Guest Post Archives | Continuous Improvement Blog

Quantifying the Value of Lean Improvements

Published May 14, 2020

We are pleased to present this guest blog post by Adam Wellstead, PhD, Associate Professor of Public Policy, Social Sciences at Michigan Technological University and 2019-2020 Faculty Fellow.

Every year, the Office of Continuous Improvement (OCI) undertakes a number of wide-ranging projects to make processes throughout our campus more efficient and effective. Often the project outcomes go unnoticed by a majority of the Michigan Tech community, including the bean counters. This contrasts with the manufacturing sector where Lean tools are applied to the creation of a tangible product, and costs/savings are meticulously tracked. Michigan Tech is a highly complex multiple million dollar business (of higher education), and OCI projects have improved safety and reduced waste. However, the accrued financial benefits are largely invisible because the current cost to the university for most of its processes is not documented. This year, I was a Faculty Fellow working with the OCI and one of my projects was to account for these costs.

Other universities who employ Lean methods and tools also struggle to show the financial benefits. One possible approach to account for these invisible benefits of Lean in a system that does not closely track expenses is to apply counterfactual thinking. This approach has played an important role in the efforts of social scientists, particularly historians, to assess causal hypotheses. By making claims about events that did not actually occur, counterfactuals play a necessary and fundamental, if often implicit and underdeveloped, role in the efforts to assess the hypotheses about the causes of a phenomena.

A well-known example is, had George W. Bush not been elected, would the Iraq war have occurred? Counterfactual analysis makes causal claims about events that did not actually occur; that is, non-observations. Social scientists have developed well-established criteria for judging counterfactual arguments (Table 1). For example, we cannot make implausible counterfactual claims. Looking at the Bush-Iraq War case, had George Bush not been elected, it is implausible to claim that Iraq would have been become a fully democratic country.

Table 1	Criteria Checklist for Judging Counterfactual Scenarios
Criteria	Description
Clarity	Specify and circumscribe the independent and dependent variables (the hypothesized antecedent and consequent)
Logical consistency	Specify connecting principles that link the antecedent with the consequent and that are cotenable with each and with the antecedent
Historical consistency (minimal-rewrite rule)	Specify antecedents that require altering as few “well-established” historical facts as possible
Theoretical consistency	Articulate connecting principles that are as consistent with “well-established” historical facts as possible
Projectability	Tease out testable implications of the connecting principles and determine whether those hypotheses are consistent with additional real-world observations

In the more modest world of Lean processes, we also can make a counterfactual causal claim about a non-observation, namely, what would have happened had the Lean process not been undertaken and what would have been the costs accrued by not addressing waste and inefficiencies? One recent OCI project highlights this approach. Daniel Heights has 52 buildings, all utilizing 1 of 13 different water heater pumps for circulating hot water to residents. This made it very hard to manage and keep records of the inventory for each pump type, brand, horsepower and orientation. Due to the amount of differentiation between the pumps, the process for reordering/replacing each pump lacked standardization and had many errors.

In 2019 standardization of pumps was implemented and an inventory of the pumps was taken. Now the shelves only contain needed pumps and are organized into a set space. Processes to perform inventory audits and reorder pumps are in place. The number of different brands of pumps being used for the water heaters in Daniel Heights went from 13 to two. They are also only using two different sizes of pumps when they were using five before. Table 2 lists the benefits that the project participants identified as well as the estimated yearly excessive costs of $8,461 had no action been taken (the counterfactual). The estimated value was determined by a deliberative process, keeping the criteria for judging counterfactual scenarios in mind, involving at least three OCI facilitators.

Table 2	Estimation of Excessive Costs Incurred by Michigan Tech
Area Improved from Standardization	Excessive Costs
Water Use/Efficiency	$100
Storage Space	$286
Time to Reorder	$375
$ Tied up in Inventory	$4500
Hrs. Recording Inventory	$270
Staff Training for Pumps	$330
Bulk Inventory	$2600
Total $ Saved	$8,461

Table 3	Estimated Costs Incurred by Michigan Tech Over Five Years
Year	Net Present Value
1	$8,058.10
2	$7,674.38
3	$7,308.93
4	$6,960.89
5	$6,629.41
Total	$36,631.70

This is an example of one fairly modest project. In the coming months, the OCI will implement this procedure for all of its projects being undertaken.

Michigan Tech will be a very different place this Fall, but one constant will be the continual need to root out waste and inefficiencies, and thereby reduce costs.

Welcome, Alexandra!

Published September 19, 2018

By Ruth Archer

We are pleased to welcome Alexandra Holmstrom to the team in the Office of Continuous Improvement.

Hello,

I am Alexandra Holmstrom, the new Office Assistant in the Office of Continuous Improvement. I am very excited to be working at Michigan Tech and especially with all the highly dedicated and talented members of the OCI team!

I am new to Lean but as I learn more, I am realizing that I have been practicing many of the principles all along! I have always looked for ways to be more efficient and effective, thinking of ways to improve customer service, reduce costs, and remove unnecessary steps in day-to-day tasks.

There is much to learn and accomplish during my training, and I am eager to use all the newly acquired knowledge and skills. In the few short days I have been in the office, I have learned what Kaizen, PIC, PDCA, and Kanban stand for. If you are wondering what these words and acronyms mean, come see us in the office or visit us on our website.

I look forward to meeting and working with everyone on and off campus!

Thank you!

Lean at Girl Scout Camp

Published July 19, 2017

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Time and time again I am amazed by the flexibility of lean and its endless applications outside of the office. It seems that no matter what sort of process I have going I can always improve it in some way. Whether it be how often I perform regular maintenance on my car, how I stock my pantry, or how I prioritize my chores for the evening. The most adaptable part of lean is the use of people. Not a single aspect of lean was designed for one person and one person alone to complete a task, but rather to be easily used in a team.

Being a college student there are many times that you get put into a group of total strangers and you are expected to get the task done. However, each member goes into the group with a different set of priorities, expectations, and values that they carry with them- whether they know it or not. This is true going into a marriage, a summer camp, a new job, or even something as simple as a group project for school. The question I began to ask was, “How can you accommodate the different values and expectations before a diverging trait breaks lose?” and, “How can you have a plan for when disagreement arises?” The answer is by implementing a team charter.

What is a team charter? A team charter is developed in a group setting to clarify the teams direction while establishing boundaries, it is used to encourage a common understanding and shared voice among all group members.

I recently had the opportunity to practice a team charter in a unique setting with nine 9-11 year old girls in my cabin at girl scout camp. This charter was developed by the girls in my cabin on how we planned to take care of cabin, how we were going to treat each other, and how we were going to treat ourselves. To make sure that all of their voices were heard without making these preteens uncomfortable, I opted to use an affinity diagram with them. We took a few minutes to make three affinity diagrams (one at a time), after this we collaborated, laughed, and successfully agreed on our game plan.

Affinity — One of the older girls working on her sticky notes. This one puts lots of thought and effort into her ideas. It was fun to watch her become so invested in the cabin.

affinity 4 — One of the girls thinking about the ideas and helping everyone to brainstorm categories.

affinity 2 — The girls working together to group their ideas.

affinity 3 — Finally some rearranging and getting close to the end.

Sadly, I don’t have an after picture of what we came up with, I was a little too excited that the idea even came together in the first place (In my time as a counselor I have learned that you never know what the middle school girls are going to bring). However, the game plan we formed was visible all week long and in several instances I noticed the girls taking a look at it, holding one another accountable to it, and sometimes asking for buy in to add a few more items to our plan. All in all it was a great week, and I was thrilled once again with the malleability of lean.

The Sixth “S”

Published December 2, 2016

By Ruth Archer

We are pleased to present this guest blog post by Pete Baril, Health and Safety Manager at Michigan Technological University

Sort, Set in Order, Shine, Standardize, Sustain. We know it like the back of our hand. The 5S process is an excellent Lean tool for decluttering, organizing, and improving efficiency, but it can also be part of the foundation for another very important S, Safety.

We’ve all been there, either at home or at work, fumbling around in a cluttered mess trying to get something done. We trip, grab the wrong tool, or spill something; a virtual gauntlet of hazards placed before us simply due to a poorly maintained workspace. Poor housekeeping not only detracts from efficiency and progress, it’s also a safety problem.

Housekeeping is central to a safe and well-run workspace. In a previous life I was a health inspector, charged with evaluating restaurants on food safety and sanitation. I could tell within five minutes of entering a facility whether or not it was going to be a good day or a bad day, simply based on the organization and housekeeping of the operation. Currently, my professional focus is on safety, and when I evaluate a workspace the results are no different; poor organization and housekeeping almost always equal safety violations and unsafe work practices.

Keeping up with safety requirements can be daunting, and when operating in a poorly kept space, the problem is compounded. Give yourself a chance by practicing the 5S process throughout your workspace. Improved housekeeping can do wonders for your efficiency, not to mention your stress levels. An organized space promotes safety by providing clear workspaces free of trip hazards and poorly stored items. Good housekeeping also prevents us from having to use the wrong tool for the job, as the right one is no longer “lost.” In addition to the many other safety benefits of an organized space, good housekeeping practices demonstrate a level of control over the process that brings with it efficiency, pride, and an improved outlook on the task at hand. All this from something as basic as housekeeping.

In closing, please keep in mind, as you strive to become lean, also strive to improve safety. Your co-workers, clients, and family will appreciate it.

Error Proofing

Published September 1, 2016

By Ruth Archer

We are pleased to present this guest blog post by Heather Dunne, Digital Services Specialist for University Marketing and Communications at Michigan Technological University.

One of the common tools in Lean and continuous improvement is error proofing, or poka-yoke. Poka-yoke is a Japanese term that was developed and classified by Shigeo Shingo; that helps someone avoid (yokeru) mistakes (poka).

The concept is simple: Create countermeasures that guard against and prevent errors and mistakes from occurring in a process. If mistakes are avoided, the product quality is high, the customer is happy, and money is saved. Workers, engineers, and managers all must work together to write procedures and design devices to prevent errors from occurring at their source. Errors made within any process can lead to problems, including multiple wastes such as defects, overproduction, waiting, not utilizing people, transportation, inventory, motion, and excess processing.

Error proofing is implemented to prevent human error, but human error cannot be accepted as the cause of an error. The blame game does not apply. Humans make mistakes typically because there is a flaw in the process, itself. There are standard steps that can be taken when error proofing a process. First, take a first-hand look at the process, walking the gemba. Secondly, learn exactly where the error occurred. Then, conduct some problem solving analysis to uncover the root cause. Finally, develop countermeasures to prevent that error from happening again.

Some examples of real-world poka-yokes are the sensor in the gas nozzle that clicks when your tank is full, the ice maker in your freezer shutting off when the bucket if full, and your washing machine stopping when it is out of balance.

Michigan Tech’s Housing and Residential Life developed some poka-yokes for summer conferences:

A reference visual for staff who are setting up linens for a room. It lists exactly what linens are needed and shows how they should be placed on the bed. This saves staff time when gathering linens to distribute and reduces error in forgetting to place an item in the room.
Signage informing guests about areas they have access to and areas they do not. Limiting access to certain floors used the ERA principle–Eliminate Replacement Alternatives. If the task that is creating the error is eliminated, then the error will disappear too.
A kanban board for management of the many groups that stay as guests. By arranging items, information, and people according to a sequence, they developed a good mistake proofing solution.

What are some ways you can apply this simple lean concept in your area?

Feel Good with Lean

Published June 3, 2016

By Ruth Archer

We are pleased to present this guest blog post by Lisa Hitch, Business Manager and Technical Communications Specialist, Department of Electrical and Computer Engineering at Michigan Technological University.

Our internal “Reward System” is a collection of brain structures that regulate our behavior by making us feel good when we achieve a goal. Everything necessary for the survival of our species–eating, mating, sleeping, and physical perseverance–is rewarded by a neurochemical called dopamine that makes us feel good. And the drive to feel good wins out over avoiding pain in most cases.

The problem is that we have evolved to the point that we are able to survive without our internal reward system. For example, we can just stop by a fast food drive-through on our way home from work to get our dinner–no big victory there. An inactive internal reward system can cause minor side effects such as procrastination, lack of organization, and missed deadlines. Moreover, low dopamine levels can also lead to serious conditions such as depression, attention deficits, anxiety, fatigue, poor concentration, and more.

Neuroscientific research shows that higher levels of dopamine might support the internal drive some people have to persevere while lower dopamine levels may cause others to give up. But dopamine can be harnessed and used as a prime motivating force to help us keep pushing and achieving our goals. The use of Lean tools and methods can actually help to create feel-good habits that increase our natural ability to produce dopamine.

Lean tools and methods help us to visualize our work, break tasks down to manageable pieces, stay focused, and–here’s the big one–finish our tasks, which rings the bell for our internal reward system. One such Lean tool is the Personal Kanban.

This image shows the basic concept of a Personal Kanban. Tasks are broken down and categorized into milestones or phases, such as “things to do,” “work in progress,” “waiting,” and “done.” Color-coded sticky notes help to separate the tasks between types of work we need to manage, “administrative,” “communications,” and “HR,” for example. The sticky notes can also be of different shapes and sizes to indicate levels of importance or flow of work. In any case, the movement of the task through the system and into the “done” column reinforces our internal reward system.

There are many other Lean tools and methods that can be found on Michigan Tech’s Continuous Improvement website. I encourage you to check them out and start rewarding yourself today!

Sources:

https://www.psychologytoday.com/blog/the-athletes-way/201112/the-neuroscience-perseverance

http://mentalhealthdaily.com/2015/04/02/low-dopamine-levels-symptoms-adverse-reactions

A Lean Future Is Wonderful!

Published May 4, 2016

By Ruth Archer

We are pleased to present this guest blog post by Laurie Stark, Department Coordinator for the Van Pelt & Opie Library at Michigan Technological University.

While I was an intern at Honda I worked on several major projects within their Business Administration unit, including one that involved their key management process for the entire plant. Their current key management process was not working very well. Keys were given out and never returned, they were not sure how many types of keys they used throughout the plant, their key box looked like a junk drawer, and if someone asked for a key, they might not have it on hand!

I was asked to help solve this problem during my time as an intern. I was told that I would be taught all of the tools that would help me do so: root cause analysis (fish bone diagrams), going to the “spot,” gathering metrics (pictures and data), developing and prioritizing countermeasures, and creating activity plans. Using these tools, I developed a standard process for key management, created a new form, reorganized the keys, and mapped out how many keys were used in the plant. These countermeasures immediately helped solve most of the problems.

Almost ten years later, I started working at Michigan Tech and was asked if I wanted to get involved with the Lean movement on campus. I started going to Lean Facilitator training this past fall and after the first two sessions, I had a lightbulb moment! I’ve seen this before…Honda does Lean?!? How come they never talked about it?

During the four months I worked there, I did not hear the word Lean once, yet now that I look back, I can find countless instances where Lean was used every day. Lean is their everyday way of solving problems. Most employees who work there probably don’t know or realize that they are using Lean tools to solve their problems and improve their processes. It is so embedded into their culture, it has just become the way they do business.

Michigan Tech is on a Lean journey right now, and I have seen a glimpse of the destination–it is wonderful! At Honda, I saw employees who were very productive and engaged in their work. Employees were not fearful to share their ideas on any matter, in fact, they were encouraged to do so! If there was a problem somewhere, everyone went to the “spot” to help problem solve, they were encouraged to submit new ideas to their supervisors and HR reps and I got the sense that people truly enjoyed working there. I would love to see the day that Michigan Tech reaches this same destination.

What can we do in our daily work to get there too?

The Road to Lean Success

Published February 5, 2016

By Ruth Archer

We are pleased to present this guest blog post by Mark Randell, Director of Rehabilitation and Sports Medicine at UPHS Portage.

Yes, we tried Lean. Mark Randell

I was fortunate to start my Lean journey and see success first hand with very little knowledge of Lean principles. We solved an inventory management problem at my work using visual management tools and Kanban cards. This small event saved us a ton of time and frustration. We no longer run out of patient supplies or overstock our supply closets. The pivotal event for me was participating in a week long kaizen at Pettibone. The thing that amazed me was the entire company was involved in the event and the organization made the changes suggested by the team the following Monday. I’ve sat in numerous meetings over the years talking about what we’re going to do and not really accomplishing anything. The Lean-thinking folks at Pettibone implemented improvements on Monday!

I started this blog post with my early success because it didn’t take long before I ran into a ton of fun wreckers. The comments I heard were:

Lean has a life cycle.
We tried Lean many years ago; it didn’t really work.
This is another fad.
It didn’t work at Toyota–look at their recent recalls.

If I would not have seen the early success of Lean/continuous improvement and met my coaches, Ruth Archer and Jim Manley, I would have focused my efforts back to return on investment and efficiency training. The question is, then, why does Lean/continuous improvement fail?

Jim Manley, a former executive at GM, believes they struggled at GM because they didn’t change the organizational culture to lean thinking. Art Byrne, in his book The Lean Turnaround, did not appear to be satisfied with the Lean implementation at IBM because IBM did not change the culture. Many of the MBA programs across the country were built on GM and IBM business principles and focused on return on investments and productivity. I believe the only way a company can successfully implement Lean is by changing the culture to Lean thinking. Lean is about changing the process by creating Lean thinkers, using Lean tools, and following Lean principles. If your goal is to decrease expenses by using Lean tools you will fail.

The Perfect Cup of Joe

Published January 14, 2016

By Ruth Archer

We are pleased to present this guest blog post by Annelise Doll, Digital Initiatives Librarian at the Van Pelt & Opie Library at Michigan Technological University.

In the fall of 2015, I began training to become a Lean facilitator here on campus and am always excited to apply the many tools and tips I learn in these sessions to my work in the library. This not only improves my work, but also is great practice for when I become a facilitator. Sometimes it takes a new perspective from our discussions to see how I could use a particular tool, but Lean philosophy can be adapted to so many environments that it never takes long to understand how it can be useful. Standardized work, however, escaped me. When I was introduced to the concept, I could see the value right away: improvements in the quality of products, ease of training new people, and the creation of a safer work environment, to name a few. Even so, I struggled with where I could use this concept in my own work. I didn’t have to wait long for an opportunity though, and it came in the form of a coffee maker!

In an effort to increase cleanliness, the library recently implemented a system that recognizes individuals for cleaning the staff lounge. I’m known for regularly deep-cleaning our large bunn coffee maker, and now there are a few more people who’d like to help. Unfortunately, the task requires a few techniques and special pieces of equipment, so when I’m not in the office to assist it can be a difficult task to complete. Standardizing this work by creating a job element sheet certainly seems like the perfect solution to this issue!

I formatted the job element sheet based on the one used by Catering Services for, coincidentally, making coffee. After picking out the steps involved and taking photos, I realized it would be easy enough to also create a sheet for how to brew a pot of coffee. Maybe it’s my love of the perfect cup of joe, the intimidating nature of a commercial coffee maker, or the fact that it can be difficult for many people to remember how much coffee to use, but for whatever reason I’m also the one who usually makes coffee for staff events. For being such a simple process, I know from experience that there are an outstanding number of ways it can go wrong! I tried my best to draw on this knowledge to help others avoid mistakes like pouring water into the machine without a pot underneath or forgetting to turn the burner off.

I’ve placed the sheets next to the coffee maker in the lounge and will ask for feedback from others in the library who are willing to test them out. I hope that the clarity and sequence of the steps can be improved as time goes on, and maybe the experience will inspire others to use a tool like this in their work. In any event, I’m sure I’ll be enjoying some excellent coffee made by my colleagues in the future!

If you think standardizing your work by creating a similar tool would be useful for you, please share your idea in the comments!

Satisfying Internal Customers: It’s Still Important

Published October 15, 2015

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We are pleased to present this guest blog post by Gregg Stocker, a lean advisor for Hess Corporation with over 20 years experience in a variety of disciplines including operations, manufacturing, human resources, quality, and strategic planning.

What everyone in a company does can be reduced to one of two functions: to serve the customer or someone who does.

~W. Edwards Deming

One of the most basic but difficult philosophies to ingrain into the culture of an organization is the internal customer concept. The silo mentality is so common today that it interferes with the ability to focus on the needs of anyone who is in another part of the company. The level of distrust that exists tends to be so high that we feel others will take advantage of us if we focus on making their jobs easier (or that making others look better will in some way jeopardize our own jobs by making us look worse).

I once facilitated a lean project with a technical group in a global organization. When I asked why there were no representatives from the operations team (who directly received the output of the technical group), those in the meeting commented that the people in operations were lazy, did not understand what they needed, and would ask for anything that would make their jobs easier without regard to the effect it had on the technical group. The discussion identified a serious problem in the organization that had to be resolved before the lean initiative had any chance of being successful.

Looking at it Objectively

Since very few jobs deal directly with external customers, it stands to reason that most people only work to serve internal customers. If people are unwilling or unable to satisfy their internal customers, the organization has very little chance of satisfying its external customers on a continuing basis.

If the organization is truly committed to satisfying customers, the people in finance, IT, maintenance, human resources, and many other parts of the organization must develop a clear understanding of how the work they do impacts the external customer by serving internal functions. Without an emphasis on internal customers, these same groups can begin to think that the work they do is an end in itself. Thiscaptured market mentality – believing that others have no choice but to accept the output provided – often leads to process changes that reduce costs for these groups without regard to the effect on internal customers.

Perhaps the best example I’ve seen of a company that clearly understands the importance of internal customers is the inverted pyramid at Nordstrom. The pyramid (shown on the Nordstrom website) depicts the organizational structure with customers at the top and each successive layer supporting the one above it. As shown in the figure, customers are supported by sales and support people who, in turn, are supported by department managers, etc. The objective of the pyramid is to make it very clear that customers are at the top of the company’s priorities and the job of everyone is to support those who directly serve customers.

Achieving an Internal Customer Focus

There are a number of steps to achieve an internal customer focus within an organization. The obvious first step is to assure that the company’s senior leaders believe in its importance and are committed to making it happen. If the company has poor teamwork and/or a number of functionally-focused leaders, there is very little chance that they will understand or be concerned with those in other parts of the organization.

Beyond assuring a level of understanding and commitment from those at the top of the organization, the following steps will help institute an internal customer focus:

Encourage open communication with internal customers and suppliers on how to improve the quality of what is provided to external customers;
Talk with people at all levels to better understand the reasons why a focus on internal customers does not exist. The interviews are best conducted by someone outside of the organization if the level of fear and distrust within the culture will prevent people from openly expressing their thoughts;
Discontinue the practice of promoting people who do not understand the company’s overall system and how the work performed by the teams they lead is used to help others satisfy external customers. Leaders who are generalists tend to accept and practice the internal customer concept more than those who are specialists and focus more on their functions than the company as a whole;
Include internal customer input in feedback systems and hold people accountable for continually improving the products and services they provide internally;
Continually coach team members and lead by example;
Be patient and consistent. Like any change initiative, shifting the culture to increase focus on internal customers can be a long-term process that will be tested over and over again as the change occurs.

I have found that, when facilitated effectively, value stream mapping sessions can be very beneficial in communicating how the output from one function becomes the input for another. It also provides a method for identifying the problems that occur in the hand-offs between internal suppliers and internal customers.

Shifting the culture to one that is focused on satisfying internal, as well as external, customers often results in the identification of deeper cultural issues that need to be addressed before success can be achieved. As these issues are resolved, however, the improvements in teamwork and communication will translate directly to the customer in the form of improved products and/or services.

Category: Guest Post

Looking at it Objectively

Achieving an Internal Customer Focus