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Knowledge ManagementKnowledge Management

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TPS, LEAN, Six SigmaTPS, LEAN, Six Sigma

Common, Conflict or Complementary?Common, Conflict or Complementary?

Jon Hayward-WrightJon Hayward-WrightKMLFKMLF

30 April 201430 April 2014

TPS v LEAN

TPSTPS – Toyota Production System, a collection of tools, methods, – Toyota Production System, a collection of tools, methods, brought together into a single framework / system.brought together into a single framework / system.

TPS did NOT invent many of these items, the “magic” was TPS did NOT invent many of these items, the “magic” was bring them together and integrating them into one system.bring them together and integrating them into one system.

With 5 key objectives:-With 5 key objectives:-Specify what creates value from the Specify what creates value from the customerscustomers perspective perspective Identify all the steps along the Identify all the steps along the process chain process chain Make those processes Make those processes flowflow Make only what is Make only what is pulledpulled by the customer by the customer Strive for perfection by continually Strive for perfection by continually removing wastes removing wastes

LEANLEAN – a term that was “invented” by – a term that was “invented” by Womack, Jones & Roos in Womack, Jones & Roos in their book “their book “The Machine That Changed the World” that explained in The Machine That Changed the World” that explained in general terms the TPS philosophy's .general terms the TPS philosophy's .

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LEAN v Six SigmaLEAN v Six Sigma

LEANLEAN --- (TPS) --- (TPS) Removes WasteRemoves Waste Reduces Cycle Time (increased Reduces Cycle Time (increased

speed)speed) Promotes Process re-design to Promotes Process re-design to

remove non-value adding steps.remove non-value adding steps. Fixes connections between Fixes connections between

process steps.process steps. Focuses on the customer.Focuses on the customer.

Six Sigma --- (SPC)Six Sigma --- (SPC) Reduces variations Reduces variations

(lifts repeatability)(lifts repeatability) Improves QualityImproves Quality Reduces “compounding” Reduces “compounding”

errors.errors. Seeks to optimise process Seeks to optimise process

steps.steps. Focuses on the customer.Focuses on the customer.

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SPEED + ACCURACY =

(BETTER Delivery & Quality)+(SATISFIED Employees & Customers)

How long have they been around?How long have they been around?

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Six Sigma (SPC)

Use of LEAN (TPS)

ActivityActivityPart 1Write on separate POST-ITS any similarities OR differences you believe exist between :-

LEAN/Six Sigma AND Knowledge Management (KM)

Part 2Read the following question and write your answer on ONE POST-IT.

“What action/change is impossible today, which if by some magical means you could achieve, would totally change the world of KM forever!”

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““The basic economic resource is no longer capital, The basic economic resource is no longer capital, nor natural resources, nor labor. nor natural resources, nor labor.

It is and will be knowledge.”It is and will be knowledge.”

Peter DruckerPeter Drucker

““What Drucker failed to say was…..it has to be the What Drucker failed to say was…..it has to be the

RIGHTRIGHT knowledge! knowledge!

So what does the “?” really represent?So what does the “?” really represent?

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Non Value Adding Value Adding ? Value Creating ?

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Exponential Growth in “Knowledge”?Exponential Growth in “Knowledge”? By the year 2020 “knowledge” will double every 73 days or

less…………….. but what is the RIGHT knowledge?

World Wide Web is doubling every 90 days……………. With who…….customers?......partners? Or noise?

Moore s Law - The power of silicon technology doubles every 18 months. Faster……..more “speed” but what about the quality?

Metcalfe s Law - The value to those connected to a network increases by n square. Does it?...........only if the information is “processed”

into “knowledge” which supports / promotes a “change” in something?

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What is Knowledge Management?What is Knowledge Management?

The systematic process of creating, maintaining and nurturing an organization to make the best use of the available knowledge to create business value and generate competitive advantage.

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The belief is Knowledge WorkersThe belief is Knowledge Workerswill :-will :-

Dominant group of workers in the 21Dominant group of workers in the 21stst century. century. Will we need that many?......what do the rest do?Will we need that many?......what do the rest do?

Specialists with job-specific skills.Specialists with job-specific skills. Require multiple, continuous learning opportunities to Require multiple, continuous learning opportunities to

maintain their specialized knowledge?......from where?maintain their specialized knowledge?......from where?

Have significant formal education or formal training.Have significant formal education or formal training. From where? Who will pay…? In what?From where? Who will pay…? In what?

Are self-directed learners & workersAre self-directed learners & workers Focused on what?........more “knowledge” or noise?Focused on what?........more “knowledge” or noise?

What does it take to get these What does it take to get these working?working?

KMKM 20% Technology20% Technology 80% Cultural 80% Cultural

Behaviour of leadersBehaviour of leaders What type of What type of

“learnings” are valued“learnings” are valued Organisational structureOrganisational structure How are mistakes How are mistakes

handledhandled Reward & PunishmentReward & Punishment What “value” on info. What “value” on info.

sharingsharing

LEAN / Six SigmaLEAN / Six Sigma 20% “Technology”20% “Technology” 80% Cultural80% Cultural

Support from “leaders”Support from “leaders” Accepting “process Accepting “process

improvement” as the improvement” as the right focus.right focus.

Organisational barriers Organisational barriers to change.to change.

Mistakes as a learning.Mistakes as a learning. Commitment of the Commitment of the

many to support the few.many to support the few.

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KM and Lean are SymbioticKM and Lean are Symbiotic

KM helping LEANKM helping LEAN

Drawing out the Drawing out the knowledge of knowledge of “productivity”.“productivity”.

KM focus on the “flow” of KM focus on the “flow” of knowledge.knowledge.

Enables continuous Enables continuous learning.learning.

Enables transfer of Enables transfer of process/systems process/systems knowledge, common knowledge, common understanding.understanding.

LEAN helping KMLEAN helping KM An enterprise committed to An enterprise committed to

LEAN enables/seeks LEAN enables/seeks

Data -> Info. -> Knowledge Data -> Info. -> Knowledge processes.processes.

Helps identify and champion Helps identify and champion “knowledge” gaps.“knowledge” gaps.

LEAN events provide LEAN events provide opportunities for knowledge opportunities for knowledge transfer.transfer.

Focus is on “valuable” Focus is on “valuable” information & how this creates information & how this creates customer centric value.customer centric value.

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Barriers to SuccessBarriers to Success

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Barrier KM LEAN

Organisational Culture 1st 80% 4th 60%

Lack of Ownership 2nd 64% 2nd 70%

Info/Comms Tech.(Hard & Soft)

3rd 55% 7th 20%

Organisational Structure 4th 54% 5th 50%

Non-standard processes 5th 53% 6th 30%

Lack of leadership support 6th 46% 1st 80%

Reward & Recognition 7th 46% 7th 20%

Middle or FLM support 8th 45% 2nd 70%

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Preserving “Invisible Equity”Preserving “Invisible Equity”

1.99

8.95

1.98

3.58

5.38

3.12

Assets Finance

CurrentAssets

Non-CurrentAssets

CurrentLiabilities

Non CurrentLiabilities

VisibleShareholderEquity

InvisibleEquity

10.93

• The “Invisible Balance Sheet”• Management Value-Add

Market Value $14.05 Billion

Typical Balance Sheet when “Invisible Equity” included

LEAN

KM

So what's the future for……So what's the future for……

LEAN (TPS)LEAN (TPS) Used outside of manufacturing.Used outside of manufacturing.

YES but caution is needed, YES but caution is needed, Dis-assembly of the basic’s will alter the “value”.Dis-assembly of the basic’s will alter the “value”.

““Sustainable LEAN” now stands for:-Sustainable LEAN” now stands for:- L = LeadershipL = Leadership E = EngagementE = Engagement A = AccountabilityA = Accountability N = Nurturing.N = Nurturing.

KMKM Time has yet to come, needs to define and sell its Time has yet to come, needs to define and sell its

“value” from the customers viewpoint?“value” from the customers viewpoint?

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What do you think?What do you think?

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