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Mind Tools Newsletter 158 - July 20, 2010
Work Smarter!
How efficient is your team? Not really? OK? Very? The good news is that however efficient it is now, there's a good chance that it could be even better!
In our featured article this week, we explore the ideas behind lean manufacturing; and we see how you can apply these to work smarter, even if you're in a service organization that makes nothing tangible at all!
(You'll find very many more ideas on smarter working in our Career Excellence Club - some of which you can see below!)
We also take a look at two important approaches used for making investment decisions - use of Net Present Values and Internal Rates of Return. These approaches help organizations evaluate projects, thereby working smarter at a corporate level. If you're going to be involved in senior level decision-making, you'll need to understand techniques like these!
Enjoy learning about them, and enjoy working smarter!
James Manktelow and Rachel Thompson
MindTools.com - Essential skills for an excellent career!
Featured Resources at Mind Tools
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| Everything you do in your work should add value. Learn how to identify wasteful practices, reduce costs, and work smarter.
All Readers' Skill-Builder |
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| Find out how you can use NPV and IRR to compare investment options, and decide whether or not to go ahead with projects.
All Readers' Skill-Builder |
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... And from the Career Excellence Club
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Programs are groups of related projects. Find out how to structure a program, and learn which activities you should manage at program level.
All Members' Skill-Builder |
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| Informal coaching is a great way of dealing with issues before they get out of control. Find out how to use this type of coaching as part of your management approach.
All Members' Coaching Clinic |
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Are you an efficient learner? Find out about a range of learning strategies, and improve how you process new skills and information.
All Members' Bite-Sized Training™ |
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This book looks at how you can become more successful by being more accountable for your actions. Find out more about it here.
Premium Members' Book Insight |
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| Life - at work and at home - can be much easier when you know your values. Find out how you can define yours.
All Members' Featured Favorite |
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Is your job a good fit with your personality? And are you recruiting people with the right personalities for their jobs? Use this model to find out.
All Members' Skill-Builder |
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| "Disaster Proof Your Career" is a practical book that explores how to manage your career path to stay ahead in the workplace. Learn more about it here.
Premium Members' Book Insight |
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Editors' Choice Article
Lean Manufacturing
Working Smartly and Efficiently
How much waste does your team or organization produce?
For example, do you ever have to wait for someone else to finish a task before you can get on with your own work? Do you have a large inventory of unsold stock? Do you have more workstations that you need? Or do you order materials months in advance of when they are needed?
How about flexibility? If you need to change what you produce, can you quickly update and change your processes?
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Cut waste, increase quality and add value.
©iStockphoto/fotomy |
Waste costs you and your customers money. And if your customers have to pay more because of it, they might go elsewhere. Being competitive also requires a lot of flexibility. You must be able to meet the changing demands of your customers quickly and effectively, and adapt to a rapidly changing business environment.
So, how can you reduce waste and do things in a smarter and more efficient way? And how can you keep up with the changing demands of consumers?
First mentioned in James Womack's 1990 book, "The Machine That Changed the World," lean manufacturing is a theory that can help you to simplify and organize your working environment so that you can reduce waste, and keep your people, equipment, and workspace responsive to what's needed right now.
Tip:
The idea of lean manufacturing is just as applicable to offices and other work environments as it is to manufacturing plants. It's helpful to relate words like "inventory," "customers," and "production" to whatever you're processing - data, documents, knowledge, services, and so on. |
A Brief History of Lean Manufacturing
Henry Ford was one of the first people to develop the ideas behind lean manufacturing. He used the idea of "continuous flow" on the assembly line for his Model T automobile, where he kept production standards extremely tight, so that each stage of the process fitted together with each other stage, perfectly. This resulted in little waste.
But Ford's process wasn't flexible. His assembly lines produced the same thing, again and again, and the process didn't easily allow for any modifications or changes to the end product – a Model T assembly line produced only the Model T. It was also a "push" process, where Ford set the level of production, instead of a "pull" process led by consumer demand. This led to large inventories of unsold automobiles, ultimately resulting in lots of wasted money.
Other manufacturers began to use Ford's ideas, but realized that the inflexibility of his system was a problem. Taiichi Ohno of Toyota then developed the Toyota Production System (TPS), which used Just In Time manufacturing methods to increase efficiency. As Womack reported in his book, Toyota used this process successfully and, as a result, eventually emerged as one the most profitable manufacturing companies in the world. (Despite current issues, Toyota has been one of the world's most admired companies in the decades since Womack's book was published.)
Lean Manufacturing Basics
Lean manufacturing is based on finding efficiencies and removing wasteful steps that don't add value to the end product. There's no need to reduce quality with lean manufacturing – the cuts are a result of finding better, more efficient ways of accomplishing the same tasks.
To find the efficiencies, lean manufacturing adopts a customer-value focus, asking "What is the customer willing to pay for?" Customers want value, and they'll pay only if you can meet their needs. They shouldn't pay for defects, or for the extra cost of having large inventories. In other words, they shouldn't pay for your waste.
Waste is anything that doesn't add value to the end product. In lean manufacturing, there are eight categories of waste that you should monitor:
- Overproduction - Are you producing more than consumers demand?
- Waiting - How much lag time is there between production steps?
- Inventory (work in progress) - Are your supply levels and work in progress inventories too high?
- Transportation - Do you move materials inefficiently?
- Over-processing - Do you work on the product too many times, or otherwise spend unnecessary time on it?
- Motion - Do people and equipment move between tasks efficiently?
- Defects - How much time do you spend finding and fixing production mistakes?
- Workforce - Do you use workers efficiently?
Note:
The first seven sources of waste were originally outlined in the Toyota production system, and were called "muda." Lean manufacturing often adds the eighth "workforce" category. |
Lean manufacturing gives priority to simple, small, and continuous improvement such as changing the placement of a tool, or putting two workstations closer together. As these small improvements are added together, they can lead to a higher level of efficiency throughout the whole system. (Note that this emphasis on small improvements doesn't mean that you cannot make larger improvements if they are required!)
Note:
Although the aim of lean manufacturing is to remove as much waste as possible by continuously refining your processes, you probably won't eliminate waste completely. |
Lean Manufacturing Process
The lean manufacturing process has three key stages:
- Stage 1 – Identify waste
According to the lean manufacturing philosophy, waste always exists, and no matter how good your process is right now, it can always be better. Lean manufacturing relies on this fundamental philosophy of continuous improvement, known as Kaizen.
One of the key tools used to find this waste is a Value Stream Map (VSM). This shows how materials and processes flow through your organization to bring your product or service to the consumer. It looks at how actions and departments are connected, and it highlights the waste. As you analyze the VSM, you'll see the processes that add value and those that don't. You can then create a "future state" VSM that includes as few non-value-adding activities as possible.
- Stage 2 – Analyze the waste, and find the root cause
For each waste you identified in the first stage, figure out what's causing it by using Root Cause Analysis. If a machine is constantly breaking down, you might think the problem is mechanical and decide to purchase a new machine. But Root Cause Analysis could show that the real problem is poorly trained operators who don't use the machine properly. Other effective tools for finding a root cause include brainstorming and Cause and Effect Diagrams.
- Stage 3 – Solve the root cause, and repeat the cycle
Using an appropriate problem-solving process, decide what you must do to fix the issue to create more efficiency.
Tools for Reducing Waste
Once you have identified wastes using the three key stages above, you can then apply this next set of tools to help you reduce waste further:
- Just in Time - This is the core idea of lean manufacturing and is based on the "pull" model. To minimize stock and resources, you only purchase materials, and produce and distribute products when required. You also produce small, continuous batches of products to help production run smoothly and efficiently. By reducing batch size, you can also monitor quality and correct any defects as you go. This reduces the likelihood of quality being poor in future batches.
(In manufacturing, a key way of doing this is to use Kanban, below.)
- Kanban - This is one of the key ways to involve people in the lean manufacturing process. Here, you support the Just In Time model by developing cues in the system to signal that you need to replace, order, or locate something. The focus is on reducing overproduction, so that you have what you need, only when you need it.
- Zero Defects - This system focuses on getting the product right the first time, rather than spending extra time and money fixing poor-quality products. By using the Zero Defects system, you'll reinforce the notion that no defect is acceptable, and encourage people to do things right the first time that they do something.
- Single Minute Exchange of Die (SMED) - This helps you build flexibility into your production. For example, in the automotive industry, it could take days to change a line to produce a different car model. With SMED, the assembly process and machinery are designed to support quick and efficient changeovers. (Here, a "die" is a tool used to shape an object or material.)
- The 5S Philosophy - Lean manufacturing depends on organization. You want your tools, processes, and workplace arrangements to be as simple and as standard as possible. This creates fewer places for things to go wrong, and reduces the inventory of replacement parts that you need to hold. To accomplish a good level of organization, use these principles:
- Seiri (Sort) - Sort items according to their importance of use. Discard items that are not useful.
- Seiton (Set in order) - Arrange items in an organized and meaningful way. For instance, place the tools you use frequently the closest to you.
- Seiso (Shine) - Keep the workplace clean.
- Seiketsu (Standardize) - Establish best-practice rules, and apply them throughout the organization.
- Shitsuke (Sustain) - Train and motivate everyone to follow these practices on a daily basis. This prevents people going back to less efficient methods and systems.
Tip:
These techniques offer proven solutions for fixing waste within your organization. However, remember first to apply the three-stage lean manufacturing process, and to deal with any issues that this raises. |
Key Points:
Lean manufacturing focuses on optimizing your processes and eliminating waste. This helps you cut costs and deliver what the customer wants and is willing to pay for.
With a lean philosophy, you enjoy the benefit of continuous improvement. So, rather than making rapid, irregular changes that are disruptive to the workplace, you make small and sustainable changes that the people who actually work with the processes, equipment, and materials will take forward.
This systematic and simple approach is very effective across all types of industries. What's more, ultimately, a process without waste is much more sustainable.
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Apply This to Your Life
To apply the principles of lean manufacturing to your workplace, ask yourself the following questions:
- Overproduction - Do you provide more data or information than is needed? Do you create reports more often than required for example? Or do you spend unnecessary amounts of time formatting these reports?
- Waiting - Do you spend too much time waiting for information or data from others, before you can do your work? What can you do about this?
- Inventory (work in progress) - Do you have a large stock of materials? Are your supply levels and work-in-process inventory too high?
- Transportation - Do things flow efficiently? Could you combine deliveries, or deliver things more quickly?
- Over-processing - Do you needlessly work on something more than once?
- Motion - How is work passed along in your team? Do people understand what they're required to do at each step? Do people and equipment move between tasks efficiently?
- Defects - How often do you find mistakes? Do you make the same mistakes on a regular basis?
- Workforce - Do you use your time wisely? Do you spend most of your time on activities that add value and are a high priority?
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A Final Note from James
Now you've got some ideas on working smarter, give them a go! You'll never totally eliminate all "waste" from your work processes. But you can cut most of it by following lean manufacturing theories and focusing on small, continuous improvement.
We'll be back in two weeks with a look at persuasion and negotiation skills. If we don't see you in the club before then, have a great fortnight!
Best wishes!
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James Manktelow
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Mind Tools
Essential Skills for an Excellent Career! |
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