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Aligning various improvement initiativesEvery organisation embarks upon a journey of operational excellence. One listens to myriad evangelical presentations by consultants and practitioners, tries each method and finally ends up creating numerous flavours of the month. Here’s a take on demystifying the basics by putting into perspective the various popular methodologies available for some to adopt. ■ M Hariharan

Mar/Apr 2011 | EM

A ccording to Abraham Harold Maslow, if the only tool you have is a hammer, you tend to see

every problem as a nail. The basic theme of the article is founded on similar lines and on the two observations made by James Womack and Prof Shoji Shiba’s concept.

Observation 1

James Womack, the guru of lean thinking, has defined a perfect process as one that is valuable, capable, available, adequate, flexible, flowed, pulled and levelled. This definition talks about eight requirements for a perfect process. ■ Valuable – value creating process,

eliminating the ‘Mudas’. There are seven mudas identified by Taichi

Ohno - the father of Toyota production system. The eighth muda ‘non-utilised creativity of people’ was identified by Shigo Shingo, creator of Poka Yoke and SMED; the ninth one was identified by James Womack, ‘design of a product not meeting customer requirement’. (I’ve added a tenth one – policy). By laying valuable as the first requirement, Womack has kept the customer value creation at the centre thus enabling a perfect process

■ Capable – a process that is stable, eliminating mura (inconsistency; variability)

■ Available – the process should be available whenever needed. Eliminating the six big losses of breakdowns, setup and adjustment

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Gregg GordonSenior DirectorIndustry Marketing, ManufacturingKronos Incorporated

Gregg.Gordon@Kronos.com

M Hariharan Director Savoir Faire Management Services hari@sfccostmanagement.com

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Aligning various improvement initiatives loss, idling and minor stoppages, reduced speed, defects and rework and, start-up yield loss, enables attaining a superior OEE

■ Adequate – the process should be adequate enough to meet customer requirements. The never ending debate of building capacity more than what the market can take is the central theme of adequacy

■ Flexible – the process should sense and respond to the customer requirement, rather than meeting the market requirement with build-up of stock

■ Flowed – the ultimate ideal transfer batch size of ‘one’ is what flow means. This is enabled by the previous five requirements of the perfect process

■ Pulled – produce only when the customer wants

■ Levelled – Produce whatever is needed whenever it is needed.

Observation 2

The second observation is also by James Womack: Lean = purpose + process + people; Purpose = solving customer problems while the provider prospers. Process = 3 primary value streams and many support processes, some involving customers. People = engaging everyone touching every value stream to operate and improve it steadily (Kaizen) and dramatically (Kaikaku). This is a simple universal business truth. One has to align people, process and purpose (customer value) so that they can prosper.

Observation 3

The third observation is from the concept of breakthrough management of Prof Shoji Shiba. Any improvement has to go through three stages of ‘maintaining what one does’, ‘Incrementally improve what one does’ and ‘creating breakthrough ideas’. This is a virtuous cycle of continuous improvement. Prof Shilba calls them as three eyes of Budhha. The common theme adapted for this article is to align the people to the process to enable a perfect development; align the process to prosper and that one should enable this journey through the three stages of stability, incremental improvement and breakthrough.

Key methodologies

There are some popular methodologies which can be correlated to the common theme. 5S, Six Sigma, Kaizen, Total Productive Maintenance (TPM), Theory of Constraints (TOC), Hoshin Kanri and Balanced Score Card are the major methodologies that have been discussed here.■ 5S: 5S is a workplace organisation

methodology that attempts to bring on ‘stability’. The five steps of Seiri (Sort), Seiton (Store), Seiso (Scrub), Seiketsu (Standardise) and Shitsuke (Systematise) should ensure that the future improvements are visible. If one expects 5S to improve the operations and result in savings to the bottom line, he/she is using the wrong tool for the wrong purpose. 5S is a hygiene process that is a prerequisite for any improvement initiative. Organisations are good at the first and second S and fail miserably in the next three. 5S helps in achieving the first stage of ‘maintain what you do’ of Prof Shoji Shiba. It is a critical first step of the process alignment requirement - lean. It also helps in enabling the ‘capability’ requirement of a perfect process.

■ Six Sigma: A Six Sigma process is one in which 99.99966 per cent of the output of the process (products / bills processed / cycle time / set up time) are statistically expected to be free of defects (3.4 parts per million defects). Though it is associated with manufacturing due to its origin, this is applicable for stability of any process. The process stability is described by a sigma rating indicating the percentage of defect-free output it gives. Six Sigma, addresses primarily one of the eight conditions for a perfect process described by Womack. It is not a cure all of all ailments. It can work in tandem with other methodologies and ensure that Mura (inconsistency) is addressed more effectively. Six Sigma helps in the first stage of stability and the second stage of improvement of Prof Shoji Shiba. Six Sigma projects should address those critical processes that play a huge impact on the customer value (purpose). Thus it can enable the process alignment requirement of lean.

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Kaizen

Kaizen focuses on small incremental improvements. The theme is to minimise the strain (Muri) by bringing a human face to the work place. It is a continuous daily process and a way of life to continuously learn to spot and eliminate waste from the system. Kaizen is the base theme for lean thinking. To create an environment of Kaizen to happen, 5S is a critical prerequisite. The improvement initiatives may involve eliminating variability (Six Sigma), improving the uptime of the equipment (TPM – Kobetsu Kaizen), improving the setup time, etc. Prerequisite for a successful Kaizen is workforce involvement – starting from the CEO to the page boy. Kaizen blitz or specific Kaizen initiatives can emerge out of the lean thinking perspective. Current state value stream map, a key tool of lean thinking, can be used to identify the specific areas of improvement. Kaizen precisely fulfils the second stage of ‘incremental improvement’ of Prof Shoji Shiba. It can provide the thread for fulfilling the eight requirements of the perfect process.

TPM

TPM fulfils the ‘availability’ requirement of a perfect process by addressing the six big losses. It applies eight pillars to achieve this, viz autonomous maintenance (Jishu Hozen), focused improvement (Kobetsu Kaizen), planned maintenance, training and education, early phase management, quality maintenance (Hinshitsu Hozen), office TPM, and safety, health, and environment. 5S provides the plinth for an effective TPM to take off. TPM helps in achieving the first stage of ‘maintain what you do’ of Prof Shoji Shiba. The areas of incremental improvement for critical equipment fulfil the second stage of breakthrough management. TPM enables the process alignment requirement of going lean by providing reliable equipment.

TOC

TOC is a principle articulated by Dr Eliyahu Goldratt. Any system is a combination of subsystems intended to achieve a desired goal. Each subsystem tries to improve its performance by addressing its specific departmental goals. In the process, the

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overall goal of the system is misplaced or lost out. The local optimisation leads to overall sub-optimisation. So any improvement is possible only if we address three fundamental questions:■ what to change? (identify the system’s

constraint (step 1))■ what to change to? (what is the desired

state?)■ how to cause a change? (Step 2: exploit

the system’s constraint, Step 3: sub-ordinate every other subsystem to the system’s constraint and Step 4: elevate the systems constraint). This has to be a continuous virtuous cycle where one has to go back to the first question. (Step 5: do not allow inertia to become the systems constraint. Go back to step 1)Applying TOC is the correct first

step for any improvement initiative. But it has to work with other principles and methodologies as well. Implementing a TOC perspective requires careful deployment and alignment of performance.

Hoshin Kanri and balanced score card

Hoshin Kanri is a method devised to capture and cement strategic goals as well as flashes of insight about the future and develop the means to bring these into reality. Also called policy deployment or Hoshin planning, is a strategic planning/management methodology, based on a concept popularised in Japan by Prof Kaoru Ishikawa in the late 1950s when he said that ‘each person is the expert in his or her own job and Japanese Total quality control (TQC) is designed to use the collective thinking power of all employees to make their organisation the best in its field. Hoshin Kanri, has a detailed methodology of breaking the goals into specific objectives, specific objectives into specific actions, leading the specific actions to individuals and departments. Thus, the policy deployment methodology of Hoshin Kanri (Using X matrix as an enabler) is extremely effective. However, it leaves the critical first step of strategy formulation to the expertise and creativity of the top management. If there is a gap here, then the very deployment will be base less. (What is there to deploy?).

Balanced score card (BSC) is a

methodology developed by Kaplan and Norton in early 90s. Through a series of seminal articles in Harvard Business Review and series of books they have articulated the process of balanced score card. BSC scores over Hoshin Kanri in the detailed process of strategy mapping. Using a strategy map, the four pillars of any business, financial, customer, internal processes and, learning and growth are aligned. The implementable strategy emerges out of a well drawn strategy map.

Merging the two principles can create a strategy focused organisation and ensures that the policy deployment is well laid out. Thus, the overall focus of aligning the people to process to purpose, so that the provider prospers can really happen.

Conclusion

Unfortunately the proponents of various methodologies and theories get too romantic about their own theory and end up bashing every other thought. The dangerous consequence is that they thrust their theories down the throat of the unsuspecting users. People resist change; they resist this more so because the change agent comes up with an idealistic solution without understanding the root cause of resistance. Each organisation’s capability is different. If an organsiation has no culture of data crunching, Six Sigma is a non-starter. The neck of the bottle is normally at the top. If an organisation head is rooted in fire fighting mode Kaizen is a non-starter. All the methodologies are conceptually very sound. Adapting them to the ground realities is extremely critical for any improvement. I am not suggesting that organisations don’t change. But the time taken for them varies. Ultimately one needs to align his processes to the purpose (customer value). The people have to be aligned to the process and purpose; the people have to align the process to purpose in order to prosper. Any improvement has to go through three stages of stability, incremental improvement and breakthrough. One needs to have the patience to go through the grind and the impatience to implement once the plan is in place. Hammer is not the only tool! ■

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