Invisible Waste in Organizations –See the unseen blockages in Lean

Transformation

Presented at:Lean Management Congress 2009

Lean Transformation – Blockages

But where is the

obstacle?

Haven’t we faced?

Thought over it???

What went wrong with Lean Transformation

Million $ Question?

During Lean Implementation

1. Overproduction2. Waiting3. Transportation4. Over Processing5. Inventory6. Motion7. Defects 8. Unused Employee Creativity

The 7+1 Waste

But these are visible!

Over the Carpet but what is there Under

the Carpet?

What we know is far less than what we don’t• Take a closer look at your factory

• RETHINK

The devil in the clown

Invisible Waste

• You may pump in extra fertilizers or chemicals to make the plants grow.

• But in turn it makes the soil infertile and unproductive.

• It takes away the natural fertility of the ground.

• The factor for infertility – Invisible Waste• They are found in either Value Creation or

Value Stream.

Value Creation Value Stream • The invisible waste in Value Creation are of

long term nature and are larger in impact. • They need huge changes in mindset in order to

be eradicated totally. • The invisible waste in Value Stream is in the

process and the systemic steps. • They can be brought out by severe observation

and data analysis.

Invisible Waste

• Policy & Procedures• Wrong Culture• Wrong Strategy• Architecture (Design) of the Organization• Wrong Measurement• Entrenched Mindset (Paradigm)• Communication • Knowledge Management

Policy & Procedures

• Policy & Procedures – not revised for years• Lengthy and NVA procedure are discouraging• Policy not in place – people not in place• Decision Making is fuzzy if unclear policy• For ex. Policy to buy Machine and Hardware

are same• Increase the supplier base over cost concerns,

however actually you are buying variations

Do not generalize P&P’s!

Culture

• The set of shared attitudes, values, goals, and practices that characterizes an institution, organization or group – unique to it

• People visit Toyota – learn the tools employed• Toyota knows its culture cannot be copied• It is cultivated over a period of time• If not guided, then also there’ll be a culture• Build a Culture of Continual Improvement

towards perfection

Culture makes you Unique!!

Culture .. How to Identify

• What are we dealing with? Urgent – Important• How do we treat an Individual in every Transaction?• Trust Based Relationship (employer-employee)• Do we chat more about the person who is not there?• How is the Top Management?• Rituals, customs, anecdotes, success stories, artifacts• How is the furniture arranged, quotes on walls?• Beaurocratic, democratic, autocratic, open-door…..

Strategy

• A strategy is a plan of action designed to achieve a particular goal (linked to Vision).

• Strategy deals with the how part rather than the what.

• Strategy gives the RIGHT Direction• You must know where not to delve• Vision will not help unless strategy is right• Growth strategy• Blue Ocean Strategy

Strategize for the Market!!

Architecture of the Organization

• Bigger Organization, higher is departmentalization• Micro Management – makes orgn. Sluggish • Every Link in the Pyramid is Useful• However, None faces the Customer • If architecture not right, you’re Structured to fail

Management by push? Throw over the wall?

Common situation

How should it be!!

From the functional perspective to the flow perspective

From Departments to Cross Functional Team

Flow-oriented co-operation

everything flows

‘Unification’ !!!!

-Breaking barriers,-Reducing hand-offs,-Reducing blur's!

Measurement

• Incentive should be based upon Value Addition

• Production – up on all the cylinders, full throttle

• Because higher figures, meant higher incentive• All produced is then stored – NVA• If Performance Management System is based

on these figures• Lose a good supervisor, have a bad manager

Measure it to Improve it!!

• Accounting – Rework is not counted• Month End Syndrome, Quarterly results – Fire

Fighting • Budget Driven – measuring the other end• Still Measuring the Bottom Line as Sales USE A HOLISTIC APPROACH • Balanced Score Card – Norton & Kaplan• Throughput Time is useful measure for all

Entrenched Paradigm

• The significant problem cannot be solved from the same level of thinking that created it.

• Think of a Paradigm Shift as a change from one way of thinking to another.

• It's a revolution, a transformation, a sort of metamorphosis.

• It just does not happen, but rather it is driven by agents of change.

• Shift is not for others, it’s for you to begin with

GET DO

SEE

Principles

Shift in Paradigm

Improving Process

Behavior Change

Results

Needs

Customer Satisfaction Productivity Profit

Transformation Model

Communication

• High-Mesh communication – but Messed up

Internet Blackberry

Mobiles Media

“Talk” is not Communication!

• Sending Mails everyday – but no connection• No morning wishes - barrier to communication• Hiding the problems• Pink Elephant – Everyone knows but no one

talks of it• Open Door Policy

Knowledge Management

• Organizational Learning• Knowledge Transfer to next generation of

employees• Make it simple• Excellent Knowledge Mgmt. – reduced

chances of repeated errors• Teach and Train others swiftly• New Employee Induction becomes easy• Operations become operator’s knowledge

independent

They are interlinked!

Lean

Transformation

Vedzen Institute

8, Friends Colony, Sind Hindu Society,

Lulla Nagar, Pune9822026727

yiv@vedzen.com