Defining and Creating Customer Value

At the heart of Lean is a focus on the customer and a spirit of continuous improvement. In this post, I want to discuss the concept of customer value.

Many people think they have a firm grasp on the concept of value, but in reality understanding how value is created, applied, measured, and translated is a difficult task. This is because each and every person has their own perception of what constitutes value and this belief of what value is changes over time. Though it may prove difficult, identifying what creates value for the customer is the very first principle of Lean; it’s a task that must be completed before beginning any process improvement efforts.

Upon the completion of this task, not only will you know what your customers value, you’ll also have a basis for defining your day-to-day activities. Having that level of definition will help answer 3 important questions:

  1. What should I be doing?
  2. How should I be doing it?
  3. Why should I be doing it?

Everything we do on a daily basis, no matter how small, should create some kind of value for our specific customers. Defining said value forms the foundation upon which you build Lean processes to deliver that value and satisfy your customer. For an activity to be value added, you must meet all three precise criteria:

  1. The customer must be willing to pay for the activity.
  2. The activity must transform the product or service in some way.
  3. The activity must be done correctly the first time.

If an activity does not meet all three value-added criteria, then it’s deemed officially to be non-value-added.  In Lean, non-value-added activities are further broken down into two types of muda (or waste):

  1. Type-1 waste includes actions that are non-value-added, but are required for some other reason. These are typically support activities that allow those critical value-added activities to take place.  These forms of waste usually cannot be eliminated immediately.
  2. Type-2 wastes are those activities that are non-value-added and are unnecessary. These activities are the first targets for elimination.


Many activities may seem as though they’re necessary or value-added, but on closer examination, viewing them through the eyes of the customer, they’re not. For example,  if you are completing paperwork to pass on to another department, or creating reports for your supervisor, the first order of business should always be to define what information is of value to the person receiving the documents you’re creating. You may find that a portion of the information you’re collecting or reporting is of no value to your “customer,” and therefore collecting and documenting that information only serves to create waste in the process. 

Identifying customer value and seeking out and eliminating waste takes effort — it’s a journey that begins with challenging the status quo. If you’re ready to accept this challenge and begin your journey, call the Office of Continuous Improvement at 906-487-3180 or email us at involvement@mtu.edu. We will work with you and give you the tools you need to get you headed in the right direction.

Reference
     – You are welcome to check out this book and others from our Lean Library.
Sayer, Natalie J., and Bruce Williams. Lean for Dummies. 2nd ed. Hoboken, NJ: Wiley, 2012. Print.

Menlo Innovations’ Business Value of Joy Workshop

Thank you to our returning guest blogger, Kaylee Betzinger, a former student process improvement coordinator here at Michigan Tech and currently an intern at Amway in their Enterprise Excellence Department.

Menlo Innovations Daily Stand UpI recently had the opportunity to go on an industry tour to Menlo Innovations. Menlo Innovations is a custom software development company that utilizes a High-Tech Anthropology approach and incorporates continuous improvement principles in their day-to-day activities to develop and build new and innovative programs for their customers. Richard Sheridan, Menlo’s founder and CEO, is the author of Joy Inc. (How We Built a Workplace People Love). Menlo has won numerous awards, including Inc.’s 500 Fastest Growing Private Companies in American (Inc. Magazine), 101 Best and Brightest Companies to Work For (Metro Detroit), and the Alfred P. Sloan Award for Excellence in Workplace Flexibility (When Work Works).

A hot topic lately at Amway has been Visual Management. Several different departments at Amway Headquarters have expressed interest in Visual Management, so we (Enterprise Excellence) thought, what better way to teach Visual Management than to go to a world renowned company that is known for their culture and visual workspace (AKA, go to the Menlo Innovation Gemba). Menlo welcomes companies to come in and take one of the many tours or workshops available and learn more about what it means to have Joy in the workplace. We were able to take the Menlo Innovations Business Value of Joy Workshop, which is a private workshop geared toward a topic of our choosing (Visual Management) and is given by one of the partners.

James Goebel, Menlo’s Chief Architect and a Partner was our workshop facilitator. Before our tour even began we were able to participate in their companywide daily standup meeting. Their daily stand up (see Figure 1) takes place every morning at 10:00 am. Everyone gets up from what they are doing, forms a large circle, and explains what they will be working oMenlo Figure 2 Open Workspacen for the day and if they are in need of any assistance from other team members. I was astounded that everyone was able to participate (60+ employees) and keep it under 10 minutes. What a great way to kick-off our workshop!

After the stand-up, James began talking about the Menlo culture and the
different behaviors they’ve incorporated, such as an open and collaborative workspace (no walls, cubicles, or designated stations/desks, see Figure 2), estimation without fear, and making mistakes faster. Making mistakes faster is (what I believe) a key in any continuous improvement culture, so I inquired further and James explained that you have to create an environment where problems are obvious. When the problems are obvious and visual, you can fix them and generate results much quicker. A perfect example of this is in their Weekly Project Tracking Board (see Figure 3). For each day of the week they’ve laid out exactly what each project pair will be working on, on what they call a story card. The story cards are a simple, Menlo Figure 3 Project Trackerhand written description of what is needed for this piece of the project, an estimation of how long this will take, and a status in the form of a colored dot. They have 5 different colors with a different meaning for each (as seen in the upper right hand corner of each story card). The colors and meanings are as follows: yellow—currently in process, orange—done in the eyes of the team and waiting for QA approval, red—needs additional attention, question/need assistance, or waiting for a response from the client, green—completed, and blue—cancelled. This project tracker is an extremely simple and effective way to track projects. Anyone in the building can walk over to the board and see the progress on any given project.

Anywhere you look in the building you can see how Menlo has integrated visual management and visual cues. You can feel the Joy in the air when you walk in, and that is something to be cherished and striven for. I would recommend taking a Menlo tour to anyone interested in learning more about a continuous improvement culture and what it looks like to have Joy in the workplace (plus you get a copy of Rich Sheridan’s Joy Inc.).

 

 

Trend Prediction

Hello, this is Elizabeth, one of the student process improvement coordinators at Michigan Tech. This semester one of the classes I am taking within the department of mechanical engineering is “Engineering Design Process.” Within the class we are charged with designing a way to change the landscape of the moving luggage industry. Innovation is one of the main objectives. I decided to look at how I could integrate my course work and job. Taking advantage of the Lean Library in the Office of Continuous Improvement  I checked out the book The Innovators Toolkit.

Book

The book starts off with having the user define the opportunity. It stated that, “Taking thousands of shots at an undefined target (unfocused ideation) won’t result in any innovation goal”.  From here the book is broken up into four parts; defining the opportunity, discover the ideas, develop the designs, demonstrate the innovation. Within these four parts there are different techniques to be used. I chose to focus on part two – discover the idea and more specifically technique 16: trend prediction.

In this age of rapid change and a push towards innovation it is important to be able to accurately predict where future trends will be in order that one’s invention matches the needs and wants of those trends. After searching around online I found that a lot of the organizational templates used in the book are available to the public for free. I would encourage you to look at them and use them to your advantage

 

 

Network Drive 5S Best Practices

Most people practicing Lean know 5S–Sort, Set, Shine, Standardize and Sustain–and they know it can be applied to many things. Here at Michigan Tech we have applied this thinking to shared network storage spaces. I have now facilitated 4 of these events.

At the first one I facilitated, I obediently followed what I was taught and started with Sort. We went through all the files and worked on deleting the garbage. For Set, we worked on putting the remaining files into a logical order and making things easier to find.  Shine involved going back through the files (again) and renaming them consistently. When we came to the Standardize step it basically turned into documenting what we had spent a lot of time doing–what should be kept, for how long, where to store things, and naming conventions. Finally, the Sustain phase, including setting up regular audit schedules and procedures for making sure the drive stayed neat and organized.

In the end we did leave with a well-organized, easier to navigate shared drive, but the process itself was frustrating and extremely long. The team spent an inordinate amount of time during the Sort and Set phases strongly “discussing” whether a specific file should be kept or deleted and what folder it should be in. We also did think of metrics, kind of. We looked at the overall size of the share and, in the end, did make it smaller. But if you are only measuring the size of the share and your goal is to minimize it, then the simple answer to achieve perfection of that measurement is to just delete everything and use zero GB, right?

Around that time, I read an article, “5S Shakeup” by John Casey on the Quality Progress website, and had a revelation–perhaps we should be starting with the 4th S instead. On my next network drive 5S event I was able to try this out. We started by creating the standards document. I began this discussion off with one simple question–what is the purpose of this drive? We talked in general about what should be kept at all, how long to keep files, and how to name them. This completely focused the whole event and eliminated the extended discussions on specific items. The Sort, Set, and Shine could all be done in one pass through because the rules were already defined, and these steps were split up and done as homework instead of in a big group. The individuals returned to the next meeting with just a few files they were uncertain about, and the group made decisions on their disposition together.

I also worked on the metrics. At the pre-meeting with the team leader, we dug more into why they wanted to attack this problem. This helped to identify various metrics that would actually measure what they needed them to. If the why was because new staff can’t find things easily, we did several before and after time tests to see how long it took to find various files.  If the problem involved just too much stuff, we still looked at the overall size, keeping in mind that zero is not really the goal, but more like reduce and then maintain that reduced size. We looked at the number of root folders, total number of folders and total number of files.

This event went much smoother, and I heard a lot of comments from the team members that they really enjoyed the experience.  When another campus facilitator was slated to do one of these events she asked me for some tips as she knew I had done a few, so that prompted me to write some Best Practices, which I have made available here: Network Drive 5S Best Practices January 2014.

Lean Principles and Tools in Industry: Part 2

Thank you to our returning guest blogger Mary Fogelsinger-Huss for another excellent article on how Lean is used in industry. Mary is an ASQ Certified Six Sigma Black Belt working for the Dow Corning Corporation in Midland Michigan. She has nearly 30 years experience in the chemical industry, with nearly half that time involved in quality practices for various product lines in the company. She holds a bachelors in Chemical Engineering from Michigan Technological University.

Many Lean devotees are very familiar with the idea of 5S and the benefits an orderly work space provides.  Not only does the 5S tool make the work better, it provides a much less stressful working environment.  To take that thought to another level, the work process itself needs to be studied. A very powerful tool in identifying waste in a process is the Process Map. There are many types of maps that can provide insight into the workings of a process. One of the maps used frequently in a Lean activity is the Spaghetti Diagram. It’s called this because if it’s done correctly, your drawing will look like a plate of tangled up spaghetti! This tool helps you understand the route the product, or operator, takes through the process. The idea is to trace the route over a period of time, to actually see the movement. The map is typically done with paper and pencil, and follows the movement through the physical space, so they’re usually quite messy!  They are also very revealing.  This example is in a test lab:

spaghetti diagram

The different lines represent the number of trips a person took in performing a test.  The background is the layout of the lab, with the test equipment noted by numbers (or dots in this poor image). This shows that the operator performing the test walks back and forth quite a bit between the different pieces of equipment.  Depending on your goal, this could be good or bad…good for exercise, bad for productivity!

The project team recognized the “waste of motion” in the process, using the spaghetti diagram, and was able to move equipment around to minimize the trips from one bench to the other throughout this test. This change allowed the test to be completed in less time, improving customer relations (production buildings want to know results FAST!) and increasing testers’ productivity.  A simple tool, providing impressive results.

 

 

Let’s Ditch the Report Out

We are pleased to present this guest blog post by Robert Hiltunen, Director of Auxiliary Services at Michigan Technological University.

What did you say? Ditch the report out? Are you crazy?

Reporting Out 3A normal feature of organizations that use lean methodology is the expectation that projects regularly “report out.” A report-out event allows the organization to recognize and celebrate the achievements of the various project teams and their members. Perhaps more importantly, others are able to learn from what the project teams have accomplished. In this way, we continuously improve our systems, share and build on knowledge, and reduce duplication or “re‐inventing the wheel.”

After some deep reflection about a blog I read by Dave LaHote entitled “Say Goodbye to the Report Out,” I came to realize that there are different types of report outs. With this headline I am talking about the report out that is elicited from people closest to the work during my gemba walks, when I ask “How is it going?” For those who know me, the first thing that comes out of my mouth is “How’s it going?,” “How’re you doing?,” or “What’s happening?” Of course, not using open, probing questions causes the employee to naturally report out what is going on. Then I will ask how I can help, and the response is “I’m fine; no need for help.” This type of report out causes a transition of problems from the employee to me, and I then offer suggestions that might help solve the problem.

Instead, I should be asking about a specific observation which would lead to follow up questions that would increase my understanding and help coach the employee to solving their own issue. So I must learn to ditch my report-out eliciting questions and take a deeper dive into the real issues at hand.

Easier said than done, so if you see me asking an employee at the gemba “How’s it going?” please remind me that this is not the time or place for a report out.

OHIO — Only Handle It Once

The following guest post was written by Kaylee Betzinger, a former student process improvement coordinator here at Michigan Tech and currently an intern at Amway in their Enterprise Excellence Department.

For the past 13 weeks I’ve been interning with Amway in their Enterprise Excellence Department. While in this position I’ve gotten to partner with a variety of cross functional teams throughout the business and within the West Michigan community. One project in particular is a non-profit venture with Mel Trotter Ministries. Mel Trotter Ministries exists to demonstrate the compassion of Jesus Christ toward the hungry, homeless and hurting of the greater Grand Rapids area (www.meltrotter.org/mission). They are able to provide a variety of services to these people in need because of their 4 thrift shops located throughout West Michigan. I’ve been working closely with Greg Alvesteffer, Assistance Vice President of Retail, on their donation process.

Before I began working with Greg and his team, their donation processes were quite a mess. First and foremost, there was no standard process spanning all of the stores (yikes!), making it difficult for the store managers and Greg to share ideas with one another. We also found numerous wastes in their process, the biggest being over processing. Multiple employees were touching the same donation multiple different times which was resulting in huge batches (they would create a batch of 50 donated clothing articles, then push them down an “assembly line” for the next employee to work on). While observing at the Gemba, we asked the question “Why do you create these batches?” That got me a variety of answers and a few weird looks, but ultimately the answer was “that’s just how it’s always been,” a typical answer in non-continuous improvement environments.

After multiple days observing and a few hundred questions we began to experiment and change things around a bit. My Amway mentor, Steve Sweers, and I explained the value of one-piece flow in what Steve calls the OHIO method (Only Handle It Once). This really seemed to resonate with Greg and the employees we were working with.

After a few weeks of experimentation, I did some time study evaluations to compare the old process with our new process and the results were astounding! By eliminating the batching process and installing a one-piece-flow production we were able to decrease space requirements by 70%, reduce labor requirements in that area by 83% (they were able to reallocate several employees to other departments within the store), and ultimately increased productivity by 480% (yes, that is possible!). It’s incredible to know that we were able to get these results without any capital investment. All we needed was to apply some continuous improvement principles in their processes and presto, huge improvements!

Being able to share this knowledge with a business like Mel Trotter has been such a rewarding experience. I will be continuing this partnership this fall where we plan to continue to make improvements throughout their retail stores.

 

Reinventing ICE?

We are pleased to present this  guest blog post by Megan Ross, Business Analyst in Auxiliary Services and campus Lean Facilitator.

As a Business Analyst I have many “projects” that come across my desk, my work.  Some of these so-called projects are really just things that I need to do and be done with while others require a lot of time, effort and need some further prioritization.  I have been tracking “What’s Happening” in a Smartsheet, which I have been using as a kind of overall personal kanban.  I can see what things I have on my plate, what department it is for, when the work started and some notes about where it is currently at.  My boss and I also began using Trello for kanbans on bigger projects that show all of the little tasks, due dates, etc.  This still didn’t help to prioritize all those things on my plate in the Smartsheet.  What work should I be spending my time on?

The next phase in the evolution of my personal kanban was to add in a status column on Smartsheet.  Great!  Now I can see if I am actively working on it, it is just an idea, someone outside is working on it, it’s not started yet, or I’m waiting for a reply.  I also put in a column with a follow up date and set up a reminder based on that date.  This eliminates the need for me to constantly review everything on the sheet.  I just need to wait for the reminders on the Waiting for Reply or Outside Work Happening statuses.  But I still have all of the Active work and Not Yet Started Work.  What do I work on now?

Smartsheet

I started playing around with assigning a type to each piece of work.  My first thoughts were categories ranging from “Just Do It” items which would be simple tasks that I could just work on to “projects” which were some vague amount bigger in scope and outside involvement.  I took all of the current things on my list, put them on sticky notes and tried to put them into these categories, but it just didn’t work.  The categories were not quite right and some items didn’t fit in any or fit in more than one.  Then it hit me…there were two criteria that I was gauging each item on, but I was trying to combine them into one!  This started a brainstorm session with my boss.  We spent about an hour hashing things out and then fitting those sticky notes into my new matrix.

The first criteria is how much involvement, effort, or work the item is for me personally.  Is it just day-to-day tasks that I need to work on, a request I need to make on someone’s behalf, doing a little bit of investigative work, collaborating with others, or an in-depth analysis of something?  The second criteria is how much outside engagement is needed for this item from none to basic to advanced.  Now I have a matrix!

IMG_20140825_072752829

Some of the sections still have a lot of sticky notes in them, so I still needed a way to refine them.  I realized that each one comes with some kind of priority or impact level assigned either by the requesting department or myself.  This could be a multiplier added into the mix.  That was when it hit me.  I just recreated the ICE prioritization tool in my own words!  (For those of you without a Michigan Tech login to view the Quick Point, ICE is a lean tool normally used to prioritize countermeasures.  You rate the countermeasure on the Impact it will have, the Control you have over it, and the Ease of implementation, multiply the numbers together and get a ranking.  You can also check out the ICE Rap that one of our former student employees made about a year ago.)  For my matrix, my level of involvement or effort relates to the ease – how easy is it for me to get done, control is the level of outside entity engagement and the impact is that priority multiplier.  I am now moving forward with refining my prioritization and learning what the numbers actually mean.

Sometimes you have to work through it on your own and in your own language to really understand something.  The other lesson I learned is that the tools and methods we learn that we call Lean or Six Sigma or any other title you give it can be applied in many different ways.  Just because you learn about ICE as a tool for prioritizing countermeasures doesn’t mean that is where its application ends.  I certainly wasn’t thinking of how to prioritize my work as a “Lean” project!  It is about the way of thinking and applying that learning in all kinds of other ways that really has value.

Welcome Elizabeth Wohlford!

The Office of Continuous Improvement has hired a new Student Process Improvement Coordinator. Elizabeth is a third-year Mechanical Engineering major and also does research in the Biomedical Engineering department under Dr. Neuman, is Vice- President of Michigan Tech’s student chapter of the American Society of Mechanical Engineers, and is webmaster for Michigan Tech’s Society of Women Engineers. She brings to the office previous experience in Six Sigma and Lean Practices from previous internships with Johnson Controls and Kimberly-Clark along with a willingness to learn more about the world of continuous improvement.

Here Elizabeth will introduce herself and share some thoughts about her new role:

When I went into my first industry experience as an intern for Johnson Controls I had very minimal exposure to the world of continuous improvement. I was given a process improvement project dealing with automotive door panel scratch testing and tasked with identifying the variables that affected performance. I was able to go through Green Belt training with using the project to learn Six Sigma methodology. While working at a mill for Kimberly-Clark in Utah I was exposed to Lean practices and how crucial it is to have standard processes in the world of mass production manufacturing. When I found out about this open position in the office of Continuous Improvement, I knew it would be a great opportunity to continue the learning process and be a leader in conducting improvement efforts on campus.

Over the past few weeks that I have been working in the office, I have put together a training course for teaching about Lean practices. I will be working on assisting with the coordination, data collection and facilitation of Kaizen Events.

I am grateful to be given this opportunity and look forward to adding value in the office by executing on initiatives that drive Michigan Tech’s campus to the next level.

WohlfordElizabeth

 

Lean Principles and Tools in Industry

We are pleased to present this guest blog by Mary Fogelsinger-Huss. Mary is currently an ASQ Certified Six Sigma Black Belt working for the Dow Corning Corporation in Midland Michigan. She has nearly 30 years experience in the chemical industry, with nearly half that time involved in quality practices for various product lines in the company. She holds a bachelors in Chemical Engineering from Michigan Technological University.

Lean Six Sigma has been widely accepted in the industrial setting as a method to improve many types of processes. The Lean Toolset is easily applied to nearly any setting that you can think of. The basic fundamental ideas of “making value flow” and “eliminating waste” can be as appropriate for a manufacturing company as it can for your own home. The first idea that many people like to apply is the “5S” concept:  Sort, Straighten, Shine, Standardize, and Sustain. The first three are usually pretty easy to accomplish and are pretty straightforward in many settings…it’s that Standardize and Sustain thing that many of us struggle with. Here is an example, using a receiving dock at a manufacturing site:

1-beforeNotice the stuff piled on top of the drums, and the inability to access many of the drums. In working with this team, they realized that many of the items had been in the area for far too long, and they weren’t sure why they were there.

SORT will eliminate the items that are not needed or are in the wrong spot. Remove those items to a different location by keeping in mind the idea of “Runners, Repeaters and Strangers.” Runners are items used daily, and should be kept close at hand. Repeaters are items used weekly and should be kept in an easily accessible storage area. Strangers are those items that are rarely used and should be in a designated location. Anything that doesn’t get classified as one of those goes to the “Red Tag” area, and is either moved to the appropriate location or disposed of.

STRAIGHTEN  is the organizing of the area in accordance with the Runners, Repeaters, Strangers strategy and determining the optimum positioning of items. This is much easier with all the excess (waste!) removed from the area.

SHINE is the process of cleaning the area and upgrading the surroundings to a level that encourages pride in your work area, and making sure all your work items are in a usable condition, when needed. Whether that means replacing cabinets or a simple coat of paint…it all adds to increased pride in your work space.

STANDARDIZE the area to ensure items are returned to the appropriate spot and that any “nonconforming” item is recognized right away.  This is usually accomplished by labeling areas, creating shadow boards, or marking an area with text for what goes there.

SUSTAIN is one of the “5S’s” that we all struggle with. Everything goes great for a while, then we get busy or rushed and just “put this here for a minute”…then never get back to take care of it. One way to manage this is through the simple reminder of a photo.  Many of our areas have a photo of what the area should look like, and at the end of the day (or shift) we make sure it’s returned to that image. The photos are posted in a prominent place like a bulletin board or on a wall near the process area.  Also, in a more formalized 5S program, a monthly audit can be used1-after to ensure the gains made with the 5S activity are maintained.

Here’s how the area looks after the 5S. Notice the paint lines on the floor and labels on containers. All unneeded equipment and materials have been removed and, as you can see, the floor just shines!

Which area would you rather work in?