Causation vs. Correlation in the Lean Business World
For anyone who’s had to sit through a year of high school statistics, and even for many of those who haven’t, you’re familiar with the phrase “correlation does not equal causation.” While many of us nodded our heads in agreement after some simple illustration, the impact of not intimately understanding this concept in the business world can be catastrophic.
I bring this up now because the topic recently arose on a favorite LinkedIn group. Several commenters offered up some examples and/or simply voiced their agreement, and I found this troubling. Troubling not because it was incorrect, but because you can see misunderstanding of the concept clearly negatively influencing businesses on a daily basis, despite the fact that everyone already apparently ‘knows it’ and agrees with it.
Before we get further into it, we should do a quick refresher of what the words and phrase mean. I went into this article with the assumption that everyone’s likely familiar with the concept already, but you know what they say happens when you assume…
Causation Does Not Equal Correlation
Let’s do a quick breakdown:
Causation: One factor or event leading to another; this could illustrate dependence – as in factor A is necessary for factor B to happen – or simply be one of the ways in which something happen (even without factor A, factors C, D, E, or F could all lead to factor B independently). The main takeaway is that one thing is happening because of another.
Correlation: Correlation is a simpler concept, and can be summed up as “a pattern between” two things. If two things are correlated, there are trends within each happening at the same time. Correlation can be positive (two things increasing or decreasing at the same time) or it can be negative, also called inverse (in which one item increases while the other decreases, and vice versa).
The meaning of the main phrase in question today is simply that while things might be correlated, or appear to move in similar or inverse ways with relation to one another, this does not mean a change in either is responsible for or a result of changes in the other.
It’s quite easy to illustrate this, and a few great examples are shown in the article linked in the original LinkedIn post. One, which graphs the US murder rate over the past few years vs. the market share of Internet Explorer as an internet browser, makes a particularly good case for a correlation between two things doesn’t necessarily point to a causal relationship.
Indeed, the chart shows clearly that murder rates have gone down while Internet Explorer usage has as well. Obviously, IE probably isn’t making people so upset as to drive them to murder (it’s not that bad), but the correlation exists nonetheless. Other funny examples in the article include number of pirates vs. global temperature and sheet entanglement deaths per year vs. cheese consumption (both of which show positive correlation).
The implications of this become more sinister when correlations that aren’t so obviously ridiculous are shown side by side. News stations, bias reports, and more could – and do – easily make it appear that one thing is causing another, even when that hasn’t been proven to be the case.
In The Workplace
“That’s all well and good,” you’re thinking, “but what the heck does it have to do with ME?!” Well, the simple fact is that Lean/Six Sigma thinking focuses on improvement, and one of the only ways we can improve a situation is by knowing what’s causing it in the first place. While working to identify root causes, it’s easy to ‘bridge’ gaps in our evidence with assumptions, and this is where we can run into trouble; after all, addressing one issue won’t help unless it really is (one of) the ones affecting the other.
Let’s say you’ve mapped out operations and notice a particularly slow station. After some investigation, you see that it turns out that all of the days with the biggest delays are when an employee named John is working. Sure enough, every day John is on that station, productivity slumps.
In response, you don’t tell John what’s going on but do enroll him in some extra training on his work. A couple weeks later, nothing’s improved. Now you bring John into your office to have a talk. As you’re about to get to an ultimatum, John speaks up and offers what is probably the real cause of your troubles: A supervisor on the floor shares a hobby with John, they both enjoy boating, and every time John’s on the workfloor the floor manager comes over and has a chat with him about boating, asking questions about building his new boat, etc. Inevitably, productivity slumps as John has a period where he can’t focus on his work.
Whether John was just a lazy worker or he had a distracting supervisor slowing him down, your original data would have shown up the same. In the end, however, it becomes apparent that despite the correlation, John is not actually the cause of slowdowns on the days he works, and your correctional efforts need to be focused elsewhere (on that chatty floor manager, to be precise!).
This is just one very specific and clear-cut example of how this concept can lead to problems in workplace ‘improvement’. In real life scenarios, the relationships can be much more complex, and getting to the bottom of the “root cause” of a problem, a common strategy in Lean, can be more difficult that in this example.
Don’t Mistake Correlation for Causation
That said, there are a few important things you can do to help reduce false positives and ensure that you don’t mistake correlation for causation.
Don’t Assume: When it comes to digging down and figuring out how to improve your business, preconceived notions kill progress. Remain open and try not to weigh in or even think about solutions until you have your data.
Be Critical: Even once the findings are in, ask yourself what more you can do; are there other areas to investigate? Are you sure you’ve identified the right cause? Is there actually more than one?
Talk To People: From afar, it can be hard to move from an overall view to a specific, insightful one. Always work with your employees to get the information you need. Remember, a simple conversation with John would have set our imaginary business owner on the right path sooner. In the end, it’s all about saving you time and money, so use the tools available to you to track down the right leads as early as possible.
Cut Down Wastes with Takt Time Production
There are many types of waste within a facility, and many different things that can contribute to that waste. For most facilities, one of the biggest causes of waste is improper planning on the production line. In some cases, the line will produce products too slowly, which is inefficient, and can upset customers. In other cases, products are produced too quickly, which is a waste of resources. In addition, too much of a specific item may be produced, which is yet another form of waste.
One great way to dramatically cut down on waste associated with the production line is to implement the lean manufacturing takt time production standards.
What is Takt Time Production?
To put it simply, takt time production is a concept that helps the production line to produce products at the rate that the customers need them. It can be written out like this:
The more accurately you can predict the production time, and the more consistent customer demand is, the better you can use this type of production planning to reduce waste. Of course, even in situations where you don’t have the most accurate numbers, this system can still be quite useful.
Benefits of Takt Time Production
The main benefit of takt time production is going to be that your production line is operating more efficiently. There will be less waste, and it will be easier to predict the amounts of products you are producing each shift. The following are some of the key benefits that your facility will likely enjoy, and how this type of production planning will produce them.
- Reduces Over Production – One common issue with selling products to customers is that you typically have to have a set amount produced and ready to ship in order to quickly satisfy demand. With this type of production planning, you can produce more as needed, which reduces the amount of inventory you need to store.
- Manages Overtime – Since you will be producing products on a more consistent basis, you won’t be going through the cycle of needing people to work overtime one week, and then not having enough work the next. This can often reduce the overall expenses related to the labor.
- Easier Planning – It is much easier to plan out your shift requirements and production needs when you have a more stable production schedule.
- Fewer Errors – When you are rushing to get production done quickly, it may lead to product errors. When you are on a more consistent schedule, the error rate often goes down significantly.
- Improved Price Management – One of the big problems that come up when you over produce products so they are ready is that you occasionally have to drop your price to reduce inventory (during product changes or updates, for example). With takt time production, this is not as much of a concern so you don’t need to adjust the prices.
Your facility will, of course, have additional benefits that are specific to your situation. Keeping track of production rates and other stats is a great way to monitor exactly how your facility is benefiting from this type of production planning.
How to Implement Takt Time Production
You can’t simply implement takt time production without some planning and information gathering ahead of time. If you try to rush through this initial stage, you’ll end up running into a lot of problems, and often actually increasing the amount of waste in your facility during the transition.
Instead, take your time to really plan it out and get everything properly into place before making any changes. The first thing you should do is gather together the following pieces of data so you can use them to customize the rest of the implementation process:
- Average Customer Orders – Knowing how many of each product you produce your customers tend to order is very important. This should be broken down based on historical data. Looking, for example, at monthly or even weekly trends is very important.
- Due Dates – In addition to knowing how much of each product your customers will order, you also want to know the approximate due dates you can expect. Some customers, for example, may order well in advance of their need so you will have more flexibility. Others may wait until the last minute.
- Ideal Production Rate – Understanding how many products per hour/shift you can produce without sacrificing quality is essential. This will help you with scheduling and meeting goals.
- Sick/Vacation Trends – In most areas the amount of sick days and vacation days taken go up and down based on seasonal trends. Know these trends so you can better plan out your staffing.
There will also be other pieces of data that are specific to your facility, which you can use to help improve the planning and implementation of takt time production.
Another essential part of this type of production planning is ensuring everyone is following the same production methods. Coming up with a set of standards that everyone can follow will help ensure you can accurately predict the number of products that you can produce per shift.
Take some time to review how each job in the facility is done, and then create some best practices that everyone should follow. This can take quite some time to complete, but it will be well worth the effort in the end.
Once you have all the data in place, and the best practices planned out, you will need to provide proper training to your employees. Getting all the employees to understand what takt time production is, and what their role will be is very important.
Make sure you point out the benefits that they will enjoy from this new process. Things like more predictable schedules and more consistent work are typically very appealing to the employees.
In addition, train them on the new processes that you expect them to follow. During this time you can also introduce the process by which employees can make recommendations on how to improve existing best practices. This will help get a system in place for constant improvement within the facility. Having this system will also keep people from just doing things their own way because they think it is better.
Activation and Evaluation
Once everyone has been trained, you will want to start operating based on the takt time production standards. While at this point you will have successfully implemented the takt time production system in your facility. This does not, however, mean that the job is done.
At this point you will want to begin gathering as much data as possible, and observe how the work is being done. In most cases you will notice that there are some small things that can be tweaked or improved. Taking the time to really analyze the data you are able to collect and make adjustments as needed will help improve the long term success of this type of production.
Even if things seem to be going smoothly, you can almost always find ways to improve the production in your facility and reduce waste even further.
LinkedIn Group Discusses Change Management
The idea of effecting change within a business is exciting and positive, but it can, at the same time, cause some stomach turns for Lean professionals. Even with experience, and sometimes because of it, the task of changing minds, processes, and habits can be daunting.
Users on LinkedIn Six Sigma, Change Management, and Lean Methodology groups often bring up the topic of which tools and habits make for the most effective and easy-to-implement improvement projects; it’s no secret that overeager or under-qualified evaluations, resistant workers and management, or unpreparedness can turn a well-meaning improvement effort into a nightmare.
As such, Ricardo Anselmo de Castro asked users what their “number ONE” rule was for “making things happen” with their Lean efforts. As usual with these things, there was some consensus, and some divergent thinking, but the ultimate conclusion I could draw from this one is that the idea of “ONE” cure-all just isn’t a realistic pursuit. Instead, I’ve gone ahead some of the best points from the discussion into a quick, simple, 3 Step Guide; here’s to hoping it helps you get things done!
Step 1. Lay A Foundation
One of the first steps to bringing any project to completion in the business world is making sure that you’re working on the correct project in the first place. Throughout the conversation, a common belief was the notion that you had to have hard facts and data to back up your projects before you started formulating a specific strategy, let alone trying to convey that strategy to others and sell them on your ideas.
User Parashuraman Ramaswamy suggests “desk audits” to identify problem areas in your business, and as a good starting point for backing up project plans. The term “desk audit” refers to close scrutiny of various workstations or individual units within a business. These audits look for problems or slowdowns, much in the same way Lean practitioners use a “Gemba Walk” (the two are really the same thing, in most senses).
Using a such a strategy with an open mind and no agenda can help you objectively spot things you might have otherwise missed. Showing that you’ve audited many aspects of a business before deciding on one process to tackle can help assure others that you’ve done your homework and are going to be dedicating resources where they’re most needed.
User Prashanth Baragi’s number one tool is Value Stream Mapping, or VSM. VSM is another tool for holistically evaluating an operation, thought it works in the reverse of auditing; instead of focusing on small individual units first and comparing them later, you map an entire overview of production, and then assign values to the efficiency of various processes and decide which area you’ll focus in on.
Both approaches are valid, and the main point, again, isn’t that one tool is the end all be all, but that you’re using something effective to help back up your projects.
Ultimately, all auditing, visual mapping, and whatever else you use are meant to get you to the goal of step one: Documenting your process and making an informed, research-based decision.
Step 2. Cultivating Buy In
Everything you did in step one to lay a foundation for your change management is to aid you in the biggest hump in the system: Getting buy-in. ‘Buy-in’ is the mental currency of all audiences affected by your projects, those whose support you’ll need to move forward. While I’ve done an entire article on cultivating buy-in for continual improvement/Lean projects before, the two main parties you need to be concerned with – and thus the ones we’ll skim over here – are your directly affected workers, and management.
Management: Love it or hate it, wooing those in power is pretty much a necessity; if you aren’t completely autonomous in your decision making, then the biggest barrier you’re likely to encounter is simply that someone in charge doesn’t see the value in what you want to do. At worst, they may simply see the re-organization, new systems, etc. that often come with continual improvement/LSS as wastes of time that divert their workers and resources.
Luckily, you’ve got a secret weapon, and it’s all that helpful research you collected in step one. When you don’t fully understand a topic, you might be impressed by someone else’s knowledge of it, but that doesn’t mean you agree with everything they’re saying, because you don’t have the authority on the subject to.
Don’t give management this same excuse; you don’t only need to use your research to prove that you’ve done your homework and know exactly what the company needs to improve (and how to do it). Instead, what you need to focus on is how to present that information so well that management feels educated enough to agree with and understand your ideas and goals.
This not only helps with initial approval, but also project longevity. Your boss is going to feel much more comfortable having an understanding of what’s happening as time goes on.
Employees: Depending on the setup of your company, those on the ground might not have as much of a say in whether your project gets off the ground or not, but they certainly have an influence on how far it gets. Buy-in with workers is absolutely essential as you’ll be asking them to learn to do things in a new way, etc. for weeks, months, or even permanently depending on your aims.
A great quote to come out of the discussion was offered up by Kevin Erickson and reinforces the need to be receptive to the needs and concerns of your audience while carrying out step two (and even step one, for that matter):
“This is why the number ONE rule for me is to LISTEN. I mean really listen, in order to understand what the process, current and potential, means to its stakeholders. What do they like and dislike about current? What do they like and dislike about any proposed change?
Nothing else matters unless we get this right and getting this right will support the change that matters.”
Step 3. The Follow-through
The last step is to follow through on what you’ve set in place. It’s easier said that done, and it’s not even said that easily because how you keep your program on track is largely a function of individual circumstances. Even so, keeping your original goals in mind (not getting sidetracked), keeping your two primary audiences informed every step of the way, and having an effective method for measuring the impact you want to have will all help you succeed.
Implementing a 5S program in a facility takes a lot of hard work and dedication. In most cases, however, companies are willing to put in that effort in order to get the great results they desire. A facility will have buy in from upper management who are willing to provide the financial backing and other support necessary to really get the 5S program off the ground. Once 5S has been implemented, however, the passions often begin to cool and it can become difficult to sustain the benefits that were realized, and push forward for ongoing improvements.
Since one of the S’s in 5S is sustainability, it is important to look at how to sustain the program as a whole. The following 5 ingredients can help ensure your 5S program not only enjoys a successful launch, but also has ongoing success for years to come.
It can be tempting to keep pushing for large and complex changes that might have dramatic results for the facility, but that isn’t always a good idea. These types of major changes do have a place from time to time, but for true sustainability, you’ll want to make sure you’re focusing on steady momentum, which is done by focusing on simple projects.
The vast majority of improvements a facility can enjoy will be simple to find and implement, so don’t make the mistake of overcomplicating things. If, for example, someone presents an idea on how to eliminate a small amount of waste from their one department, implement it as quickly as possible so everyone can see that simple solutions are appreciated and implemented.
One of the best things you can do to ensure a 5S program remains in place is to get it put on people’s performance evaluations. Even when people think there is value to something at work, they will often neglect it if it is not something that they are measured on for their annual review.
Implementing this type of measurement should be done right from the start, so that the upper management is taking action while they are in the early phases and are focused on the new 5S system. Putting it off until after the launch will give them time to lose interest, which could cause problems down the road.
When it comes to eliminating waste in a facility, it doesn’t matter how big or small the elimination is, it should be seen as a major victory. Sometimes it is the smallest changes that can have the largest long term results, so make sure you’re celebrating success at every level. Recognizing the people who contributed to a particular change or improvement, for example, will not only make those individuals feel appreciated, but will also motivate others to take action for improvement as well.
While most facilities do a good job of explaining the benefits of 5S and how it works at the beginning, they often end all training after the initial implementation. This can cause a number of difficult problems. To start with, any new employees will be coming in to the situation without knowing what 5S is, or how it is being used in the facility. In addition, even those who were properly trained at first will fall back into bad habits over time if they aren’t constantly reminded of why 5S is important to the facility.
Finally, you need to review your progress regularly to ensure you’re not losing momentum. Finding out where improvements were made, and how they were accomplished on a weekly or monthly basis, for example, will help keep the progress going. This type of information should be shared with everyone in the facility, especially management, to help keep them informed of the importance of the 5S program.
Kaizen is a Japanese term that relates to making continuous improvement in organizations through improving the process. Kaizen events have been met with opposition by many organizations because for it to work successfully, employees must step away from their jobs between three and five days to participate in the events. Rather than take a preventative approach, employers are more likely to use kaizen events to address problems retroactively. This approach is ineffective. To have the most impact in your organization, there should be some proactive assessments of the organization to achieve LEAN success.
What to Expect From a Kaizen Event
The three to five day events will consist of activities, which may include: brainstorming, training, documenting the current state of the organization, and defining problems and goals. Once these activities are complete, a kaizen event may address the implementation process, how to address a follow-up plan, and how to present results. The events will also teach organizations to celebrate successes and keep their employees motivated through rewards.
How Kaizen Events Have Been Used to Achieve LEAN Success
Total Productive Maintenance (TPM) has been used in the past to improve equipment reliability. Product development process and product design manufacturability has been improved using kaizen events also. Some companies have used kaizen events to organize the workplace using 5S concepts or change a process using equipment. 5S can promote efficiency and productivity by sorting, straightening, shining, standardising, and sustaining processes to achieve the goal.
When kaizen events cannot solve a problem in an organization, Six Sigma analysis is often employed to reduce waste and yield improvement. In general, if a team needs to meet regularly over a period of time to solve a problem, Six Sigma is recommended. Otherwise, it will require only a kaizen team meeting.
During a kaizen event, employees are encouraged to come up with ideas that will achieve results and improve efficiency and productivity. In order for a kaizen event to be successful, several activities must occur or milestones must be achieved:1. Discover and Address Problems at the Source
During a kaizen event, team members must discover problems and create solutions to address them at the source. This will prevent the “band-aid effect” where problems keep reoccurring because the root of the problem was not eliminated. Kaizen events teach employees to avoid this problem, which leads to LEAN success.
2. Concentrate on Small Improvements for Immediate Results
Team members must concentrate on small improvements to get immediate results. This may involve the use of creative investments. Small improvements are less daunting and more achievable. Focus on creating small improvements for big overall results. This is important for LEAN success.
3. Make Better Use of Capacity and Capital
For LEAN success, team members must make better use of production capacity and capital. When production capacity is increased, more product can be produced as long as the process is efficient. They must also increase employee retention with a kaizen event. When new employees do not have to be constantly retrained, the processes remain more efficient and fewer defects are produced. LEAN success can be achieved when team members master this concept during a kaizen event.
4. Decrease Waste in the Production Process
Team members must work to decrease waste in all aspects of the production process. When waste is reduced, less money is spent trying to dispose of the waste and also on materials that created the waste. Plans can be devised at the Kaizen event to decrease or eliminate waste in the production process. This will lead to LEAN success.
5. Eliminate or Transform Existing Procedures
Team members must work to eliminate extraneous procedures or transform existing procedures. This will give the organization more productivity and efficiency and get team members one step closer to LEAN Success.
Keep in mind that the Kaizen approach involves applying best practices and using your employees strengths to grow your business. You can develop your competitive advantage by identifying how people can contribute to the business. Start by measuring all of the possible metrics and standardizing your work culture. This will help you address the problem and achieve success sooner.
How to Guarantee Success at Your Kaizen Event
1. Create a Cross-Functional Team and Involve Employees
Create a cross-functional team of employees that works in the process area where the kaizen event will be held. Members from other areas with a fresh perspective can also be invited. Operators should also be invited to facilitate communication throughout the organization. This will prevent confusion.
Many facilitators recommend placing a flip chart in the area where employees work. When ideas are posted before the event begins, discussions will be more fruitful. For the most success, employees must remain informed throughout the entire event and the operators should be evaluated after the event.
2. Plan Your Event in Advance
Most people fail to plan the event in advance, and the events become ineffective because there is no clear direction. LEAN success cannot be achieved in this instance. Thus, to ensure success objectives, deliverables, and metrics must be defined. Bring all the necessary supplies to the event such as post-it notes, paint, and tape. Be sure to reserve a space large enough for your event.
3. Spend More Time on the Floor than in the Classroom
Eighty percent of your time should be spend on the floor planning and designing. The remaining 20 percent of the time should be spent in the classroom. This will ensure the event is fruitful, which will lead to LEAN success. Keep in mind that a Vision event will require more classroom time.
4. Implement the Plan, Do, Check, Act/Adjust (PDCA)
Apply PDCA to your kaizen event for LEAN success. Plan what you are going to accomplish on each day. Then, review what you did each day. Next, determine the results, and determine what you plan to do the next day. Adjust the plan for additional success. Always follow up to determine the success of the event.
5. Stay Focused on the Event
Stay focused on the event and don’t let big issues deter you from completing the tasks in your organization. Any homework from the event should be minimal.
Kaizen events help organizations think long-term rather than short term. Organizations must learn how to view beyond just an operational point of view. Instead, they must realize that Kaizen is about cultural change. The concept created by the kaizen master, Masaaki Imai, in the 1980s is highly effective if applied properly. Organizations must use the concepts and learn how to avoid failure in applications that have not been successful in the past. LEAN success can be achieved when kaizen events are held and the plans are implemented. Try a kaizen event in your organization.
With the new year just beginning, it can be a great time to look at what types of things you can do to help make 2014 the best year ever. Companies that have properly implemented lean strategies over the past year will have undoubtedly found many benefits, and improved the way their business is done. If there is one area where virtually every company can improve their lean implementation, however, it is with data collection.
Data collection is one of the most critical aspects of lean strategies. It is what helps to drive changes and improvements, because it is based on facts and not just the feelings or opinions of people in the facility. In addition, when you have the data necessary to back up a decision or request, it is much easier to get through the traditional red tape. With this in mind, look at some ways that your facility can improve the data collection and analysis processes this year.
Where is Data Collected?
This is one of the first questions that should be asked when looking to improve data collection for any facility. There should be many different points where information is collected, and identifying these areas is very important. When looking at data collection points, try to think about what makes the data from that source important, and how can it be improved. In addition, attempt to find other sources for data that will help paint a more complete picture of the situation in the facility.
By expanding and optimizing the data collection points, it is possible for a facility to analyze this information more holistically. By taking into account how all the different areas of a facility work together, it is possible to find great new ways to optimize the workflow.
What is the Data Telling You?
Once data is collected, many people are tempted to pick and choose what information they use, so that they can accomplish their own personal or department goals. This is a poor use of data, because it doesn’t rely just on the facts. Always try to understand what the data is indicating would be the best course of action, rather than trying to manipulate the data to match up with your desires.
This is often more difficult than most people think. It is far too easy for individuals or groups to read their own thoughts, opinions or desires into the data. With this in mind, consider bringing in an outside consultant or an impartial third party to help analyze the data with you. This can help your facility come to an objective conclusion, which will be much more beneficial in the long run.
While data will typically help drive logical changes that should help a facility, these changes won’t always work as well as hoped. This is why it is essential to continue to collect and analyze data after all changes are made. In the days and weeks after a change, it is often possible to identify whether the adjustment that was made is getting the desired results. If it isn’t, look into why it is not working, and see what can be done to fix the problem.
Even if it is working well, however, this is still a great opportunity to identify further improvement opportunities. When changes are made to streamline or improve processes, it often reveals additional opportunities for improvements. Looking at the data after a change is made is a great way to keep the improvements coming, and may result in efficiency benefits that nobody had previously believed would be possible.
It is clear that data drive decisions are the best kind, which is why facilities should strive to make 2014 the year of improved data. When done properly, it can allow for excellent results.
When most people think of Lean ideologies and methodologies, they think of kaizen and continuous improvement first. However as one moves deeper into Lean, you begin to add new vocabulary and processes to your Lean tool bag. Today’s word of the day: kaikaku.
Most that know or have heard of kaizen think of it as a slow continuous improvement that is necessary to sustain a successful operation. Kaikaku, on the other hand, translates to “radical improvement or change.” While the two can coincide together, they do possess stark differences in their approach, vision, and subsequent results. Here is a comparison of the two:
Kaizen Continuous Improvement
- Planning and execution timeline of hours to weeks
- Smaller projects
- Smaller staff and resources required
- Faster results with small, individual contributions to the bottom line
Kaikaku Large-scale, radical change
- A lean initiative or event with a planning timeline of weeks to months, but execution can range from hours to weeks
- Generally larger projects
- More staff and resources required
- Results are seen slowly, however with larger, coinciding and various contributions to the bottom line
Both kaizen and kaikaku require a skilled, vested group of individuals that believe in the organization they are trying to improve. However, which approach your organization decides to implement will depend on their overall skill set and readiness for the change they are about to take on. The challenges both kaizen and kaikaku present are cannot be overlooked and must be addressed by management, prior to implementation.
The Challenge of Kaikaku
- Increased resources and time: The amount of resources necessary for a successful kaikaku implementation is much larger than a normal kaizen event. Senior management must be engaged in the process due to the significance of the change about to occur. This will require them to set aside other tasks and make major decisions that could ultimately decide the fate of the organization, if gone wrong.
- Takes creativity and capital: Kaikaku is supposed to lead to a revolutionary change that drastically improves the bottom line and/or value stream of the organization. This takes creative minds that can think outside the box, but also the capital to allow them to implement their creative ideas. Typically, a Lean process is supposed to do more with less, but in the case of kaikaku, it sometimes takes a little capital to provide the large scale change you’re looking for. However, the benefits are usually large with kaikaku, so the return on investment is worth it and seen faster than normal.
Swinging for the Fences
The risk/reward factor is significantly higher with kaikaku, over kaizen. If you’re a sports fan, think of baseball and the difference between a home run hitter and one that hits for a high average, with lots of base hits. The home run hitter goes up swinging for the fences every time. The reward is high because if they connect, the result is a minimum of one run for the team. The risk is that they strike out and your team now has an out for the inning. However, the one who hits for average is up there just trying to make contact and get on base. The reward is low because they may just get a single and never get further than first base, but the chances of them getting out is also low.
The baseball analogy might not click for everyone, but the point is; you can use them both to win. Baseball like all team sports, takes a team to win. Therefore, intertwining your singles and home run hitters can lead to tremendous success is done correctly. The same could be said about kaizen and kaikaku.
In order for your organization to have success with kaikaku, you have to appreciate the importance and value kaizen has. If not, your organization’s ability to sustain the “radical” change, may fall flat on its face. When dealt with a problem or situation that requires a revolutionary change (kaikaku) to happen, you may not always get the initial results you were looking for. However through continuous improvement (kaizen), you can continue to push towards the results you were initially looking for.
The Ten Commandments of Kaikaku
By: Hiroyuki Hirano
- Throw out the traditional concept of manufacturing methods
- Think about how the new method will work, not how it won’t work
- Don’t accept excuses; totally deny the status quo
- Don’t seek perfection; a 50% implementation rate is fine as long as it’s done on the spot
- Correct mistakes the moment they are found
- Don’t spend money on kaikaku
- Problems give you a chance to use your brains
- Ask “why” five times
- Tens person’s ideas are better than one person’s knowledge
- Kaikaku knows no limits
SDCA (Standardize, Do, Check, and Act) with LEAN principles. The SDCA cycle is simply a refinement of the PDCA (Plan, Do, Check, and Act) cycle. The goal of both processes is to stabilize production. Many companies use this process to improve their product or service. Here is what your company may want to know about this process.
1. LEAN Marketing with SDCA
Marketing cycles can be improved with iterative processes. Customer value is most often the focus of LEAN marketing with SDCA. When companies use LEAN combined with SDCA, they often have a greater degree of success.
2. Keep in Mind that Standardization Requires Tenacity
Improving a process, even with automation, is never easy. Once a process is standardized, it can become the foundation for a subsequent improvements or kaizen activity. No kaizen process can be established without some sort of standard work first. When companies follow this process, they can accomplish things faster, easier, better, and cheaper.
3. SDCA Ensures the Entire Organization is Following Procedure
SDCA process involves auditing to ensure that the procedures followed are standardized. The process requires every employee across the organization to adhere to the principles that will yield standardized work. If the procedure is not followed, there may be countermeasures to restore the process to normal after the reason for failure or lack of adherence is determined. Some of the most common reasons why procedures are not followed is because of willful disobedience, and insufficient training.
4. Employees Need Patience to Successfully Execute SDCA
Most experts require that employers experiment with standardized work for a period of time before best practices are implemented in writing. This will ensure that the process is repeatable by whomever reads the instructions and follows the process. When everyone can be instructed on how to consistently execute th process, then the process may be disseminated across the company. This is why it requires patience to successfully execute SDCA.
5. Andon Teaches Employees to Respect the Process
If the process is not sufficient or it’s not consistently repeatable, some employers apply andon. The andon pull will solicit leaders attention and call them to escalate the process when necessary. Problem solving begins the andon process. If you respect the process, then you’ll have better results and better lean leaders.
6. Pay Attention to Sales SDCA
When you consider sales SDCA, you’ll recognize the areas where you can improve in your processes. This is an important part of creating a valuable product that has a high degree of consistency with the public. Tactical execution or SDCA may involve the help of a creative team, but its not the wisest decision. These processes are often more inefficient.
The SDCA Cycle for LEAN
The SDCA cycle for LEAN is necessary in any organization that values perfection. Companies like General Electric, and Motorola have implemented these processes and have improved their productivity levels and reduced their error levels significantly.
Even Toyota has benefitted from this process by producing a vehicle that outlasts most vehicles on the road. The vehicles have longevity that is not present with and other type of process available. Every company should strive to improve their processes and produce products that outshine and outlast the competition. This is what the SDCA cycle for LEAN can do for your company.
Study the basic principles of SDCA and learn how the process works for your company. Keep in mind that it will require patience and perseverance to implement the process. When the objectives are completed and the process is perfected, your company will run smoother, and your productivity levels will improve. A better product should yield more sales and increase revenue, and that’s what business is all about. Isn’t it?
This fall marks the 25th anniversary of the Lean movement which continues to revolutionize the manufacturing industry and is now spreading into other industries as well. Jim Womack, former MIT researcher and well-known founder of the Lean movement was a keynote presenter at the Association for Manufacturing Excellence (AME) in Toronto last month.
Womack was introduced by CME president Jayson Meyers, who said he is “someone who has changed the world” by launching the Lean revolution. In response, Womack stated “all I have done is repackage stolen goods, I just tell stories.”
He’s done more than just tell stories though. Womack has authored three books and wrote countless essays regarding Lean. His book titles include:
- The Machine that Changed the World: The Story of Lean Production
- Lean Thinking, Lean Solutions
- Gemba Walks
The growth of Lean over the last 25 years has prompted several non-manufacturing industries to adopt Lean techniques and processes. It’s popularity and progress has actually come as a surprise to Womack.
I’m surprised we’ve made as much progress as we have, with so much misunderstanding of what we [the leading Lean gurus] have been saying.
Jim Womack’s top misconceptions of the Lean movement:
Misconception No. 1: “People heard that Lean is a cost-cutting exercise.” Womack wanted to make it clear that the methods his team studied at MIT were geared towards producing more output, with less waste. This was meant to be less time wasted, space, operating costs, capital expenditures, and worker injuries. “People think it’s a headcount reduction system, people heard the less, but they didn’t hear the more,” Womack added.
Misconception No. 2: “People thought it was a book about factories.” Womack felt his first book The Machine that Changed the World, in regards to the Toyota Production System was interpreted to be more about factories than anything else. He went on to point out that his book included chapters on managing customers, how to listen to your market, and running your entire enterprise on Lean principles. “You have to read the other four-fifths of the book,” Womack said if you want to understand that Lean is not just about production.
Misconception No. 3: “Most people think Lean is a within-the-walls activity to fix your company.” In fact, as Womack points out, Lean is at its best when your supply-chain partners team up to reduce inefficiencies and maximize flow as well. “It is impossible for you to get very far when the people in your value stream don’t get any better,” Womack said.
Misconception No. 4: “Lean is an improvement process production can do — management doesn’t have to do anything. Management can ‘check the box’ and move on.” Womack went on to add that lean required continuous co-operation at all levels, with upper management building two-way communications and trust with staff, restructuring to support decision-making at lower levels, shepherding investment in Lean projects, and generally championing Lean initiatives.
Lean isn’t going away, at least not in the foreseeable future, but it is up to those adopting Lean’s methods to truly embrace it’s methodology if they want to have success. There is no reading between the lines with Lean. The proof is in the work laid out by pioneers like Womack and organizations like Toyota who have shown that Lean does equal success.
I am a modest optimist. I think people and societies learn more slowly than they should. In the long-run battle for competitiveness, the winners will be those organizations that get better, faster than anyone else.
Information used in portions of this post were from a post on financialpost.com by Rick Spence.
We’ve all had a bad experience at a restaurant. It’s nothing we or the restaurant ever hope for, but it’s the risk we take each time we venture out for a meal. We generally choose a restaurant for one of two reasons, the food or the atmosphere and set our expectations accordingly. For my most recent dining experience I went with the latter and made my way to Buffalo Wild Wings. There were multiple sporting events on that I wanted to watch and they were all on at the same time. Seeing how I only have one television and they have more than I can count, it seemed like the right choice at the time.
A Three Hour Wait!
Apparently, so did everybody else in town. After circling the parking lot for about 15 minutes looking for a parking spot, I was greeted by a hostesses inside to tell me the good news. A three hour wait! Yes that’s correct, our estimated wait time was as long as the game itself! She did say it with a smile though.
After putting my jaw back in place from it dropping to the floor, the hostess asked for my phone number. I gave it to her without hesitation and proceeded to wonder what I was going to do. That’s until about two minutes later when I received a text message saying that I had been added to the Buffalo Wild Wings waitlist.
Suddenly, I realized that I didn’t even have to be there and I could be notified that my table was ready through a text message. In fact, inside the text message was a link to a webpage that showed my place in line and how long I had been waiting.
Lean in a Restaurant?
In working with and writing about the wide word of Lean, I was immediately drawn to this new method of handling large amounts of guests in a restaurant. I started running through the process and thinking about all the ways this simple, yet powerful new tool could be interpreted by a Lean enthusiast.
- Less Waste: No more writing down names on paper and then having to call them out when a table is available. Gone are the plastic alert buzzers that require additional equipment and power to run them. All that’s needed, is what the restaurant and customer already have, a computer and a cell phone.
- Enhanced Customer Experience: With up to the second information at the palm of your hands, you know exactly where you are in the order and how much time you have until your table is ready.
- Keeps Continuous Improvement In Focus: Being able to track your customer wait times electronically with no additional software should provide the restaurant with critical information. This should help improve wait times in an efficient and accurate manner.
- Improved Communication: It’s a two-way system which allows the customer to text the restaurant back or if you would like to call, the phone number is included in the original text.
A Better Way To Dine
Not sure if it was the right thing to do, but my guest and I decided to walk down to another restaurant showing the games and grab an appetizer while we waited for our text message. We continued to hang out at the neighboring restaurant while monitoring our status on my cell phone. As we moved towards the top, we walked back over. Sure enough, after walking back into BWW I received a text message that our table was ready. We ended up staying there for the rest of the game and most of the following, but if it wasn’t for this new service, we more than likely would have not come back at all.
The technology the restaurant used was from Firespotter Labs called NoshList Premium. After doing a little research, it turns out this service is now being used by over 1600 restaurants nationwide. Other chains include Red Robin and Gourmet Burgers.
The full list of features include:
- Unlimited Two-Way Texting
- Table Number Assignment
- Large Party Functionality
- NoshGuest Autofill
- In-App Statistics
- Designated Local Phone Number
- 30-Day Exportable Analytics
- Weekly Email Summaries