This case study presentation builds upon the work I’ve done over the past 20+

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years providing process and system improvement support, guidance, and facilitation to client companies across the globe. In this case study, I present a fairly simple application in an organization that builds custom medical device implements for surgical use. These devices often times require changes to the base design in order to perform the desired surgical application.

I was contacted to assist the company in developing improvements to the change management system in order to speed the change process and allow the company to meet the demands of the industry in a timely manner. As part of this work I realized there was confusion about how Lean methods are actually implemented and on which tools are appropriate for realizing the desired improvement goal.

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Kaizen is a Japanese term that comes from two words. This term encompasses a long-held Japanese philosophy about the world and systems that exist in the world.

To the Japanese “Kaizen” is an ongoing process of improvement which never ends. This idea of continual improvement was first introduced to the Japanese by William Edwards Deming during his visits to Japan after WWII. Dr. Deming stressed the importance of having a long-term approach to process improvement that integrated into the operation allowing an ongoing and never-ending approach to continuous improvement.

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These are the foundation principles of Kaizen originally communicated from TaiichiOhno of Toyoda and later structured with the help of Masaaki Imai who was a long-time consultant to Toyoda.

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American statistician, educator, author, and consultant who taught top

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American statistician, educator, author, and consultant who taught top management in Japan how to improve design, service, and production systems to produce the highest quality possible.

When he began work in Japan in 1950 Deming was asked by US Army to assist in census taking. While in Japan he seized upon the moment to introduce ideas about quality and continuous improvement he had learned from Dr. Walter Shewhart while working at Bell Laboratories.

Using a basic construct from Shewhart, Deming developed the improvement approach known as PDCA which was widely adopted in Japanese industry. In addition, Deming is best known for his 14 Key Principles of Management, his System of Profound Knowledge, and the Seven Deadly Sins of business.

In 1960, the Prime Minister of Japan, Nobusuke Kishi awarded Deming Japan’s Order of the Sacred Trust, Second Class on behalf of Emperor Hirohito. This medal recognizes Deming’s contributions to Japan’s industrial rebirth and its worldwide success.

Born in Tokyo in 1930, Masaaki received a Bachelors in Business

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Born in Tokyo in 1930, Masaaki received a Bachelors in Business Administration in 1955 at the University of Tokyo, where he conducted graduate work in international relations.

In 1950 Masaaki was asked to take a group of Japanese top managers on tours of American manufacturing plants to help them look for the secrets of high American productivity.

In 1961, he returned to Japan and became the first corporate headhunter and consultant to major Japanese corporations striving for a competitive advantage.

In 1962 Masaaki founded the Cambridge Corporation, and international management consulting and recruiting firm, and 20 years later Mr. Imai was receiving visitors from all over the world with the intent to understand the secrets of their trade partners in Japan via what were called Kaizen tours.

He is known as a consultant in the field of quality management and an improvement and “Lean Guru” in most circles. Today he heads the Kaizen Institute Consulting Group which he founded in 1985.

Masaaki works as an Ambassador of his organization by spreading his message of Lean Kaizen throughout the world. The institute focuses on a top-down and bottom-up approach that engages the entire enterprise to create a Lean culture that adds business and customer value while achieving sustainable results in every area.

Born in Dalian, China in 1912 and graduated from Nagoya Technical High

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Born in Dalian, China in 1912 and graduated from Nagoya Technical High School in 1932. He began working at Toyoda Spinning business the same year of graduation.

He moved to Toyota Motor Corporation in 1943 and gradually rose through the ranks to become its executive. Ohno developed the fundamental principles of Toyota’s production system, and created the formalism of the seven wastes (or muda) as part of this system.

He wrote several books about Toyota’s Production System in 1988 and later in 2007. Taiichi Ohno is widely know as the father of the Toyota Production system.

Just a sample of some of the references I used to put this case study together and rely on routinely for guidance in the work I do with clients.

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When we speak of “improvement” we are usually not too descriptive. But, there are

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actually three distinct areas of improvement to consider as shown in this slide.

Customers do not often know what kind of improvement they desire, but their needs give us clues as to which area is most important to them.

Business operations are not always clear about their needs for improvement, but their problems give us clues about which of the above areas to focus on.

When looking at the previous areas of potential improvement where does Kaizen fit in? Can Kaizen be used for all areas or is it best used in one particular area?in? Can Kaizen be used for all areas or is it best used in one particular area?

Usually, an organization does not take the time to look at these leading questions when embarking on an improvement effort. Instead, they assert a logical premise that Kaizen is an improvement method and so they simply implement it without question. Remember, Kaizen improvement has its birth in a production environment to address problems with the movement of product along a production line.

Kaizen works exceedingly well in processes where information or material is moving from one point to another. These processes transfer the material along a predetermined path using information to add value at each step of the process. Processes that operate in this manner are called “Transfer Processes,” as they transfer material and information in an orderly manner to build a final product.

The drivers or causes of poor performance in Transfer Processes have been known for many years. Prior to the development of the Toyota Production System, an area of study known as Operations Research was used to aid in understanding and improvement of Transfer Processes.

In the early years of Toyota’s history Kaizen was developed to allow line workers to take part in the process of improvement in the workplace (Gemba) rather than in board rooms. Therefore, Kaizen was a tailored improvement approach for production lines where the causes are well understood. When the causes are not well understood, then other methods of improvement may be needed to first elicit the underlying causes. These methods are sometimes found in Six Sigma or other improvement approaches.

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Two predominant classes of operational processes:

- Transfer – products or services from these processes derive most of their value by moving materials, information, and/or assembly activities, (such as assembly lines or banking operations)

- Stationary – products or services from these processes derive most of their value by conducting most of the work in a few locations, (such as chemical batch tanks or research laboratories)

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The primary difference between these two classes of processes is how much movement the product has to make to establish full value for use by the customer. The more a product moves around in the operation to build value the more useful lean methods are to the operation. As more information is required for the product to achieve full value, the greater the need for lean methods to improve the process.

Simple Transfer Processes: (limited variation present, identification of causes of poor performance well known)

1. Most Service systems and processes

2. Most Production Control processes

3. Many Distribution processes

4. Human Resources processes

5. Most Office and Administration processes

6. Many Government services

Complex Transfer Processes: (variation is usually present, but directly controllable; system of transfers is complex…)

1. Automotive and Heavy Equipment Assembly

2. Aircraft Assembly

3. Computer and High Tech Electronics Assembly

4. Medical Device Manufacturing

5. Banking and Financial Ops

6. Most logistics processes

7. Many Government processes

8. Some Information System processes (if IS process is reasonably complex in distribution and support)

9. Food Packaging and Distribution

Complex Stationary Processes: (variation is present and has a large influence on system performance; causes of poor performance are unknown and may have complex relationships)

1. Chemical Manufacturing

2. Microelectronics Manufacturing

3. Pharmaceutical Manufacturing

4. Biotechnology Manufacturing

5. Medical Device Manufacturing

6. Metals and Metallurgical Manufacturing

7. Agriculture and Farming

8. Food Preparation

All business processes, no matter their type contain elements of movement. Materials are always moving in “Stationary” processes. The primary difference between a predominant Stationary and a predominant Transfer process is the way value is added to the end product. If most of the value added to the product uses a limited and small number of steps where the product spends a larger amount of time at each step, then this process is predominately Stationary. If value is added using numerous steps in a production or assembly line, then the process is most likely predominately Transfer in operation.

Kaizen is useful in both Stationary and Transfer processes simply because both processes can benefit from improving the movement of material and information. So, you should consider using Kaizen first to improve the flows in either type process regardless of the underlying causes of poor performance. Doing so will help to better identify the underlying causes of poorly performing stationary processes, or set the stage for the improvement of transfer processes. Either way Kaizen is a good starting point for process improvement.

If the problem(s) causing poor process performance are unknown, then the next step in improvement is to identify the unknown causes. Since neither TPS, Kaizen, nor Lean provide tools or methods for identifying unknown causes of poor performance you may need to consider the use of tools from other improvement methodologies, such as Six Sigma, TRIZ, TOC, etc.

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Stationary processes usually require the users to understand more about the

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process then simply how it moves. In order for the product or service to achieve full quality performance the user will need to understand which variables in the process control its performance. In addition, the user should also understand how the control variables vary over time.

Variation over time causes the process performance to contain a measure of uncertainty which affects the user’s ability to accurately predict future performance. Understanding process variation becomes a key element in building product value. Therefore, additional understanding is needed with “stationary” processes about the relationship between the input and output variables throughout the manufacturing process.

A system of improvement should include all the capabilities shown in this slide to ensure it has the ability to devleop solutions for all levels of complexity contained within the operation. Feel free to use this graphic as a guide in developing an effective improvement system in your operations.

Most products move though a circuitous route in the transformation of raw materials

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into product. Most of this movement does nothing for the product or service. Transforming raw materials into finished goods adds value at each step of the process. When materials sit waiting at a given step no value is added to the product. However, these materials consume space and time in the operation. Someone has to pay for this loss of value. Usually the business will transfer their costs of waste to the customer in the form of higher prices for the product. Therefore, it is often claimed these costs are lost value to the customer. In fact, these costs are lost opportunity to the manufacturer in the form of higher product pricing and lower competitive advantage.

Kaizen is useful in identifying where the kinks, time traps, and wasted efforts exist within a process. Eliminating the obstacles to flow helps smooth the movement of material and information along the value stream, reducing the costs due to waiting and waste.

When the transfer paths are optimized and non-value activities are minimized the

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process is said to be leaned out. At this stage the product or service undergoes transformation using the lowest cost methods available to the business. When a business decides to pass on value improvements to the customer in the form of price reductions we claim the customer is willing to pay for these value improvements.

In fact, the customer would like to receive the lowest cost, and highest quality products and services available. They do not care how a business decides to achieve these goals. So, it’s a bit of misnomer to hear that “value-added” activities are those the customer is willing to pay for.

Instead, “value-added” activities are those the business is willing to pay for to provide high-quality and low-cost products to the customer when they need them.

All requirements listed in this slide are needed to achieve an effective and

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sustainable system of improvement.

Self evident…

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Inventing new names for the same processes and procedures do not improve

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anything…

Insight and action are the key drivers in the process improvement game.

Wherever you are in your understanding of these concepts always strive to be transparent and clear about your improvement intentions and approaches. In doing so you will be able to lead others in the critical tasks of developing significant improvement solutions.

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The generalized improvement approach we will use in this case study is called the PDCA cycle developed jointly by Drs. W.A. Shewhart and W.E. Deming.

This improvement approach is used extensively in the auto, pharmaceutical, aircraft manufacturing, healthcare, medical device, and many other industries.

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This agenda will be used as a guide for managing the Kaizen improvement effort at the client company. It is a five day intense effort which seeks to obtain results in the shortest possible time. It blends both lean and six sigma methods together to develop effective improvement solutions.

Typical team size is from 3 to 8 people. More than 10 members in the effort will slow progress in the improvement effort. It is recommended that clear lines of responsibility are established for each of the team members early in the effort.

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So, let’s look at the first section of Kaizen Improvement at the Planning

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stage. This stage has two steps which are used for gathering information about the improvement:

1. Reason for Improvement, and

2. Current Situation

See the next slides for details.

At this stage of the effort we try our best to understand the present situation. It is extremely useful to obtain the raw data rather than rely on memory of each of the team members…

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A useful step early in the improvement effort involves rendering the raw data into pictorial form so everyone sees the same picture. This step is useful in achieving clear understanding of the present situation and gaining consensus on the nature of the business issue.

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Summarizing the previous graph and situation is useful at ensuring all members of the team interpret the chart/data correctly.

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At this point in the effort we now have some understanding of the business situation. In most cases our understanding leads to more questions which need to be resolved to insure we are working on the right issue.

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Sometimes it’s useful to clearly establish the goal of the effort to ensure all

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members are on the same page. Some people think more abstractly than others. For those people it’s sometimes useful to recast the goal into a different form to make the right neural connections. This slide is simply a repeat of the earlier one showing the train tracks and time traps. Repetition is often a great learning tool—if use wisely and sparingly.

Again, some folks tend to work in a linear manner following a stepwise approach

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to all things manufacturing. For those folks we often step into the earlier PDCA process and breakdown each step into mini-steps. This ensures everyone completely understands the roadmap for improvement as we move through the process.

The primary tool for Lean improvement is the Value Stream Map (VSM). The value

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stream map on this slide illustrates the material, work, and information flows used to build the products and/or provide services within a business.

The goal of Lean improvement is to identify areas within these flows where waste can be removed or reduced. In removing waste or eliminating unnecessary flows, a business is able to reduce its operating costs while continuing to provide high quality products and services.

The seven forms of waste described within TPS are:

1. Excess Motion

2. Over Production

3. Transportation

4. Unnecessary Inventory

5. Waiting

6. Unnecessary Processing

7. Defects and Rework

This is the document we will use to track our progress on the Kaizen improvement

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work and to discuss our findings with the management team. It is often advisable to provide updates to the management team throughout the improvement effort. These updates can be provides using any format agreeable by the management team, i.e., email, meeting, telecon, etc.

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Here is an A3 example from Medtronics which uses a DMAIC approach to conduct and track their stepwise improvement efforts.

For my work, I used a comprehensive Excel workbook to track the Kaizen improvement effort which includes a A3 Storyboard template.

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This is the document we used to track our progress on the improvement effort which is found within the Excel improvement workbook. We used this generic A3 Storyboard to discuss our improvement progress with others and the management team. At the end of the effort we have a historical record of the improvement work and the solutions used to achieve the improvement goal(s).

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Having completed the Plan part of the PDCA we laid the groundwork for the next step in the Kaizen effort.

So, let’s look at the second section of Kaizen Improvement at the Planning

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stage. This stage has two steps which are used for identifying and implementing the improvement opportunity:

1. Analysis and Action Plan, and

2. Change Implementation

See the next slides for details.

Instructor Notes: We will use the restaurant service process for much of

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the presentation, because it’s a process that many people are familiar with.

Let’s follow through a simple example to get a sense of how a Value Stream Map is used to identify the material and information flows in a process. The above map show the process of delivering service in restaurant operation. This process has been simplified for brevity.

Notes: Typical icons used to prepare the VSM.

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Why use a Value Stream Map over a typical Process Map? VSMs are

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designed to track both material and information flows. They provide understand associated with inventory held (WIP) along the value stream and wait time required at each step of the process flow.

Process Maps simply provide understand how the process operates at a high level, and do not provides use understanding on wait time, WIP, throughput, or cycle times for material movement. Therefore, VSMs are the appropriate tool for the job of waste reduction, which is our primary goal.

Example VSM for a manufacturing process. Note the movement of both information and material. Product flow can be impacted by time traps or kinks in either or both flows. After creating an accurate VSM, your job is to identify the areas in the process where either flow, information or material, are impacted. Then, after identifying all the impacted areas the team is responsible for developing solutions that eliminate or smooth out the impacts areas.

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An example of a typical restaurant service fulfillment VSM. Again, use this

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An example of a typical restaurant service fulfillment VSM. Again, use this VSM to identify the areas were the order is delayed in getting to the customer. Then, develop a new flow that provides a smoother streamlined approach to meeting order demand.

This slide is initially held blank by the instructor. It can be use to elicit audience participation in developing a simple VSM for making coffee. If there is time available, then ask the audience to sketch out their best guess at a VSM for making coffee using the information shown earlier.

Feel free to go back to the VSM Icon slide to jog the memory of the audience. This exercise can be done by each member of the audience, but I would suggest you have them pair up to work together to get a feel of the process. Provide the audience about 5-7 minutes to put their VSMs together. Then, show this slide by clicking the mouse once. Remember, there will always be some differences in perspective on what is flowing and what is not. Walk through the flows in this slide so that the members of the audience will get an idea how a VSM works and is constructed.

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Back to the Case Study… I worked with the client team to understand their “As Is” or “Present-State” process VSM. This slide shows the original sketch of their existing change management process. Details are provided in the slide.

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Most people will find the previous slide hard to follow. So, this slide is redrawn to provide a much clearer picture of the “Present-State” process. Notice how much information is passed around to conduct a given change. While the material flow is fairly straight forward the information flow is encumbering and wasteful. Therefore, in this case the information flow slows down the entire process of document or material change due to an inefficient management of information flows.

Note: The link at the bottom of the slide marked “Future” is there to switch between the “Present-State” and the “Future-State” processes. If you have arrived at this slide for the first time, then do not use this link. Instead, move to the next slide in the usual manner.

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Here is the actual white board sketch of the proposed “Future-State” VSM. In essence, this process eliminates most of the wasteful information flows, as you should notice. In eliminating these info flows the document change is able to move through the process impeded by the stops and starts encountered in the “Present-State” VSM.

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Again, the previous slide may be hard to follow for most folks. This slide was constructed to make it easier to follow the process flows. It’s not necessary to go through this slide in detail. Instead, you should note the key areas of interest.

In the upper left we start with the customer submitting a change request. In the lower right you will notice a triangle indicating the inventory of approved changes notices—this is the endpoint for the process. The Document Control area makes the actual changes on computer and generates the paper documents for review. What you should notice is the reduction in the lines of information required to process a change request.

Instructor Note: In the lower right corner of this slide you will see the link designation indicated as “Current.” When you click on this link PowerPoint will take you to the original “Current-State” process slide. When that slide appears note the number of information points in the present process. Then, click on the link in that slide to take you back to this one. Move back and forth a few times to give the audience a clear sense of the reduction in information flows supported by the new “Future-State” process. The reduction in information flows should have a direct impact on the cycle-time of a DCN. Later on in this presentation we will demonstrate this observation by comparing the performance of the new DCN process.

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This slide show an update of the A3 Storyboard and the progress of the

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This slide show an update of the A3 Storyboard and the progress of the improvement effort. Notice in the lower right box the “Plan” actions and activities. This area is where the Kaizen improvement effort shows its value. There are already six suggested improvements entered into this box and the job is not yet done.

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In the last part of the DO stage for the PDCA we implement the desired changes. At this stage of the improvement process we typically identify a need to implement a 5S for the area to enhance the organization and clean up any apparent waste found visually.

See the next slides for details.

This is an animated slide, so walk through it slowly to insure the audience

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follows through your finding during this effort.

See slide above for details, but the Document Control area has undergone a number of moves over the past few years. Given the frequency of moves they never really get settled. Therefore, the area is always in a poor order and cleanliness. This is most certainly one of the reasons why the internal processes in the Doc Control area suffer from poor material flow. A clear problem that needs to be resolved by the management team.

The Doc Control personal would not allow me to take the before pictures. So, this slide is representative of what I observed, but is taken from a stock internet source. Some of the work areas in the Doc Control area were in worse shape that those shown in the pictures above. It’s a wonder anything was able to come out of the Doc Control area and a testament to the hard work of that team to keep the work moving with few issues.

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Slide says it all…

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Example of one the training slides used to support the 5S effort in the Doc

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Example of one the training slides used to support the 5S effort in the Doc Control area.

Most people supporting a Lean effort often speak of “Muda” consisting of the typical seven forms of waste often encountered in an operation. However, very few ever speak of the two other forms of waste “Muri” and “Mura.” Look closely at the definitions of these two forms of waste. Have you ever encountered a work situation where these wastes were present and not addressed? Remember this slide as at the end of the presentation I will as a question of the audience where the answer will be found here…

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One of the fundamental disciplines supporting Kaizen improvement.

Often times when a 5S effort is implemented the team does not have any guidance on the order of this work. This job aid is often useful in guiding a team in the proper order for conducting a 5S effort.

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Again, the Doc Control personnel were reluctant to have me take the “after” pictures Again, the Doc Control personnel were reluctant to have me take the “after” pictures of their 5S effort. However, I’m pleased to note that these pictures were typical of the their implementation. It took the team all night to complete the 5S effort, and some from the management team even pitched in to help take on the workload. A very good team effort!

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As you can see from this slide, both the Analysis and Status of Work are still in the Preliminary stage. However, there has been much work done during the week to improve the DCN process.

This slide shows a close up of the Status of Work for the Kaizen effort. Eight changes were noted thus far for the DCN process. I allowed the members of the Kaizen effort to explain both the development and present activities going on for this work. I often step back from the work at this stage in the process to give the team an opportunity to develop their own sense of ownership for this improvement effort. After all, I simply an agent that motivates, facilitate, and supports the Kaizen effort. The work is always owned by the client.

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In the “Check” phase of the PDCA we are well underway into the Kaizen

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In the “Check” phase of the PDCA we are well underway into the Kaizen effort. Many of the changes have already been made, but standardizing those change will take some time. Many of the changes to the DCN system will need to be documented and processed through the new DCN system. I call this a recursive check on the new DCN system.

See the next slides for details.

Self-evident….Self-evident….

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A3 Storyboard through the Check phase of PDCA…

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In this final phase of the PDCA Kaizen effort I worked closely with the team

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In this final phase of the PDCA Kaizen effort I worked closely with the team to put together the last remnants of the implementation plan. We established roles and responsibilities supporting that plan and developed the timeline for completion. We then worked to briefly review the activities for the week and prepare a final presentation for the senior management team.

Close out agenda for the Kaizen event.

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Close out agenda for the Kaizen event.

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