the methodology can be rolled out to other sites around the company.
2. Process families. A common source of frustration among ECN stakeholders globally is the volume, mix, and unpredictability of work coming in via ECNs. Since teams never know how many they are likely to get from one week to the next and can never be sure what they will contain, this high variability makes it difficult to plan resource availability, often leads to long lead times, and typically contributes to long work hours for employees.
The key to dealing with these issues is designing a future state ECN flow that accounts for and accommodates both the volume and the mix. The first step in this design is to create a detailed service family matrix. Using Microsoft Excel, project teams enter a meaningful sample of recent ECNs (at least 100) into a spreadsheet to analyse both process steps and process times and determine which path different ECNs take through the business and the total work content of each ECN. With this data, organisations can then group ECNs into families based on path and total work content, which will identify similar jobs that could effectively flow through the same value stream. It is important to note each family must be treated as a separate value stream.
Another benefit to clearly identifying service families is it enables a team to understand its capability and when it has been exceeded. A high volume of ECNs may not be an issue if they are all simple, but how many complex ECNs will it take to exceed the capability of the value stream? By funneling ECNs into a family based on some early indicator of complexity (identified by the service family matrix), teams will get an immediate indication as to whether they are within their normal capability (based on both volume and mix), or whether they need to change gears (takt capability modes) to get the work done. If a company neglects to create these families, it may miss the opportunity to understand when its capability has been exceeded. Careful analysis of service families is a key step which should not be skipped or rushed.
3. Value stream mapping. Next, detailed current state maps should be developed for each family, showing accurate process times, wait times, inventory piles, delays with customers and suppliers and, very importantly, rework generated by unclear inputs or bad handoffs.
With detailed current state maps in hand, the team can then apply the nine lean guidelines for business process flow to create end-to-end, self-healing flow throughout the entire value stream. This step-by-step method of transformation is key to success since it ensures flow is designed throughout the entire value stream, provides a clear future state design to which implementation results can be compared, and is teachable and repeatable throughout one site or all.
The nine lean guidelines for business process flow are:
- Takt capability – The designed output of the service family in terms of volume and mix.
- Continuous flow – Completing work in a process one, move one fashion.
- FIFO flow – Used when continuous flow is not viable, FIFO (first in, first out) is a form of flow in which work moves forward in sequence without priority changes, re-routes, or management decisions.
- Workflow cycles – The rate at which work moves or flows within or between different work areas or departments along a fixed pathway.
- Integration events – A formal handoff of information from one area of the company to another (this is not a meeting).
- Standard work – Activity-level standard work is the documentation of the best method for performing each task. Flow-level standard work describes how each activity is connected to the next.
- Designated sequencing points – Specific processes or processing cells at which work can be re-sequenced due to external factors.
- Pitch – A preset timeframe that lets everyone who works in the flow know whether it is on time in a visual manner.
- Changes in demand – Establishing multiple takt capabilities and creating the ability to toggle between them in order to respond to increases or decreases in customer demand.
After applying the nine guidelines, the next step is to create the future state showing how each of the guidelines was applied. It is crucial future state value stream maps in the office are designed using these nine guidelines rather than kaizen events and brainstorming
With ECNs, it’s best to start with the most complex family since the simpler families may be a less complicated subset of them, which then makes future state mapping of the less complex families more efficient. Then, work through the guidelines. The maps should only take a few days to create for each model.
4. Implementation: Implementation should be short and intensive (aim for completion within two months to maintain momentum). Each model site should use a detailed implementation plan showing each task required to make the future state a reality, task owners, and due dates. As a general rule, wherever there is a difference between a current state value stream map and a future state map, there must be at least one action item on the implementation plan to make the full future state flow a reality.
A good approach is to work by implementation loop by breaking the implementation plan into logical groups of activities and then moving through them one by one. Each map should have approximately two to four loops. The order of loop implementation should factor in metric impact, effects on downstream or upstream processes (the wrong order could flood or starve processes in the value stream), team capabilities, and the need for outside support such as IT or customer engagement.
5. Global deployment: Most large companies need to have several different value streams for processing ECNs at various sites based on differences in customer needs, issues specific to local operations, supplier availability, or differing product types. For example, there may be more service families at certain sites due to a larger range of work content. While the approach outlined here allows for customisation by site, it will also reduce the variability by region/division by demanding enough homogeneity to maintain common value streams around the world.
Moreover, while there may be differences in some process steps, teams should work to develop and implement global standards for visual management, lead times, and quality so any employee or manager can move from site to site and easily understand the status of ECN flow simply by looking at the common visual tools in place.
What to expect from the process
One of the underlying benefits of this five-step process for designing an ECN value stream is reduced rework. Rework can mean redoing tasks multiple times on one ECN. But it also encompasses any time a clarification is needed via phone, email or text in order to complete or move work along to the next activity in the flow.
Rework is a common theme with most office projects, regardless of department. And if rework occurs at a majority of steps in the value stream, it will be a drag on productivity, drive up costs, and increase the lead time of the value stream.
Often, rework results from unclear or unclean inputs from the customer or other requester. Since lead times are usually already too long, companies try to move the ECN forward as quickly as possible to give themselves the best chance of meeting a deadline. That means a customer may often send in a change after the ECN has already progressed, requiring even more rework to be undertaken. Reducing lead times can help significantly reduce rework. For example, shortening an ECN’s lead time from three months to six weeks would give the customer more time up front to clarify its specific needs. As a result, the team would not have to start ECNs that are not well-defined.
Another driver of rework are unclean handoffs between the customer and supplier, or between internal people and departments, which is common in many office value streams. Creating standard work for handoffs, meaning work should not move forward in the value stream if it doesn’t meet all the standard requirements of the next process, will result in cleaner handoffs. Less lead time pressure combined with regular intervals for flow will offer employees more time to get the work complete and accurate before moving it on.
Another common issue with ECNs mitigated by the approach outlined here is difficulty in dealing with customers, suppliers, or other external stakeholders. Whether customers take a long time to review and comment on changes or change specifications, or quote times from suppliers are too long or their response times are unpredictable, every time outside input is needed, lead times are impacted. However, it’s possible to influence customer and supplier lead times both directly and indirectly.
Directly influencing stakeholders can be done through extended value stream mapping and design activities in which companies work together with the customer or supplier to develop a future state flow that meets both organisations’ needs. Using the nine lean guidelines for office flow is a helpful tool by providing a teachable method for transformation and flow design and a common language to describe changes.
It’s also possible to indirectly influence the behaviour of customers and suppliers by communicating with them on a regular and predictable cadence using the fourth lean guideline, workflow cycles. For example, if a customer always receives information on Tuesday and Thursday mornings at 10 a.m., it will learn it needs to do that work on those days and will adjust to that cadence.
Like so many challenges in engineering offices, accounting for variability in mix and volume are keys to success. By following the approach of developing process families, preparing current state value stream maps, applying the nine lean guidelines for office flow, future state mapping, then implementation planning, organisations can successfully create flow through complex office value streams.