American Lean Weekday: Leadership | Lean Culture & Intrapreneurship | Lean Methods | Industry 4.0 | Case Studies

There are four simple steps I have road-tested over the years that will make your Lean transformation easier and successful! Follow these for success.

1. Vision- Develop your unique Lean Game Plan
2. Employee training camps- Train employees on Lean topics
3. Execute the Lean Game Plan- Conduct Rapid Improvement Events (RIE's)
4. Half time adjustments- measure and adjust

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I have spent a career working with American companies. All kinds of companies. Large ones, small ones, family-owned companies. There isn't much I haven't seen manufactured. I've worked with government agencies to help them as well.

In some small way I have helped each company improve and become more competitive. I know Lean helps companies increase competitiveness and retain American jobs.

Needless to say, I've loved every minute of it. I love America and I hope you do too! Show how much you love America and make the time to VOTE!

All the best,

Tom

Some great things are coming out of the COVID-19 pandemic. One is the digitization of many businesses that need to evolve. This requires leaders to evolve and adapt as well. Operating in large silos and departments is hard to accomplish in a digital environment. Here is what future leadership looks like.

1. Manage across a value stream

Having leaders within departments focus on their piece of the business will be harder to do when customers want goods and services quicker and delivered with increased convenience. Imagine a business with 10 different departments and a product has to journey through each department before going to the customer.

Problems arise in the product's delivery because of two of the departments. Who is accountable to fix the problems? The department leaders? What if they take weeks to look into the issues? The customer still isn’t getting what they want.

A value stream is the processes required to bring about a good or service to a customer. This can be an internal or external customer. When leaders have control of an entire value stream, they can drive change quickly to meet the needs of their customers.

2. More diverse and inclusive

A study by MIT shared that companies with a diversity of gender, race, and other factors had increased revenue of 41%. Having this mix of experience and perspectives allows companies to be more creative, conduct better problem solving, and post higher returns than companies that all look alike.

Think of a baseball team that consists of only catchers. Sure they can share equipment, tell great stories amongst each other and, relate to each other. They probably won’t be as successful as companies with a mix of skills.

3. Intrapreneurial focused

I say this a lot in my blogs and podcasts. Identifying and developing intrapreneurs is important if your company is going to be at the forefront of developing new products and services. Especially today, what used to work great, probably won’t cut it.

Good ideas won’t come from only your C-suite or maybe not your next layer down. At a certain point, people focus on protection not being creative. Look everywhere for people with great ideas and put an infrastructure in place to support internal intrapreneurs.

4. Create supportive environments

Leadership is more than a title. Do people follow you because they have to or because you’ve developed a supportive, trusting, and rewarding environment? Have you developed a culture where employees want to be a part of and thrive?

Great leaders do three things: Cast a vision, hire the absolute best talent they can, and make sure everyone has the drive and support to succeed. Make yourself available to those you lead as a servant leader. This is what future leadership looks like.

As always, it is an honor to serve you, and I hope that you and your company are getting better every day!

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Lean accounting may not sound very exciting, but this podcast episode with Jerry Solomon brings all kinds of energy and excitement!

Jerry shares how he moved from an accounting role into VP of Operations roles and shares the struggles of getting business performance information that employees can use to make improvements.

These are some key points taken from my interview with Lean accounting expert Jerry Solomon.

1.  I was asked to move from the COO position to running operations. What a difference. I went from being a provider of information to a consumer and saw some big problems.
2.  "We felt people in offices working on spreadsheets know better. It doesn't work that way! I saw how excited people can get, how they want to help us solve problems"
3.  "People want to know the score an Lean accounting helps."
4. "We did everything on our Lean journey, 5, setup reduction, then you realize you need to take it seriously. We implemented four value streams from beginning to end. Changed financial reporting."
5. "We empowered the people to run the business, put visuals in place."
6. "We tripled the growth rate in that part of the business."

 To hear Jerry’s interview please join us on the podcast at Americanlean.com episode fifty-two.

As always, it is an honor to serve you and I hope that you and your company are getting better every day!

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A digital twin allows companies to develop a digital version of any scenario they might face in the physical world. Businesses can research, create, test, simulate, and prepare for any scenario they think occurs. Digital twins can optimize your operations.

There are many practical uses for digital twins. Digital twins can model and optimize any part of a business. Here are a few use areas.

1.    When designing buildings

Digital twins allow engineers and architects to develop models based on the location of the building. They can simulate the movement of the building as it sinks into the ground. Modeling the building and how it will change over time- think sinking further into the ground- allows for identifying potential threats and vulnerabilities before they occur. 

This saves money and potential catastrophes. I bet the Leaning Tower of Pisa would have liked this technology.

I remember when I was an engineering student at the University of Cincinnati, and they built a new library while I was there. By the time I graduated, the library was already sinking. The story was, they hadn’t accounted for the weight of the books. I don’t know if this is true, but I’m sure a digital twin would have helped them model that.

2.    Troubleshooting and optimization

These are two areas where digital twins benefit your organization the most. Traditional research and development require vast amounts of data collection and physical resources to check every potential outcome. Instead of using physical resources, a digital twin can simulate the scenarios using data.  

The predictions provided are almost identical and cost much less than using physical resources.

3.    Maintenance optimization

Tesla builds a digital twin of every car model they produce. They use the digital twin to collect data from their cars in service. They collect and share information with cars on the road.

If the digital twin allows Tesla to predict any maintenance issues for their fleet and fix many maintenance items remotely. If they sense a rattle in a door, they can send an update that adjusts the hydraulics of that door.

4.    Agriculture optimization

Plant and food researchers from America have compiled over 30 years of Kiwi farm pollination data to develop digital twins of the farms. The complex digital twins enable scientists to model several factors at once. In this case the modeling of plants and pollinating bees.

To conduct the experiments in real life, testing only six variables, would require more kiwi farms than exist in New Zealand. The interesting results they learned from the model is the optimum number of female flowers is 65%.

The ideal number of bees is 6-8 bees per 1000 plants and diminishes if more bees are used. I don’t know about you, but 1000 plants per 8 bees sound like a lot of work. I guess that’s where the saying busy as a bee comes from. 

It’s clear to see that digital twins can optimize your operations regardless of your industry.

As always, it’s an honor to serve you, and I hope this helps you and your organization get a little better today.

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Is your organization preparing their strategic planning efforts for next year? I’m sure everyone is eager to complete 2020 and move on. Regardless of how your business has changed, one thing that shouldn’t change is your True North. Your True North doesn’t change.

It is the guiding element that your company truly believes in. Your culture develops because of your True North. Your decision making follows your True North. It guides everything in your organization.

If you have outgrown your original True North, then it makes sense to review it. I’m sure some elements will remain regardless of how your company has grown. How you treat employees and customers might remain the same. How you operate your business within your city will probably remain the same.

What might change? If you say the company will deliver year over year increased sales of 20% for the company, that might need to be adjusted. If you have certain shareholder return numbers in your True North, you might need to review those numbers.

If you want to know what framework I use with companies to develop their True North and develop their Strategic Plan for the year, it is called the Lean Game Plan and consists of four simple steps:

1. Define your championship (Vision)- The first step is for leadership to agree upon what the True North is for the organization. This translates into a Lean Management System. Leaders must agree upon a few Key Performance Indicators that measure the performance of the business. 

I had a client whose mantra was to measure what matters. They went from measuring thirty KPI’s to about six. Guess what? They gained much more clarity in their business decision making and they made rapid gains in a short period.

Establish a Lean Game Plan that includes Lean activities scheduled a quarter at a time.

2. Employee training camps- This should go without saying, but I’ve seen many organizations skip this step or try to take shortcuts. It is important to train everyone in the organization on basic lean concepts. You aren’t trying to make them experts but expose them to Lean concepts. This helps provide a background they can rely on when they take part in RIE’s.

3. Follow the Lean Game Plan- Using Value Stream Mapping as your backbone, identify waste in your processes. Focus on removing the waste using Rapid Improvement Events or Kaizen. Schedule the events a quarter at a time and make sure they occur. 

Ensure teams have a report-out after every event. Video the report-out in case members of leadership can’t attend in person. They can watch the recording and provide positive feedback to the participants after the report out. That feedback is a key ingredient in generating employee engagement and culture change.

4. Half time adjustments- Review your RIE library quarterly. After you have been conducting RIE’s for a while, you will develop a library of events that are completed. 

Have a monthly meeting to review the events, formally close events, and ensure you are sustaining the gains. If you are not seeing improvement to your KPI’s after two quarters, don’t be afraid to make changes. Sports teams often make half-time course corrections and you should do the same!

The organizations I have coached over the years that adopt this simple framework have better results compared to organizations that don’t.

As always, it is an honor to serve you, and I hope that you and your company are getting better every day!

In a recent PwC study, 80% of American consumers say that speed, convenience, knowledgeable help, and friendly service are the most important elements of a positive experience. How does your organization measure against those elements? It’s important to realize that your culture drives your customer experience. If you want a better customer experience, work on improving your culture.

This article points out that 59% of customers will quit doing business with a company after repeated unpleasant experiences. Imagine losing 60% of your customers over the next year because of bad customer experiences.

Your culture, now more than ever being driven remotely, is the largest element that will affect your customer experience. How can you support a customer experience-driven culture?

1. Start with Values

Your culture can develop over time. It can change as you grow or enter new markets. It’s who you are and who you want to be.

Values are part of your True North. Values should drive the culture. Values are fixed and are what you reflect on when you need to make decisions. Without a True North, and the values of the company what culture do you think will develop? If there is no guidance, who knows what will emerge. Chances are it won’t focus on the customer experience.

2.  Who you hire is who your customers will meet 

This isn’t just customer service employees. This includes everyone in the organization. Maybe they won’t meet the accounts payable clerk, but if you make hiring decisions as if your customers will meet this person, what do you think happens to your customer experience?  

When everyone in the company is focused on delivering an exceptional customer experience, your organization will blow everyone else away! Customer experience will become a True North when you hire across the company this way.

3. Measure your company culture

Yes, company culture can be measured. While not as exact as measuring output per hour or the number of clicks on a website, there are several aspects you can measure.

NPS or Net Promoter Score is a measure of how willing you are to promote a company. It asks a simple question “On a scale of 1-10 how likely is it you would recommend brand X to a friend?” A rating of 9-10 is a promoter, 7-8 is neutral and < 7 is a detractor.

This is why the first question on many surveys is how likely are you to recommend X to a friend and then it gives you a 1-10 scale. They are collecting their NPS information.

You can conduct an NPS for your company internally to measure your culture. Instead of asking if they would recommend brand X, you might ask, “How likely are you to recommend our company as a great place to work?” 

Realize that if you go to the trouble to ask, make sure you provide honest feedback to your workforce. Be prepared that your culture isn’t where you want it right now. That’s great. At least you know what you can improve upon.

This information helps you realize that your culture drives your customer experience!

As always, it is an honor to serve you, and I hope that you and your company are getting better every day!

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One of the key elements on my American Lean Weekday podcast is the weekly interviews that I conduct with companies on their Lean Journey. These companies are from various industries and are all different sizes. I have interviewed leaders from family-owned businesses to multi-national organizations. These are keynotes from a conversation with MD Engineering.

MD Engineering founded in 1999 and located in Corona, California is a nationally recognized leading producer and distributor of quality machined products providing parts to the military, industrial and commercial manufacturers worldwide. They are a leading supplier of complex machined parts, assemblies, and “buy complete” components to the commercial aerospace, military, and contract manufacturing industries. With a strategic focus on lean manufacturing, they manufacture and assemble tight tolerance and short lead-time projects based on customers’ demands.

These are some key points taken from my interview with the Chief Operations Officer Ryan Cortes.

1.  MD began its Lean journey in 2009. They have been aggressively pursuing change for eleven years".
2.  "One of the things that we learned early on was the principles that Lean talks about were true! We ended the year with great sales dollars but had no cash in the bank. It was all tied up in inventory!"
3.  "If you have a dollar in cash you can spend it if you have a dollar tied up in inventory- you can't do anything with it. Cash is king in a small business."
4. "Lean absolutely applies in a machine shop setting. I can't think of a company that Lean is more applicable in than a machine shop."
5. I would get some training as you begin your Lean journey. I don't think the theory sinks in at first for the average person.
6. I wasn't optimistic about what Lean could do for us. I was trying to appease a customer. But as I learned more about it and MD Engineering embraced it, there is no doubt we would not have enjoyed the growth that we have had without a Lean transformation.

 To hear Ryan’s interview please join us on the podcast at Americanlean.com episode forty-seven.

As always, it is an honor to serve you and I hope that you and your company are getting better every day!

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I’m always searching for articles to gather information to share with you regarding Industry 4.0 and other topics. Two weeks ago I mentioned how Porsche and Bugatti are 3D printing brake calipers and replacement parts for their cars. This week, I want to share how Mercedes Benz is taking a holistic approach to Industry 4.0 technologies to integrate all their plants together and the savings they expect.

It is called MO360 (Mercedes Benz Car Operations) 360. MO360 is a suite of software applications that gathers and integrates real-time information to provide information to operators across a simple user interface. About 30 facilities worldwide are taking advantage of parts of the software.

What does Mercedes hope to gain?

They use cross-functional teams with production and IT support to develop the software ecosystem. According to Daimler CIO- Jan Brecht- “Organizational boundaries no longer have a role to play. All teams systematically utilize continuous feedback from production to optimize and enhance digital tools.”

The sprints are two weeks long and focus on adding perceptible user benefits. According to Brecht “For software engineering in the field of production, that is an absolute record.”

Mercedes just opened a brand new factory in Sindelfingen, Germany. It is referred to as factory 56 and will the testbed for everything Mercedes does regarding MO360.

The factory is designed with 5G mobile technology built-in so that all sensors, equipment, and systems can communicate with each other. The system knows by the inch the location of each vehicle in the factory.

Operators use a digital information system that gives them the information they need to work on the vehicle in front of them. All inspection forms are completed digitally. It’s estimated this will save 10M tons of paper annually!

Mercedes is using a system called Quality Live inside of MO360 that gives employees push-button real-time quality status of any vehicle. Any non-conformances are taken care of before the car reaches the end of the assembly line.

MO360 monitors quality issues and using Artificial Intelligence, offers process improvements based upon analyzing the quality data.

The MO360 system provides up to the minute KPIs (Key Performance Indicators) so production leaders can react to what is happening on the production line. Adjustments to schedules, sequences, etc. are shared instantly with suppliers.

When all plants throughout the world connect to MO360, the system will monitor and learn from maintenance occurrences. The system will offer predictive maintenance and plan the maintenance outage for an optimal time.

As an example, as the system learns that a motor driving a conveyor belt fails after 50,000 hours, it can schedule replacements throughout the system and keep the correct number of motors on hand for replacement. This helps save MRO spend on this huge organization.

I hope enjoyed learning how Mercedes Benz is taking a holistic approach to Industry 4.0! I know I like bringing you this information.

As always, it’s an honor to serve you, and I hope this helps you and your organization get a little better today.

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