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Defining and Creating Customer Value

Published December 17, 2014

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:

What should I be doing?
How should I be doing it?
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:

The customer must be willing to pay for the activity.
The activity must transform the product or service in some way.
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):

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.
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.

Trend Prediction

Published November 7, 2014

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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.

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

Published October 27, 2014

By Megan Ross

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.

Summer is a Perfect Time for Improvements!

Published May 9, 2014

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Classes are over and the snow is melting, which can only mean one thing…Summer! The return of Summer means longer nights, vacations, and opportunities for improvements!

The Office of Continuous Improvement encourages you and your department to engage in small group discussion and talk about continuous improvement opportunities. It doesn’t take much; just a few minutes to exchange ideas and possible improvements for your area. There are plenty of lean facilitators on campus who are ready and willing to help. If you have any questions or would like to schedule an improvement event, please contact us at improvement-l@mtu.edu or call 906-487-3180.

Using Lean When Transitioning Into a New Job

Published February 12, 2014

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This week’s post is a guest post from Heidi Reid, Executive Assistant in Human Resources and campus Lean Facilitator.

It’s always a little stressful when one moves into a new job…

What do you do with all those old files from your predecessor?
Duties and activities your predecessor “did it just because…?”
Jumping into new projects with little training
Organizing your desk for the most efficient work flow
Where do you find the files or information you need?

These are all concerns when taking on a new position. The good news is it doesn’t have to be a scary transition if you start out the right way.

What is the right way?

To try to incorporate Lean/Continuous Improvement aids, techniques, tools, and standards.

How do you get started?

1. Map out your office and its best layout.

Your desk (facing the door if possible)
Computer placement (ensure you have desk space to work)
Your essentials (tape, pens, stapler, etc.)
Is your phone easy to access?
Do you need your phone close to the computer?
Are your files easily accessed?

2. Once you’ve mapped out your space, you can create standards for where things are housed by outlining them or simply use your maps as a guide to audit your desk daily. Example: Are my essentials in the correct place? Do I have anything on my desk that doesn’t belong there? If so, find where it does belong and move it there immediately.

3. Create a standardized work sheet for your daily duties. Even include basic steps, such as: turn on computer, put on name tag, check emails, walk the Gemba and greet staff, attend daily team meeting, etc.

Use this work sheet to prioritize and “map out” your day. List all the duties you need to perform (AKA your “to do” list)– even if you know you won’t get them all done today. Prioritize your list (for example, from A to Z); this will help you when wondering “What should I do next?” Simply follow your priority list until all items are complete, highlighting or striking through as items as they are completed. It feels good to mark tasks as “Complete”! If an item on your list is not complete, add it to your next day’s priority list.

There are many different ways to achieve the same outcome; this is just an example. You can create a system that works for you! Some choose to use what is called a “priority matrix” (from Steven Covey’s Seven Habits of Highly Effective People).

Covey's Prioritization matrix for time management (Image from http://itsunderstood.com/).

Start, Stop, Continue

Published November 4, 2013

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Although not a Lean specific concept, “Start, Stop, Continue” is one way to gain quick feedback on process improvements and rapid experimentation. Typically “Start, Stop, Continue” is done in a group or team environment and involves open discussion. The goal is to take a look at something and determine how it is performing. This could be a process, a strategic vision, or even an individual’s performance (in a one-on-one setting).

Participants are told to write down their ideas on what should be started, what should be stopped, and what should continue.

For example:

Start: utilizing visual controls to reduce errors, holding daily team meetings to increase open communication, or addressing problems that have begun to occur since the last review of a process
Stop: holding meetings that have no clear purpose, doing something because “that’s the way it’s always been,” or not listening to employee’s ideas on how to improve
Continue: ensuring every customer has a positive experience, seeking ways to improve, or coaching teams effectively

After everyone has done some brainstorming on their own, the group can come back together and prioritize action items. This can be done by an affinity diagram or any prioritization method. Overall, the “Start, Stop, Continue” method lends itself to quick discussions that can focus on anything from a company’s strategy, to coaching an individual employee.

Book Review: The Five Dysfunctions of a Team

Published October 8, 2013

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Recently in my Senior Design class the instructor recommended that we all read the book The Five Dysfunctions of a Team by Patrick Lencioni. The book is a business story centered on Kathryn, a new CEO to a failing high-tech company, DecisionTech. Throughout the story Kathryn works her way to the root causes of the executive team’s failures that made me think about lean philosophy. Although the book never specifically refers to lean, many of the principles presented are similar.

Although DecisionTech’s product was great, and there was plenty of money from investors, for some reason the company was failing miserably. For this reason the Board of Directors hires Kathryn to be the new CEO. Kathryn has previous executive experience in the automotive industry (there is a reference to a joint US-Japanese automotive plant in California), and she is older than everybody else on the executive team. For the first two weeks after being hired Kathryn has the previous CEO (who still works for the company) run the business as usual for Kathryn to observe. Kathryn walks around talking to employees at all levels and attends as many staff meetings as possible. When I read this I immediately thought about Gemba Walks and the importance of going to see problems at their physical location.

The book goes on to discuss the five dysfunctions of a team, which are:

Absence of trust (shown by a individuals thinking they are invulnerable)
Fear of conflict (shown by a team creating artificial harmony)
Lack of commitment (shown by ambiguity in team functions)
Avoidance of accountability (shown through holding low team standards)
Inattention to results (shown by individuals focusing on status and their ego more than the team’s goals)

All of the dysfunctions tie in with each other, and although none are explicitly lean they can all be related to some aspect of lean philosophy. “Respect for people” is one of the cornerstones of lean that encompasses all five of the dysfunctions. For instance, a team that respects its own people would have no problem with healthy conflict and problem solving. Kaizen events may have intense discussions during root cause analysis or four-step problem solving, but as long as the discussion is “hard on the process, easy on the people” a team can show each other respect.

Overall the book was a quick read that provides a new perspective on teamwork. Patrick Lencioni does not specifically call out any lean principles or tools, but many of the same thought processes are evident throughout the storyline. Finally, the storytelling method focusing on Kathryn keeps the book fast-paced and lively resulting in an enjoyable reading experience.

Poke-Yoke (Mistake Proofing)

Published August 20, 2013

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The concept of Poka-Yoke was first introduced by Dr. Shigeo Shingo in the 1960’s. The term “poka-yoke” literally means avoiding (yokeru) mistakes (poka). Although typically applied to the manufacturing industry, poka-yoke concepts can also be applied to the office environment, hospitals, service-sector industries, and any process where there is the potential for a defect to reach the customer.

Poka-yoke distinguishes between defects and mistakes. A defect is an error in a process that continues through until it reaches the customer. A mistake on the other hand, can be detected and corrected immediately. Poka-yoke seeks to eliminate defects at the source, when mistakes are made.

There are three types of poka-yoke that are used to detect errors:

Contact: Identifies a defect through a physical attribute such as size, shape, color, or weight
Fixed-value: Ensures that a certain number of movements are made during the process
Motion-step: Determines whether or not only prescribed steps are completed

Additionally there are two types of poka-yoke that are used to prevent errors:

Warning: Alerts the operator before a mistake is made
Control: Prevents a mistake from being made

Examples of poka-yoke can be found anywhere you look. For instance, the cords between your computer and your monitor, keyboard, mouse, and outlet all have different plugs. This is an example of the contact method. Only the correct cord can be plugged in to the correct outlet.

http://siliconcoach.com/support/wp-content/uploads/2008/07/back_of_computer_web.jpg

An example of the fixed-value method would be assembling a part with some nuts and bolts. With the fixed-value method, the exact number of nuts and bolts required is available to the worker. If anything is left over after the worker has assembled the part, then right away a mistake is detected because somewhere a bolt is not being used on the part.

A final example that combines the contact and warning method is the clearance bar that is seen above any drive-thru. If a vehicle is too tall, then contact will be made with the bar warning the driver that their vehicle will not fit through the drive-thru.

Cap & Gown Shuffle: Going to the Gemba

Published June 13, 2013

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Last week I was involved in a kaizen event that was organized to counteract problems within the ordering and distribution of caps and gowns for graduation. Issues the team worked through were the logistics of the sporadic influx of inventory (40-60 large boxes that flood the inventory space twice per year) and the long lines customers dread to obtain their cap and gown. One important concept I learned from this kaizen was the importance of going to the gemba. To fully understand the issues and problems, we found ourselves taking many trips to the gemba – the place where the work happens.

As noted by Wikipedia, problems are visible at the gemba, and the best improvement ideas will come from going to the gemba. For this kaizen, we spent some time in the inventory room of the Michigan Tech Campus Bookstore to take a look at the current situation. The picture below shows discussion during one of our gemba visits (note the large boxes that don’t even fit on the shelf). Each time we went to the inventory room we were better able to understand the limitations of the space and brainstorm countermeasures.

“Gemba walks” are not just for kaizen events. Ideally they should be done as often as possible to provide supervisors and management with a true picture of what workers are experiencing on a day-to-day basis. Mark Graban, a lean consultant with a focus on healthcare, recently wrote about an article by Delos Cosgrove, President and CEO of Cleveland Clinic, and his experience with going to the gemba. These walks are not only important in industries or businesses with physical inventory such as manufacturing, merchandising, or healthcare. In a knowledge-based industry it is still effective to go to the place where work is being done on a regular (though unscheduled) basis to “go see, ask why, [and] show respect.”

MTU Campus Bookstore Back Room — Going to the Gemba

Making a Good Problem Statement – Tech Fit Process Improvement

Published April 25, 2013

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Taking the time to understand the current state of a problem can be described as the most critical part for improvement. Many Lean practitioners will recommend at least 50% of the time invested in making an improvement be in the Plan phase of the Plan-Do-Check-Adjust cycle. This is where you will study the problem where it occurs (the gemba) and collect baseline metrics, facts, and observations to answer the question “What is currently happening?” From there a problem statement can be formulated to focus the improvement effort.

A good problem statement should sound something like this: “A is happening, causing X, Y, and Z.” A is the problem and X, Y, and Z are waste.

A kaizen event is currently implementing countermeasures to respond to the problems within the Tech Fit Benefit Request Process. Metrics were collected for a few weeks prior to the team getting together. Vendors and customers (stakeholders) were involved to understand key issues with the process. As a result, a problem statement was formulated:

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