Strategies for Achieving Lean Despite Inherent Variability in Processes or Products

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1 Strategies for Achieving Lean Despite Inherent Variability in Processes or Products Dr. Hugh McManus Senior Special Projects Engineer Metis Design, Boston MA Former Associate Director, Lean Advancement Initiative Educational Network

2 An Inconvenient Truth Variability exists in factory operations It is often much worse in: Services: Number of customers, Product demand, Types of services, Difficulty of cases Product Development and Engineering: Number of projects, Project types, Difficulty of technical work, Unanticipated problems Health Care: Demand, weekly/seasonal/epidemic cycles, Uniqueness of patients, Difficulty of patients, Difficulty of treatments Complicates, but does not invalidate, lean approaches McManus Strategies for Achieving Lean Despite Inherent Variability in Processes or Products July 15,

3 Effect of Variation A thought experiment: Imagine a system that is perfectly balanced, has no rework, and has just enough capacity to meet customer demand The only imperfection we allow is variability in both input and process How will this system behave? Let s find out Order I Task I Task I Task I Task Delivery McManus Strategies for Achieving Lean Despite Inherent Variability in Processes or Products July 15,

4 Queue Theory Queue (wait) time for a simple system: Wait_Time Process_Time Utilization 1 Utilization CV 2 2 a CV p 2 CV a is input variation Which we may not control CV p is process variation Which we want to minimize Utilization is demand/capacity Note to be efficient this should be 1 McManus Strategies for Achieving Lean Despite Inherent Variability in Processes or Products July 15,

5 In the limit, bad behavior For any variation level, some level of utilization makes wait time (and inventory, and ) explode Very high utilization requires very low variability CV SOURCE: LAI Lean Academy McManus Strategies for Achieving Lean Despite Inherent Variability in Processes or Products July 15,

6 Discrete Simulation: things are actually even worse SOURCE: LAI Lean Academy McManus Strategies for Achieving Lean Despite Inherent Variability in Processes or Products July 15,

7 Discrete Simulation: things are actually even worse System is very noisy and irregular in its behavior Makes short term data hard to interpret, masks bottlenecks, confounds corrective measures McManus Strategies for Achieving Lean Despite Inherent Variability in Processes or Products July 15,

8 What to do?? Don t Panic Make the situation visible Establish a cadence Standardize and prioritize work Establish a system to limit overburden Provide slack and empower flexibility While removing waste where ever you find it. McManus Strategies for Achieving Lean Despite Inherent Variability in Processes or Products July 15,

9 Visibility and Cadence Big board and daily huddle Photos by Earll Murman SOURCE: LAI Lean Academy McManus Strategies for Achieving Lean Despite Inherent Variability in Processes or Products July 15,

10 Visibility and Cadence Big board, War room, Obaya Management / Everyone can see what is going on, what everyone is doing, where problems are A first step that aids everything that follows Cadence, Battle Rhythm, Pseudo-takt Choose (carefully) a period for regular, non-panic adjustments Daily stand-up meetings Weekly (?) resource assignment Quarterly project planning Plan (and do) work and handoffs to the rhythm McManus Strategies for Achieving Lean Despite Inherent Variability in Processes or Products July 15,

11 What is Standardized Work? The current best way to safely complete an activity with the proper outcome and the highest quality, using the fewest possible resources. - Mark Graban Today s Standardization is the necessary foundation on which tomorrow s improvement will be based. If you think of standardization as the best you know today, but which is to be improved tomorrow you get somewhere. But if you think of standards as confining, then progress stops. - Henry Ford McManus Strategies for Achieving Lean Despite Inherent Variability in Processes or Products July 15,

12 Right Level Standardization: Checklist Establishes task sequence and priority Prevents mistakes due to omissions or other human errors Does not tell professionals HOW to do their job SOURCE: Gawande, Checklist Manifesto McManus Strategies for Achieving Lean Despite Inherent Variability in Processes or Products July 15,

13 Limiting overburden (excessive utilization) Input Limiting Scale back expectations on process until it works CONWIP (Constant Work-in-Progress) set WIP (Work In Progress) level only accept new work when prior work is complete Kanban (Pull Cell) Set WIP level at each station/function Upstream process only works until WIP level reached All have the effect of preventing blow up effect All have additional benefits less chaos, better work environment, lower defect rates McManus Strategies for Achieving Lean Despite Inherent Variability in Processes or Products July 15,

14 Slack and Empowerment As chaos is brought under control, people will have more time available Do not assign more work Increased utilization will bring back queue problems More importantly, less frantic employees can drive further improvement in the process Turn the vicious cycle into a virtuous one Time + Empowerment = Opportunity for Continuous Improvement - Zeynep Ton, Good Jobs Strategy McManus Strategies for Achieving Lean Despite Inherent Variability in Processes or Products July 15,

15 Sources and Further Reading LAI Lean Academy, Mascitelli, Ronald, Building a Project-Driven Enterprise, Technology Perspectives, 2002 Reinertsen, Donald G., The Principles of Product Development Flow: Second Generation Lean Product Development, Celeritas Publishing, 2009 Graban, Mark, Lean Hospitals: Improving Quality, Patient Safety, and Employee Satisfaction, Productivity Press, 2009 Gawande, A., The Checklist Manifesto: How to Get Things Right, Metropolitan Books, 2010 Ton, Zeynep, The Good Jobs Strategy, Houghton Mifflin, 2014 McManus Strategies for Achieving Lean Despite Inherent Variability in Processes or Products July 15,

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