It’s intimidating. The time never seems to be right. There is always a crisis or other priorities by management, or simply day to day work to get done. Maybe you are not really sure about your boss’s commitment to Lean – is this just a “trick of the week”? And there is so much to learn with Lean – should you start by reading a book? Hire a consultant? Go to a class? Hire a Lean coach?
Thankfully, you can start small. You can start today. There are virtually limitless opportunities to improve any enterprise with Lean thinking (ask Toyota if they think they have exhausted their potential!) but the good news is that the first improvements in an enterprise that has not practiced Lean can be very effective – even dramatic – since there is typically a great deal of “low hanging fruit”.
The two ‘must-do’s’
Two most fundamental principles of Lean Product Development are Reduction of Waste, and the Deming Circle. Practically, combining these gives you a great place to start – to identify waste, and use P-D-C-A to methodically reduce it. First, take a look around your enterprise and start to develop your skills to “see” waste. Much may be obvious, but a great skill of a true Lean expert is to “see” waste where others have accepted a status quo as being optimized or “good enough”. Product quality metrics are a great place to start. What is happening? Has the data been scrubbed so that it is clear what the actual problems are? If no, this is the place to start, and the Lean concept of “actual place, actual part, actual situation” is important – if at all possible “get your hands dirty” so that you have a clear idea of the major problems from a customer’s viewpoint. With scrubbed data, it is time to prioritize, and the classic way is the Parato analysis – simply group issues in like categories and work on the most impactful. This is typically defined by (cost x product sales). From here there are 2 branches of activity – the first is to confirm that the problems are actually being solved. The “Gold standard” of problem-solving is the “Basic Engineering Process” – described in a future article – but at a minimum it is essential that the physics of the problem are clearly understood, and that the problem can be “turned on” (duplicated in the lab or other environments) and “turned off” (the proposed countermeasure is shown to NOT create the problem in the conditions that duplicated the problem). This may seem basic, but in most organizations, there is pressure to show progress quickly, and unfortunately, this can translate into making changes without rigorous verification. This behavior almost always results in lots of cost for change, including engineering and tooling, and little or no progress in problem-solving. In one example, I joined an organization that was not particularly rigorous in their problem solving and had a significant amount of warranty cost. Lots of people were working on quality but they were not particularly disciplined or effective and were focused on making changes as the measure of progress. I knew this had to change.
Implementation and Immediate Results
I started by selecting the right leader, who had excellent leadership, good analytical skills, and great problem-solving capability. I then cut the staff working on quality by almost 80%, since other work was pressing and I was convinced that the work previously done was counterproductive. The leader gathered her remaining staff, did a rigorous (cost x sales volume) Parato analysis, and relentlessly drove good problem-solving. Results were virtually immediate – quality metrics started to improve, despite an 80% budget reduction, and within 3 years were at half of the former level. This is a great example of the Deming circle combined with waste reduction:
- The Plan was the rigorous Parato analysis of which problems were most impactful, as well as confirming the physics of each issue
- The Do was to create a countermeasure
- The Check was the rigorous “turn on/ turn off” methodology before production countermeasures were enacted
- The Act was an adjustment that was needed for the countermeasure to guarantee effectiveness
The bottom line: rigorous Lean based problem-solving works, and can show great benefit to the organization in a relatively short time, especially when applied to an obvious form of waste like quality metrics. In the example above, the forms of waste that were cut:
- Cost of quality as measured by warranty was halved – this was tens of millions of dollars per year
- Tooling cost and overall cost of changes for quality was significantly reduced since the effectiveness of changes was almost 100% -- this was many millions of dollars per year
- The budget for quality improvement staff was reduced by almost 80% -- this was several million dollars per year.
Most bosses would find this attractive.
The second branch of activity available for PDCA improvement in this example is to examine why the quality problems existed in the first place. Many organizations are good at quality problem solving – but the same or similar problems are created every product cycle. This is obviously another form of waste – and the countermeasure is the branch of Lean Product Development called “Knowledge Management”. Sounds intimidating, but at its essence it is simply asking the organization to “make NEW mistakes” – not to repeat the old. People inevitably jump to wanting to buy a big PLM (Product Lifecycle Management) computer system to implement Knowledge Management – and this almost always fails. Great results can be obtained far more simply – and practically – by focusing on the basics. To start, simply list up the quality problems, the methods to recreate the field problem, and the countermeasures that were implemented. Schedule a design review with the appropriate new product team, and review these ones by one. Is the product development team for the new product designing to the requirements that were generated to recreate and solve the quality issues? Is there any reason to think that the problems would NOT reoccur? This type of meeting is always sensitive – designers are proud of their work – but look for the hard evidence that the problem is addressed and will not reoccur – not verbal assurances. Typically, requirements and specifications will need to be added based on the knowledge that was gained through quality issues. This may seem basic, but again, it is not necessarily in place at many organizations. Again, you are closing the “P-D-C-A” loop – ensuring the feedback from the previous product is included in the new product. As you progress, there are more sophisticated methods to retain and apply knowledge – but in true Lean methodology, these focus on who is responsible, and how knowledge is accumulated, processed and delivered – with a computer system as the final enabler. What is the effect of this methodology? Simply, this is the methodology that many Japanese car companies have used for decades to launch their new vehicles at the highest quality levels – right from the start – where many other car companies struggle with quality of new models at introduction. This also develops a virtuous cycle – better quality at launch means less resources fixing problems in the field, which means more resources for innovation and new product development.
There, you started your Lean PD journey! There are many more ideas and activities available but the activity described above implements a couple of the most powerful P-D-C-A cycles to reduce waste. Results can be almost immediate, and the organization starts to “see” waste and rotate P-D-C-A as part of the culture. The best time to plant a tree was 20 years ago – the second-best time is…