Which lean event type should I do first, Value Stream Mapping or Kaizen Burst?

What type of lean event should we do first, Value Stream Mapping (VSM) or Kaizen Burst?

Before we can answer this question, let’s first define these two popular event types

Value Stream Mapping (VSM) – A multiple day event (2-5 days) focused on mapping the process from customer order to customer delivery. The goal is to complete a current state and future state map, then identify the 8 forms of waste that is keeping the process from achieving the future state. Requires multi-disciplined participation from all stakeholders who impact, or are impacted by the process. The deliverable is a list of projects, actions and events that need to be completed in the next 6-12 months, with names and due dates.

Kaizen Burst – Also called rapid process improvement (RPI). A 3-5 day event focused on making dramatic improvements to a specific part of a process by the end of the event (focus is on implementation, not planning). Not every action will be completed, but the goal is to have 80% of the actions completed during the event, and the remaining 20% completed within 30 days of the end of the event. The event should allow time to make adjustments in case the changes do not work. The goal is to make quick progress without pushing the waste to another department or area.

If you’re just getting started with your process improvement in a process area or department, I would highly recommend the kaizen burst event. The goal is to scope the intent and purpose of the event, then do a considerable amount of work up front (usually takes 1-2 weeks of preparation). During the event, the first couple days are focused on getting everyone familiar with the preparation, and to go and physically observe the current process, so everyone is aware of the wastes and issues. The rest of the days are focused on implementation. It’s an action-driven event. When you get done with the event, you have something to show for all that work and time away from your regular job.

Typical Kaizen Burst Workshop format, from Lean Enterprise Institute

When you pull people away from their job for 3 to 5 days, and you are just starting with process improvement (Lean and Six Sigma), you want to have something to show for all that time.

One of the problems with VSM events is that they end with a list of actions items. Now in order to see results from the event, you are asking those same people to spend more time after the event to complete these tasks. Remember, they have already taken time out of their work week. They are already behind with their regular work, and will need time to catch up. Even though there is excitement after the event, it’s not enough to carry into the following week. It requires a lot of micro-managing and project management and “hounding” people. In addition, usually only a handful of people get assigned tasks, and it is usually quite a few actions.

Don’t get me wrong, I think VSM events are excellent, and great for getting multiple departments and groups to understand the entire process, and get on the same page. However, it is really just a good planning activity, and the event alone does not result in any immediate improvement (other than networking and knowledge of the value stream). In fact, it can takes months before the actions results in any improvement.

Example of Value Stream Map

But for those getting started, or those that are needing major improvements, I would highly recommend the kaizen burst event.

Both events require upfront planning, but the kaizen burst requires more than the VSM, since there may be major improvements taking place in a short amount of time. Getting the right people involved is essential to success. That is why the kaizen burst event needs leadership authorization to empower the team at the start. In order to make these improvements, they must be allowed to try it out without a lengthy approval process. Leaders must assign and delegate people to the team they trust, or provide guidelines and rules that the team must stay within (such as budget, procedures, etc).

Finally, a kaizen burst usually involves the people doing the value-added work, more often than VSM events, which seem to be too heavy on management. You want to engage those people as much as possible early on in a Lean Six Sigma journey, since they are the ones who need to understand the concepts, and see the immediate results applied to their work.

After the process area has matured, or a couple kaizen bursts have been performed, then a VSM event might be needed, when their primary problems are coming from outside their area (outside their control). The idea is to “clean up your own backyard” before you bring outsiders into the process.

In summary, if the process area does not have a mature lean system (poor visuals, employees not trained in lean, hard to see process flow, lots of inventory, poor labels, lots of waste), then kaizen burst is the place to start.

What do you think? Do you agree? Share your comments below...

Employee engagement that will make you jealous!

One of the most difficult things for business owners and managers is to engage their employees in continuous improvements every day. Even the most advanced companies have struggled with this.

The problem is that companies focus too heavily on the tool side of process improvements. It’s actually more important how these tools are applied.

The secret is to focus on your employees and make them as successful as possible. When your employees are happy, they want to do a better job for the company. When they do a better job, your customers notice and are happier. Happy customers buy more stuff from you. Most companies don’t make this connection.

Rather than dictate improvements you would like your employees to make, you need to ask those who do the job day in and day out for their ideas, and help them implement them as quickly as possible.

Sadly, only a handful of companies have been able to break through and accomplish this.

One of them is FastCap, a small manufacturer of woodworking products and tools. The owner is Paul Akers, who has transformed his company into highly motivated employees that drive their own efficiency into their daily work.

Paul learned the culture of improvement from experts in the Toyota Production System. He wanted to share what he learned with all his employees, so he came up with a simple and easy approach that everyone in his company could understand and participate in, called “2 Second Lean”. Employees are encouraged to reduce time in their work by 2 seconds. That’s it! Who in your company would not be able to do that?

Luckily for all of us, Paul has documented and recorded his lean journey at FastCap on his YouTube channel and in his book. If you want to be motivated, inspired and amazed at their success, check out his videos at Youtube.com/user/fastcaptv

If you want help with the technical tools, check out our website at BIZ-PI.com.

If you want help engaging your employees, it starts with you! We would suggest watching at least 5 of Paul’s videos, and sharing them with your management team.

Combining DMAIC and lean events to maximize process improvements

The DMAIC approach for process improvement is the foundation for Six Sigma, and I have grown to appreciate it more each time I use it. However, DMAIC projects can take a while to complete. Lean events are great approaches to make dramatic improvements, but who is tracking the long term results after the event is complete?

There are two powerful ways to combine DMAIC with lean events:

1) Use lean events to move quickly through the DMAIC phases
2) Use DMAIC framework to manage lean activity in a work area

1) Use lean events to move quickly through the DMAIC phases

You can reduce the completion time for your project by using the lean event format to help you quickly move through the different DMAIC phases. The great thing about lean events is that you get the right people in the room, focused on a specific outcome, and you have a set timeline to get it done. This creates a strong sense of urgency that some Six Sigma projects seem to lack.

For example, you could have a lean event to build the project charter, perform an FMEA, gather detailed data for the measure phase, develop control charts, or conduct a pilot study or DOE. The idea is to get everyone together for a common task and get it done, rather than drag it out over one hour meetings every week.

You also don't need a full week for each lean event. However, you probably need more than one hour, so schedule half-day or full-day sessions with your team (we suggest at least 2 per month), so you can make lots of progress all at once, and not wait for action items to be completed. It also can be frustrating when you just start making progress, and you hit the end of your hour long meeting.

2) Use DMAIC framework to manage lean activity in a work area

You can also use the DMAIC structure to help with your lean events. During a traditional kaizen event (week long improvement workshop), the DMAIC framework is already being used, even if you don't realize it. When you are doing the prep work, you are conducting the Define and Measure phase. During the actual event, you are conducting Analyze, Improve and Control. However, sometimes the improvements and control systems are not as strong as they are during a Six Sigma project, due to time constraints. In addition, the long term tracking of metrics, to ensure that the event truly achieved the results, is often lacking after an event.

The DMAIC framework will also help you realize if you need more events to complete the improvements in order to achieve the goals for the workarea, and allow you to fully capture any cost savings or metric improvements. Perhaps the lean event made great strides, but the inventory is still too high, or they have not been able to consistently achieve their takt time. Maybe the last remaining action item is one of the most crucial items, that will make a dramatic improvement to the flow? DMAIC will keep the effort moving forward until the results are achieved.

It's important to combine DMAIC and lean events in your improvement plan. We don't want to have an event, make improvements, then walk away and not verify the team achieved their long term goals. Likewise, we don't want Six Sigma projects that take forever to complete.

Download a Free DMAIC project checklist >>>

Split testing website marketing messages with Minitab's Chi-Square % Defective comparison tests

Six sigma techniques have expanded beyond traditional manufacturing companies, into healthcare, movie industry, government and now online marketing.

Split testing (also called A/B testing) is one of the more popular techniques being used today by website developers, programmers and any company with an online presence.

Split testing describes a comparison test that is used to determine what works best on their website, by showing their site visitors different images, colors, phrases, layouts, etc and tracking which ones get the most "interest". Interest can be measured by time spent on a website, percent of clicks on a link or ad, website load time, and even tracking of cursor scrolling patterns.

For example, a website might want to determine what gets the most clicks, a button that says "Free Sign Up" (option A), or "Register" (option B).

After enough visitors arrive on the site (sample size is adequate), a comparison of the click rate is reviewed to determine which one did the best. The click rate is defined as the percentage of site visitors that clicked on the button divided by the total number of visitors who saw that option.

In the image above, you can see that 78% of the visitors clicked on the button when it said "Free Sign Up," but only 34% of the visitors clicked on "Register."

The click rate that is higher would be selected ("Free Sign Up"), and the other option is dropped (or modified again to run another A/B test).

Essentially, split (A/B) testing is a simplified hypothesis test or design of experiments (DOE).

In our example, assuming I had more than 100 site visitors, it is pretty obvious that the difference in the percentage is most likely statistically significant (not due to random chance). However, there may be situations where the percentages will be much closer together. In addition, what if we want to run an A/B/C test (3 options instead of only 2)?

Since the primary metric in split testing is a click rate (proportion), analyzing the split test cannot be done with an Analysis of Variance (ANOVA). Therefore, you either need to run a 2-sample proportions test on each comparison (A vs B, B vs C, and A vs C), or you can try Minitab's Chi-Square % Defective analysis.

We recently performed a split test on our website, using 3 different messages at the top of our website. The top bar in green is a service we used called Hello Bar, which is free for use (one website only).

The three options we used for our message, along with the background color:

• A: "Check out all the FREE downloads and information" (Blue)
• B: "5S and Control Chart SPC templates for FREE" (Gold)
• C: "FREE Lean and Six Sigma Excel Templates" (Green)

After a month of displaying these 3 different messages to our site visitors (done automatically by Hello Bar), we reviewed the data.

• A: "Check out all the FREE downloads and information" (Blue) = 0.5% click rate
• B: "5S and Control Chart SPC templates for FREE" (Gold) = 0.8% click rate
• C: "FREE Lean and Six Sigma Excel Templates" (Green) = 1.6% click rate

From the data, it seems that the last option performed the best. If I was a betting person, I would have predicted the 2nd option (B), but that's why we collect data to make decisions! In addition, as Six Sigma practitioners, we must also ask if these differences are statistically significant, or could the change with more samples?

To run this analysis in Minitab (version 17), we setup our data in the following format:

Using Minitab's Assistant function (highly recommended when unsure what tests to perform), select Assistant --> Hypothesis Tests...

Next, we decide that we want to "Compare two or more samples" (since we are running an A/B/C test). Under that section, since we have proportions (click rate) instead of measurement data (like website speed, time spent on website, etc), we select "Chi-square % Defective"

By the way, if you were running only an A/B test, then you would select "Compare two samples with each other" then select "2-sample % Defective"

On the next screen, we tell Minitab what our options should be assigned to in the worksheet. Under the X column, select "Style" (or whatever field you are using to identify your options).

One thing to note. In the analysis, the "clicks" are considered "defects", but in fact these are good things. Technically, we could have assigned the "non-clicks" as defects. It won't matter either way, as long as you keep track what you define as the "defect".

There are 4 pages that get generated, but the most useful is the Summary Report.

If you start in the upper left, the p-value is 0.031, which is less than 0.05, so we conclude that at least one option is statistically different than one of the other options. The upper right section tells us that the statistical difference occurs between A and C. What it also tells us is that option B is not statistically better than option A, nor is it statistically worse than option C. Therefore, we should definitely drop option A from our Hello Bar message, but we need more data to conclude whether option C is statistically better than option B.

Does that mean the message seems to make a difference? Maybe, because if you were paying attention, we also had different colors for each message, so we have confounded our results with color. Maybe site visitors are not clicking as often due to the color, not the words. Sounds like more split testing is needed!

Split testing is a great tool that has brought Six Sigma analysis into the internet marketing world. I plan to use the term "split testing" or "A/B testing" instead of DOE or experimentation when talking to more tech-savvy audiences.

Have you tried split or A/B testing on a website? Explain what you did in the comments below...

Don't waste time on a full Gage R&R study until the data says you are ready

We support a lot of small volume manufacturing facilities (delivering low rate, high complexity products), which presents different challenges for implementing Six Sigma.

When you only produce one product per day or per week, it can be difficult to gather a good statistical sample for any analysis. In addition, even if the parts were available, the measurements can be complex with numerous data points, so the time to collect the data for each sample can take from 15 minutes, up to 8 hours or longer!

I'd like to share a best practice we've discovered with Gage Repeatability and Reproducibility (R&R) studies that can help all businesses save time and money with smaller sample sizes, not just those in the low volume production businesses.

I'll assume you have some knowledge of a Gage R&R study. If not, check out this page >>>

Let's assume you need to perform a Gage R&R on a new piece of test equipment.

We recommend a study that will require at least 30 total samples in the experiment. This allows us to gather a significant number of experimental runs to understand what is happening. You may require more, but I would suggest starting with 30, and evaluating the results before adding more runs/samples.

If we have 2 technicians running the equipment (only one piece of equipment), then typically we would take 10 parts, 2 technicians and 3 repeat measurements. That is a standard Gage R&R setup. That would be 10 x 2 x 3 = 60 total samples, which exceeds our 30 sample minimum.

What if each sample takes 2 hours to complete? Our original study will take at least 120 hours. Do you think your company would let you tie up the equipment for that long, and prevent 10 parts from being shipped? Highly doubtful in a low volume environment.

However, we should try to reduce the size of our study, and use another combination of parts, technicians and repeats to get closer to 30 samples. We could select one of the following options:

• 5 parts x 2 technicians x 3 repeats = 30 samples
• 8 parts x 2 technicians x 2 repeats = 32 samples
• 6 parts x 3 technicians x 2 repeats = 30 samples
• Or any other combination you can think of...

Which one is best? It depends on your situation. If you have a lot of uniqueness in your parts, I would select more parts for your study. If you think technicians may be driving variation, you should try to find a 3rd technician to include. If you suspect repeatability issues, then more repeat measurements may be preferred. This is where the expertise of the technicians, managers, engineers and experts can assist.

Let's select the option with 5 parts, 2 technicians and 3 repeats. Even though we have reduced the study down to 30 samples, it will still require 60 hours of testing to complete the Gage R&R, and we will be holding up 5 parts during that time. That's not what your production team will want to hear.

What can we do?

We suggest you conduct a partial Gage R&R, and evaluate those results before completing the full Gage R&R.

A partial Gage R&R would be a much smaller version of our full study. Instead of 5 parts, we should start with 3, and instead of 3 repeats, use only 2 repeats. We still want at least 2 parts, 2 repeats and 2 technicians as a minimum, so we get some estimates for repeatability and reproducibility.

This would create a Gage R&R study of 12 samples (3 parts x 2 technicians x 2 repeats). Now we have reduced the test time to 24 hours, and are only holding up 3 parts. Compared to the alternatives, that should sound pretty good to your production team.

How can we do this and still properly evaluate the equipment? 

The trick is that we might find enough variation in the partial Gage R&R results that we should stop the study, and go work the issues, before we complete the full Gage R&R. No sense wasting time gathering more data showing the same problem!

However, if the partial Gage R&R show favorable results (% of Tolerance and study variation below acceptable levels), then you will need to complete the full Gage R&R in order to ensure those results hold up with more parts, more technicians and/or more repeats.

The savings will come into effect only if there are problems with the measurement system. If there are no problems, then there will be no savings, as the full Gage R&R will still need to be completed. The nice thing is that you don't need to start over from scratch, you would just expand the partial study until it matched the setup of the full study. For our example, you would simply continue the study with the additional 2 parts, and add one additional repeat run to the study.

Let's see how this works with an example, using sample data from Minitab.

After running the full Gage R&R (30 samples), we come up with the following results (charts generated using the MSA Assistant feature in Minitab version 17):

The results show an unacceptable Gage R&R, as the % of Tolerance is above 30% (calculated at 59.7%), and the % of study variation is showing 63.1%. Most of the variation is coming from reproducibility (technician) at 56%.

The question we want to know is whether our partial Gage R&R study would have detected the same problems with the measurement system.

When we condense the data set down to 12 samples, and re-run the analysis, here are the results.

The results come out very similar!

% of Tolerance (Full) = 59.7%
% of Tolerance (Partial) = 64.5%

% of Study Variation (Full) = 63.1%
% of Study Variation (Partial) = 65.0%

% of Tolerance for Reproducibility (Full) =  56.0%
% of Tolerance for Reproducibility (Partial) =  63.5%

Since the measurement system contains reproducibility issues, we benefited by not running the full Gage R&R study. Now we need to investigate and resolve the technician issues, and conduct another Gage R&R when we feel those issues are resolved.

On a side note, do not run a Gage R&R unless you think it will be successful. If you know there are calibration problems, mismatching of equipment, outdated software installed, worn out parts, and differences in techniques used, then resolve those issues first. Otherwise, you'll have to re-run the study again later, after those improvements are made. The initial study would be a complete waste if it told you things you already suspected would be a problem. There are enough unknown variables inside a measurement system that you should deal with the obvious and known variables first.

After we make improvements to our measurement system, we would still need to run a partial Gage R&R the 2nd time, but again, do not complete the full Gage R&R until the partial Gage R&R shows results that are acceptable. Your 2nd study may find additional problems, or prove that the improvements were not effective, so we should stop and fix those right away.

Once you get acceptable results from the partial Gage R&R, only then should you continue to the full Gage R&R.

Bottom line, do not misread this and conclude that you only need to run a partial Gage R&R. A full Gage R&R is still needed to ensure all the variation in the additional parts and repeat measurements have been uncovered. But, until the measurement system issues are fully resolved, don't waste time doing a full study until the data tells you when you are ready to do so.

This concept can be applied to capability studies as well. Ideally, we would like to have 100-300 samples from a stable process produced from all of our sources of variation in the process, before we calculate an accurate number for capability indices (Cpk and Ppk). That may be easy to do in high volume production environments, but that is very difficult in low volume industries. Even getting a statistically valid sample of 30 is near impossible.

What we suggest is to gather the first 5 samples, and calculate capability. If the small samples show a problem (mean near the limits, large variation compared to limits), that might be enough information to dig into the problem. If the results are good (mean near the target, variation small compared to limits), then you will need to wait until at least 30 samples are generated before drawing any long term conclusions from the Cpk/Ppk values.

Remember, 30 samples is ideal, but 5 samples is better than only one sample, which is better than none at all!

In summary, in order to save time and money conducting a Gage R&R study, we suggest you follow these three recommendations:

1) Setup your full Gage R&R study to run only 30 samples - then decide if more are needed
2) Do not run a Gage R&R if you suspect it will not pass - address known issues first
3) Run a partial Gage R&R first, then if they are acceptable, complete the full study, otherwise go address the identified issues

If you'd like to learn more about Gage R&R studies, check out our training class >>>

Has anyone had experience trying this approach? We would love to hear from you! Add your comments below...

What does golfing have to do with Six Sigma?

Here at BPI, we are always looking for ways to make Lean and Six Sigma concepts easier to understand for those getting started.

We will be creating a series of videos with examples that might resonate with you on basic terms and concepts. Feel free to use these videos in your training class, or send them to your attendees to help reinforce concepts you've already taught or coached.

The following video puts Six Sigma in terms of golfing, where the distance of the tee shot is being measured, compared to the limits of the golf hole.

The process of teeing off can be evaluated in Six Sigma terms based on how likely the shot will land between two sand traps.

We also explain how to connect these concepts back to the real world, such as in business with a forecasting budget process, with limits of +/- 10%.

Are there good examples you've heard, that you'd like us to capture in animation format? Let us know in the comments below...

Myths about Toyota and why this is the improvement book you must read!

Toyota Kata is one of the most popular books in the process improvement community right now (summer of 2014). I've heard it mentioned many times in the past few weeks, so I decided to see what all the hoopla was about. It is definitely worth all the attention! I've read a lot about Toyota over the years, and have visited the Georgetown facility, and taken training and been mentored by former Toyota employees, but this book, written by Mike Rother, has greatly increased my understanding of how lean should be applied.

This is a lengthy blog, so I will provide a brief overview, prior to the detailed review.

Brief Overview

Toyota is the benchmark for how to improve your business, based on it's years of continued success. Toyota has opened up it's doors to anyone curious to learn, but no one has been able to replicate their success. The reason they haven't succeeded is explained in this book. Toyota has mastered the art of identifying and solving problems. All of their lean strategy is an attempt to force problems to rise to the surface, so they can be quickly resolved using a standard problem solving approach. That is the "secret" that other companies are not disciplined to follow.

Most companies do not embrace problems (usually try to hide them), and they do not use a disciplined approach (called "Improvement Kata") to solve the problems when they are forced to resolve them. They master the problem solving technique through coaching from management (called "Coaching Kata"), who are experts in using the approach as they worked their way up the company. Improvement Kata is not easy to see during benchmarking tours, and companies leave the tours focusing on the tools, instead of the reason behind the tools. When they implement the tools, it raises up problems, and most companies see this as a problem, and quickly claim that it didn't work, when in fact it did exactly what it was suppose to do.

Detailed Review

Let's first define kata, since it's in the title of the book.

Kata is a set of routines or methods practiced daily. These are not documented or described, but a way of thinking and behaving that is embedded within the Toyota culture. This is why most companies who study Toyota cannot replicate them, despites decades of trying to "reverse engineer" it.

Often people ask me, why is Toyota studied and benchmarked? Yes, they have their share of problems, so they are not perfect. However, over the long term, they are one of the most successful companies, based on:
• Sales growth for over 40 years, during which US automakers' sales reached a plateau or decreased
• Profits exceeded other automakers
• Market capitalization has exceeded GM, Ford and Chrysler (formerly "The Big 3") for many years, and recently exceeded all three combined
• World leader in sales rank, and is number 2 in the US

Most companies walk away from a Toyota tour with lean tools that are copied (andon, kanban, heijunka, visual controls, mistake proofing, etc) and they do achieve some success, but how they handle problems is not obvious during the tour. In fact, despite what most people think, Toyota does not standardize on tools and roll them out consistently across their factories, they only standardize on the problem solving approach. The tools change as conditions change, depending on the product and service being performed. If you go back and visit Toyota years later, you will see different tools applied within the same assembly lines. They are constantly adjusting and improving. If companies try to replicate countermeasures (improvements), it will not work in other factories because causes and conditions are different.

That is the intent of this book, to make it visible to us how Toyota achieves continuous improvement and adapts to change through daily behavior patterns and coaching that supports it.

The book is divided into 5 major parts:

• Part I - Long-term organizational survival for Toyota
• Part II - How most companies behave
• Part III - "Improvement Kata" - solving problems every day to stabilize process performance and identify new problems
• Part IV - "Coaching Kata" - how they teach and mentor employees on how to learn the Improvement Kata
• Part V - Implementing Improvement and Coaching Kata outside of Toyota (in your organization)

Differences between Toyota and other companies

Most companies want to have a clear plan to achieve results. Toyota knows that the details of the plan are unclear, and won't become clear until extensive investigation and analysis takes place. They set a target condition (what it should look like), and work towards the target, knowing that the path will be uncertain, unpredictable and failures will occur. Failures are when the learning takes place, and that is viewed as a positive outcome at Toyota. If we already think we know the outcome, then we are biased towards a certain outcome, and cannot truly understand the causes of the problem.  They use the Improvement Kata methodology to navigate through the uncertain and unpredictable path to a solution, and the leaders know the process will work, so they don't need to have a detailed plan. This is similar to a lost hiker, looking to get back on the main route. If you can hear the roar of the traffic (vision), you can head in the right direction, but you only have a flashlight that highlights the immediate danger in front of you (problems) that you need to resolve. You cannot see further than your flashlight, nor do you need to look that far in advance, as long as you are still heading towards the sound of traffic.

Toyota uses a Plan Do Check Act (PDCA) approach to solve problems. The process compares the current results against the target condition, to see where there is a gap. The target condition is not measurable, but instead it is a description of how the process should operate, and does not include solutions or countermeasures (implement 5S or kanban or change layout). Measures can be manipulated, but process descriptions cannot. If there is no target condition, then after evaluating the current state, a short term target condition (1-4 weeks in the future, no more than 3 months) should be defined.

Next, the process is studied and evaluated to understand why the target condition is not being met. This is 90% of the effort, and still part of the Plan phase of PDCA. Once the true causes are understood, then countermeasures are implemented (Do) and checked to see if they move the process closer to the target condition (Check). If not, then the process is analyzed further until the correct countermeasures are achieving results.  Once the results are achieved, the process is stabilized, and a new target condition is set (Act). Most companies fall short by skipping past Plan too quickly, spending too much time in Do, then failing to check results, stabilize and set a new goal. They quickly look to move away from this process and work on something new, so they can relax for a while. Toyota does not relax, as they are continuously improving the process and looking for the next problem to occur.

In fact, if there are no more problems in the process, then that means there is a problem because the target condition is not challenging enough to reveal the problems. They are striving to achieve a vision of one piece flow, so ignoring problems are slowing up their progress towards the vision.

Continuous Improvement and Adaption

The world and business is always changing. Toyota is setup to continually monitor and adjust to those changes slightly every day. Most companies wait until the change can no longer be ignored, and then they make massive changes to adjust, if they actually decide to embrace the change. Many do not, and fall further behind.

Toyota believes that cost and quality improvements are made in small incremental steps, not major projects, events and activities that occur periodically. Daily improvements from everyone in the company is difficult to copy, which gives them their competitive advantage. If your process is not continually improving, then the process must be falling back into a chaotic state, which is how most companies operate. They periodically try to improve processes with major activities, and the rest of the time the process is slowly falling back into an unstable condition. All processes are either slipping back or being improved.

"…it is better for an organization's adaptiveness, competitiveness, and survival to have a large group of people systematically, methodically, making many small steps of improvement every day rather than a small group doing periodic big projects and events."

Why Action Item lists are bad

Rother describes how action item lists are very common in most companies except Toyota. However, most of the actions are just adding more confusion into the process in an uncontrolled manner, pulling scarce resources in different directions, and not part of a structured system of small, incremental improvements. Toyota strives for only one change at a time, to allow the cause and effect to become clear, not multiple changes at once. Designed experiments (DOE) can handle multiple changes, but it requires expertise to develop a DOE, and that complex approach prevents all employees from experimenting every day. Changing one thing at a time seems slower, but when the feedback is quick, the next change is also quick, so the entire process overall is faster. We can find plenty of actions to take to improve, but Toyota only addresses the problems that are preventing them from achieving the target condition. Most action item lists are just ideas for what could be done, that may or may not help achieve the target, because the analysis and investigation has probably not been done to determine the correct solution (countermeasure). Toyota also has many problems to solve, but only works on the immediate problems that are preventing them from achieving the target condition. Most companies don't have the patience to wait for the analysis and investigation, and instead reward action that is taken immediately, not results achieved in the future.

Action item lists can exceed 100 or more tasks after a non-Toyota lean event

Long action item lists do not lead to more improvement, they give us a false sense of accomplishment, and can take ownership away from the team ("I completed my actions, so it's not my fault the process is still broken"). In fact, once a few changes have been implemented, it may eliminate the need for other actions on the list, yet they still get implemented anyways. Now we have a new process completely that we aren't sure if it is better than the previous process.

Toyota focuses on one piece flow, not making schedule

Most companies focusing on "making production schedules" but Toyota focuses on continuously improving the process. "Making production" drives companies to hide and work around problems. "Continuously improving" drives Toyota to find and remove problems, so the chance of making production in the future is more likely. By focusing on stabilizing and continually improving the process, the outcomes will naturally come to fruition, instead of people  "firefighting" and performing heroics to make schedule. Most companies manage to the outcomes only, focused on results, not the process that drives the results and how they were achieved.

Toyota considers it a negative if problems are hidden or not discovered, so they setup their processes to expose weaknesses quickly and often. This is counterintuitive to most companies, who want to achieve short term results like "make production schedule" only, and think they can replicate those results over the long time without addressing the root causes of the problems. Toyota cannot manage the process if the problems are not visible, as they realize they won't be able to achieve consistent results in the future if the problems are hidden.

Rother gives examples of how attitudes around process changes can be improved. When suggesting countermeasures, he is often met with statements like "let's see if this works." In Toyota, the changes are setup to fail in order to identify problems, so he tells companies he works with that that they are right, it will not work. He suggests you change your company's mindset, and ask them to consider "what do we need to do to make this work?"

Problems at Toyota are not viewed as good or bad, simply a problem that was expected to occur on their way to the target condition. They do not blame operators for problems. They assume that people are doing their best, since they feel that changing out people in a process will likely result in the same problem occurring (most problems are system issues), and teamwork is needed to solve problems (not pointing fingers). That being said, they do not have a laid-back attitude of problems, quite the opposite. It is a diligent focus on solving problems using the Improvement Kata.

Toyota and setting a vision

Toyota uses a broad vision to help move the company in the right direction "One piece flow at lowest possible cost". This helps align the company, especially when departments argue about who will need to take on some inefficiency to help the overall company become more efficient. The example that Rother shares is a logistics manager trying to optimize their process of delivering parts to the factory. The improvement idea presented by the team was to make Logistics unpack and present the parts to the factory, and deliver  more frequently in smaller batches. This takes more time, and Logistics see that extra work as waste and slowing them down. However, to the overall process, it's less waste to the factory, which is the best decision overall. Without a vision, the departments will struggle to determine who should take on more waste in the short term for the betterment of the entire value stream, and to help move the company towards the vision.

The vision also keeps teams from working on the wrong problem. Another example provided was the situation where a team needs to increase the number of machine setups, to strive closer to one piece flow. This change will increase the number of setup checks and quality paperwork. Instead of looking for other solutions (because that will increase these tasks), Toyota will proceed with the change because it helps move them closer to their vision. They quickly shift their focus to reduce the impact of the additional setup checks and paperwork, instead of looking for different solutions.

This concept of letting the goal drive activity also carries over with Cost Benefit Analysis and ROI calculations. Instead of using it as a gate for taking action or not, Toyota only uses these financial analyses to help decide which solution is best, or what needs to be done to make it more feasible. If the solution is moving them closer to their vision, then it needs to be done. The analysis is just supporting how to get there, not whether it should be done or not. If the payback is too long, then alternative solutions must be developed to reduce the cost, so it will be more favorable financially. When teams are empowered to come up with more cost effective solutions to support the vision, they have seen impressive results.

Process management vs management by results

Toyota manages the process, whereas most companies manage the results only. If you manage to results, there are many ways to achieve the outcome you want, and most of those ways are detrimental to the business and create a false sense of achievement.

For example, if you want to achieve your sales output for the month ($500,000), you could either:

• produce what the customer wants by having each product deliver on time as planned (good)

OR

• build more of the same items, in hopes that enough will pass test and inspection to complete the sales demand, in order to work around the quality issues, which increases inventory (bad)
• deliver partially completed units to the next process, then recall them early next month and complete them, so you can get the sales credit (bad)
• move resources to higher cost items and deliver more of them, to increase the total output dollars, even if they aren't due yet, which increases inventory and robs the work from the next month (bad)

Ford influenced Toyota?

Toyota adopted many of Ford's assembly line and conveyor system approach, but built the flexibility and problem solving aspect into the model. They are constantly striving to achieve a conveyor system for every product, which is what Ford was trying to achieve (although with only one product). Rother goes through some history of Ford and Toyota and how they developed into the company they are today. Rother also explains that most management practices utilized in companies today are not actually flawed, but need to incorporate continuous improvement and adaptability in order to align with Toyota and keep up with changes in their industry.

Ford Highland Park had elements of continuous flow in the early drawings

Lean tools are temporary countermeasures towards the vision

Common lean tools like Heijunka (Leveling production), kanban (pull systems) and supermarkets are viewed by most companies as ideal states (after they tour a Toyota facility), but Toyota views them as temporary states to help them achieve their one piece flow vision. The real intent with these common lean tools is to create a target condition, so that the process can be evaluated against it, and problems can rise to the surface (when the process fails to achieve the target). Instead of setting up a schedule that is achievable in the short term (like most companies), Toyota will establish a schedule that is not achievable, and work the issues so that it will eventually be achievable. They will then remove the temporary systems (kanban, heijunka, supermarket, etc) so they can continue to move towards one piece flow.

Pareto charts are overused

Pareto charts should not be used as often as they are. They tend to be utilized far too late, after the problems have happened, and when the causes are no longer around to observe. Many times, the "Other" category is the biggest issue on the chart, which still requires additional analysis or data collection. Toyota feels it is better to solve problems as they come up, as you will eventually encounter the biggest and most critical problem, rather than spend time analyzing old data in an attempt to identify the biggest problem. Old data means old information about what happened. Toyota focuses on quick responses to problems as they occur, when the root cause is still able to be found.

Countermeasures are temporary only

Toyota looks for temporary solutions, in order to continue further towards the target condition, instead of coming up with perfect solutions that takes weeks, months and lots of money to implement, and expecting them to be in place for years. If a team is continually improving, today's solution may be improved upon tomorrow, so why spend lots of time and money on something that might change again. He relates a personal example of how a team he worked with spent lots of money and changed priorities for many departments to expedite a new rack system, only to  request changes to it the next week.

The Five Questions

Rother describes the 5 questions, which are at the heart of Improvement Kata.

When done correctly, using PDCA and comparing the current condition to the target condition, the countermeasure will become obvious, and it will often times be simpler, easier and more effective than expected. Rother provides an example of a damaged fan blade that resulted in tightening a screw on a fixture, instead of a complicated mistake proofing alignment device or additional operator training that was initially proposed, before the full analysis was completed.

Employee empowerment not what you think

One misconception about Toyota is that the lowest level employees are empowered and given time to solve problems. They are empowered to provide input, but other team members actually observe the process and solve the problems. The operators are expected to follow the standard, and pull the andon cord when they encounter problems. If they spent time working on solving the problems, that would prevent them from stabilizing the process and becoming experts on the standards. They also do not have improvement experts, since everyone's job is to solve problems by using the Improvement Kata, that they were taught and coached on how to follow.

Coaching and mentoring

When mentoring employees on the Improvement Kata, Toyota makes sure that the mentor does not suggest solutions, but instead only asks leading questions, and makes sure the next step proposed by the mentee is logical. If not, then the mentor provides suggestions and helps them through the next step. If they have a better idea than what the mentee suggests, but the mentee is able to move towards the target condition with their own solution, then the mentor cannot suggest their idea, otherwise it ruins the relationship. It would fall back to the mentee wanting to constantly ask "tell me what to do" and not learning how to do it themselves.

They also suggest that a written document (A3) should support any coaching sessions. Otherwise it's too easy to divert from the target condition and get off track. Keep mentoring sessions at 15 minutes to keep the mentee focused on the next step only, not jumping too far ahead, and they encourage them to increase the frequency of coaching cycles. The mentoring should take place often but for short durations. A good mentor-mentee relationship will meet multiple times per day for minutes at a time, instead of on set schedules (one hour per week). If the mentee is not successful, then the mentor is not doing their job, and should use Improvement Kata to figure out why. It is imperative that the mentor take ownership in the outcomes of the mentee, so they are both accountable for results.

"If the learner hasn't learned, the teacher hasn't taught"

How should companies implement Improvement Kata?

For companies to begin to adopt Toyota's kata practices, consider starting with Toyota's vision of "one piece flow at lowest possible cost," since that can apply to any business.

Rother provides a great list of common obstacles that companies encounter that differ from Toyota:

• Using action item lists
• Senior leaders struggle with internalizing the 5 questions
• Using PDCA, there is too much "do" but not enough "check" and "act"
• Jump to solutions and skip over detailed analysis and observations
• Mentees trying to guess the solution that a mentor has in mind, when in fact, the mentor does not know the solution in reality
• Not comfortable with not having a clear path to a solution
• Repeating steps (repeating go and see, more analysis) is viewed as a negative or error, when in fact it is part of the learning process
• Don't realize it is a new way of managing, not additional work
• Spending too long coaching at one time, instead of smaller focused efforts

This book could have been titled "The Toyota Secret" as it clearly explains why Toyota has been so successful, but why most companies cannot replicate what they've done.

If you are just starting out in process improvement, or are an expert or consultant, you will find this book very beneficial, and will want to read it more than once, in order to make sure the message and recommendations are embedded in your memory.

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