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Grant had been with the company for only one month. He was the new Production Manager of PW Fabricators, a family run, Metal Fabrication Company. His boss, the Works Manager had set him the task of preparing the departmental budget for the new financial year.

As he pored over various figures from previous years he was surprised to see that maintenance spend on spares had been approximately £2,500 per month every month over the past 2 years. It was uncanny, most of the months were within only a few pounds of each other.

Grant decided to go and talk to Stan, the Senior Maintenance Supervisor to further understand the situation. When he arrived in the maintenance area the three maintenance technicians were having their lunch. When the maintenance team saw Grant approaching they pretended to read their newspapers.

“Stan, can I have a word with you when you get a minute”, said Grant.

“Yeah, ok, I was just about to finish my lunch so we can do it now if you like”, said Stan as he quickly put the lid back on his plastic sandwich box.

“Ok, cool, I am pulling together budgets for next year and as part of the process I have been taking a look at what we have spent over the past 12 months. It would appear we have spent almost £2,500 on maintenance spares per month every month – is that right?

Stan smiled and looked at the other maintenance guys who gave him a knowing look.

Stan said, “Grant, the boys and I have been here for over 20 years and it has always been the same. Without being rude, you have to understand how the system works, we get a budget, we divide it by 12 and we need to spend it because if we don’t it will get taken off us next year. It’s just the way it is. It’s always been the same.

Grant looked flabbergasted. “Hold on, just so I understand what you are telling me, you get an annual budget and you divide it by twelve to see how much you can spend a month. What happens if you don’t need to spend anything because none of the equipment has broken”?

“We spend it anyway on things we might need because the other thing is that it is so hard to get anything signed off around here that when we want one of something I normally order two. Do you realise it takes three signatures just to order a new set of Allen keys?

As Grant was taking this all in, he surveyed the maintenance area, seeing the place for the first time with ‘kaizen’ eyes. All around the perimeter of the maintenance room were six feet tall metal cabinets. He approached one and opened the doors. It was totally full of maintenance spares.

“Stan, do all of these cupboards have spares in them”, said Duncan.

“Yep, I’ve also got a container in the yard for the larger parts”, replied Stan.

“Wow, you could set up a shop. This situation is crazy, we need to give you a better process for ordering spares”, Grant said whilst shaking his head.

“That is what the last guy said, best of luck”, said Stan.

Grant walked back to the office block and knocked on the Works Managers door.

“Come in”, said Jim, a pleasant man who had been with the company man and boy.

“Jim, can I ask you a question”, enquired Grant. “Sure, fire away”, said Jim.

Do you release the maintenance guys are sand-bagging the spares figures because they believe if they don’t spend what is in this years spares budget monies will be taken off them next year.

“Yeah, Yeah”, said Jim. One year about five years ago we under spent by about £50k so when budget time came around next time, I was told to reduce the budget by £50K. It’s just not worth all the hassle so I have told Stan that he can spend whatever is in the budget provided he doesn’t over spend and he buys things we are likely to need. It all near enough works out in the end. It makes for an easy life as I have more important things to worry about like trying to meet these Production Schedules.

“But Jim”, said Grant. With the greatest of respect, this can’t be right, we are encouraging the wrong type of behaviour. Stan has so many spares in the maintenance area he could literally start a shop, surely we need to find a better way. There are thousands of pounds tied up that could be used elsewhere not to mention the amount space they all take up, he has even got a container in the yard. Hasn’t Stan been hassling you to buy a new Lathe where is that going to go, there’s no room in the maintenance area.

Will you give me permission to go and speak with the Managing Director to see if we can find a better way? “I would rather you didn’t “, said Jim, “don’t rock the boat and make it worse for all of us”. Grant reluctantly agreed but as he left Jims office he was already hatching a plan which he thought would be acceptable to all.

Over the next few days Grant pulled together the facts regarding spares usage and spares stock holding. The facts left him gob smacked. The company had over £275K worth of spares on site but had actually consumed in the order of £70-90K each in the previous 3 years.

Armed with his facts he made his way to the budget preparation meeting with Jim, the Works Manager. “Jim, I think I have found a solution to the maintenance spares problem which will be acceptable to everyone. I might even change Stan’s behaviour but it does need all of us to think in a different way. It might even allow us to buy that lathe you want without over-spending on budget”.

“Go on”, said Jim, seemingly interested for the first time.

“Firstly, we need to inform Stan that if he doesn’t spend the allocated budget it won’t be taken from him next year unless the company’s financial situation dictates otherwise. Secondly, I would like to issue Stan with a company credit card and agree a maximum figure with him he can spend per month without authorisation”.

“What”, exclaimed Jim, “that won’t be possible, I mean I don’t even have a credit card and I am a senior manager”.

“But Jim, said Grant, with respect you don’t need one but Stan does. If you look at what Stan spends his money on and I have, it’s invariably lots of little spends with the occasional big spend. If we give him a credit card and let him spend up to say £1,000 per month without either of us signing it off it will also reduce the amount of work accounts have to do as they will only get one invoice per month rather than lots of little ones. It’s a win all round, what do you think”?

“The Managing Director will never go for it”, said Jim.

“It’s up to us to persuade him, just think if Stan doesn’t spend as much as he has been spending because he knows he can have access to funds you are more likely to get some of that other plant you need. The crux of this is that we have to persuade the MD to go along with our new process, are you prepared to change the process Jim”?

Jim pondered for a few seconds, then turned to Grant and said, “I know you are right but it has been too easy to just to go along with the current process because it creates no aggravation for me. OK, let’s do it. I will propose it at the monthly management meeting next week”, said Jim.

The next week dragged for Grant, he couldn’t wait for the management meeting. He was careful to produce some data for Jim to present at the meeting which showed the absurdity of the current system. Finally the day of the management meeting arrived. Grant was excited and nervous at the same time. If the MD agreed to the changes proposed Grant had a chance to show how creating lean processes which were simple and logical to follow, could change the behaviour and a culture.

Grant went about his daily routine whist the meeting got underway but couldn’t really concentrate. Two hours went by without any word. Then suddenly he heard the loudspeaker system in the factory ask him to report to the board room. Grant walked nervously to the board room and knocked on the door.

“Come in Grant”, said Frank, the MD. “Jim has been telling me about your idea to issue Stan with a credit card”. In all of my years I have never ever considered doing that”. Grant’s heart sank. “But on reflection, I actually like the idea and wonder why we have never thought of it before. I am prepared to do it on one proviso, I would like to see maintenance spend reduce legitimately. Do you think your new process can make that happen”? “I am quite sure it will do that Frank”, said Grant. The new process will allow Stan to spend appropriate amounts when he needs to without the encumbrance of bureaucracy and will also mean that he can hold less on site because he knows he can get it quickly if he needs it.

“Let’s give it a three month trial and if it works we will make it permanent”, said Frank.

One week later Grant and Jim strode purposely into the maintenance area. Firstly Jim explained to Stan that monies would not be taken off him if he did not spend them unless there were extreme extenuating circumstances. Secondly, Grant explained the new spares purchasing process and handed over the credit card with Stan’s name on it. Stan looked genuinely dumbstruck.

Stan was to be allowed to spend up to £1000 per month without authorisation provided he submitted his credit card statement to Grant each month for review.

These events all happened some time ago and I bet you would like to know the outcome of this new process.

What actually happened?

Well, in the first month after implementation, Stan only spent £23.47 in total. The main reasons were that he had so many spares in his cupboards but he also knew he could go out and get all but the most expensive spares if he needed them very quickly. Within three months the new process was formalised and implemented permanently.

Six months after the introduction of the new process Stan had not spent £2,500 in total. The number of cupboards storing spares had started to reduce freeing up valuable floor space and the savings made had allowed the purchase of a new lathe.

These events are now several years old and Stan has now retired but in the last year of his employment he made a statement to me which resonates to this day. He said, “I treat the credit card like my own money now, before it was just a game”.

Get your business processes right and you will drive the right lean behaviour.

It had unfortunately become a familiar scene at the monthly board meeting, Directors squabbling over who was to blame for the company’s poor delivery performance.

“Guys, guys, please, let’s have a time out”, said Mark the MD. “Let’s just reflect for a moment, for the past six months or so we have under-performed. In some cases it has taken us 17 weeks to ship a generator when have quoted the customer 8 weeks. This can’t go on or we simply won’t be in business, its time for a change”.

Unfortunately the other 2 directors in the room were not in agreement as to what should be done, “Mark, my Sales guys are pulling their hair out, they are almost too frightened to answer their phones to customers at present because all customers seem to be chasing delivery dates. We are going to have to hire some more staff to cope”, said Phil, the Sales Director.

John, the Ops director piped up, “Phil I have told you many times before hiring more guys is not the answer, it will take months to train the guys to the standard we require. The answer has to be with your sales guys quoting customers longer lead times until we catch up. Every generator is different and we cannot produce bespoke generators as quickly as you would like us to”.

OK, OK, As I said, I think it’s time for a change”, said the MD. “I have asked one of the guys from our sister division to come in next week and carry out some value stream mapping to see if he can highlight any issues in how we work. I want a fresh pair of eyes to look over the whole process from start to finish to see if we are missing anything. It can’t hurt and we might learn something”.

“What is value stream mapping” said, Phil.

“Value Stream Mapping is a diagnostic tool used to visualise the flow of material and information through a value stream whilst identifying waste. The mapping process can be used to help design the most efficient work flow for our products. We did some of this at our sister company a few months ago and they guys there are raving about it”, said Mark.

“But Mark surely a guy from outside is not the answer, he will have no experience of our industry and will just get in the way, I think this is a bad idea, said the Sales Director.

“It’s not often I agree with Phil but I think this will just take up even more valuable time we haven’t got” echoed John.

“Sorry, I have made up my mind, he will be in next Monday. I want the two of you to brief your guys to be as open and cooperative as possible”, said Mark the MD.

When Monday finally arrived, Simon, a Lean Implementation Manager from the Generator plants sister company arrived. After the formalities and introductions were over Simon asked to see the whole process from receipt of the purchase order to despatch of the finished goods. Simon spent time with each of the people carrying out the individual processes. He took time to speak with every person carrying out each task to see if different people carried out the same task differently. He followed the flow of work and information around the company including when it looped back on itself because of errors or defects. He asked lots of questions to build up a picture of how long each task took to complete. He identified areas in the process where work (or value) did not flow as well and information or materials queued as a result. He identified areas in the process which were person dependent i.e. only one of two people could carry these processes out and if they weren’t available then the process slowed or came to a halt. Finally, after a full weeks work he was ready to present his findings.

The Directors arrived in the board room to see that Simon had pinned up several sheets of paper around the wall which showed the work flow through the company. It showed a lot of numbers and symbols, some figures were highlighted in red and the whole map looked very complicated with lines criss-crossing across the paper.

“OK, thanks for coming” said Simon. As you can see I have mapped the value stream for Generator Production. Simon spent the next 15 minutes explaining to the Directors how to interpret the map. “Value stream maps allow us to visualise the flow of work or value through the process. Symbols or Icons are used to represent items such as processes, customers, inventory, queues etc”.

Simon continued, “This map is called the Current State because it represents what you actually do today and not what you think you do. I call it a ‘warts and all’ snap shot. As you can see this all looks very complicated and contains several steps which in an ideal world you simply would not want. We call any steps which are not really required non-value adding because they simply add no value from the customers perspective. For instance these red triangles you can see on the map show you at which points work stops or queues for the next process. The numbers inside the triangles tell you how much time is wasted at these points. These triangles alone add up to 5 working weeks. Just imagine if you could reduce some of this or eliminate it altogether what a difference it would make to your lead time. Also, take a look at the number of rework loops in the process. These represent the number of times work travels back on itself because it was not completed right first time. Remember rework does not just relate to the manufacturing process. Rework can also happen in the office when incomplete or inaccurate information is passed on”.

“This all sounds quite promising said Mark the MD, but where do we start”.

“Can I suggest you break the map down into loops of activity. For instance, If you look closely at the very front end of the process you can see the sales order qualification and sales order entry process needs improvement.

“What do you mean”, said Phil the Sales Director defensively.

“Well” said Simon, “without wanting to sound too critical it would appear that the Sales Guys don’t have a standard process for detailing exactly what the customers want when they take orders. Evidence I have collected shows that they only gather between 70-80% of the exact product specification from the customer up front. Items such as colour, badging, hose lengths, couplings etc are not always discussed at this stage. Without wishing to appear controversial, it maybe that how you pay the Sales Guys bonus is contributing to this problem. As I understand it they get paid bonus on orders received and not on orders received than can go straight into you system unassisted”.

“What are you saying”, said an indignant Phil.

“I’m just pointing out the possibility that the desire to take an order is maybe currently greater than the desire to capture all of the details up front”, said Simon. “If you don’t collect all of the critical information up front this undoubtedly leads to delays further down the process when questions get asked by your engineers about the fine detail. Look at the map, can you see the number of communications going back and forward at the front end. This is all caused by not collecting as much information up front. Can I suggest you need to find a way of getting the Sales guys to tie down the specification up front and link this to their bonus. Perhaps creating a standard template of information that needs to be completed as a minimum before an order can be loaded. I suggest you put a small team together to look at this area of the process and come up with some practical improvements”.

“I like the sound of that”, said Mark, “it makes good sense, where else do you think we should be looking?”

“If we go back to the current state map for a second you can also see very clearly the amount of waiting time you have for materials. Some of this is caused by the issue we have just talked about but it might it also be sensible to re-look at the supply chain of a number of key components. Some of the commonly used parts could be put on kanban so you should always have enough around you and it might also be worth you going back into your supply chain to negotiate buffer stocking agreements with your suppliers on some of longer lead time components”.

“We have been meaning to do this for a while”, said John, the Ops Director, “I guess this just confirms we can’t hold off any longer”.

Simon continued for the next 30 minutes going over where the current state map indicated further improvements could be made.

After a period of reflection Mark said, “Its incredible really. The improvements required are right in front of our eyes but sometimes you simply can’t see the wood for the trees and it takes an exercise like this to crystalise what should be done. I suggest we get the heads of department together next week and go through this and come up with an action plan”

What happened next?

Six months later the company had not only developed an action plan but they had also improved the value stream and had created a new process (The Future State) with a number of the suggested improvements embedded. Non value adding steps had been reduced and in some cases eliminated altogether and they were now regularly delivering products to their customers in 8 weeks or less.

If your business would benefit from learning how to map your value streams, take a look at our Value Stream Mapping training course.

Darren, took a big gulp of air and walked in the main office to meet the Production Manager. He had arrived early and there was no one else in the office. His isolation only served to heighten his apprehension. Today was his first official day as a Team Leader. Whilst he had been at the company for 11 years working on the assembly line, today he was starting his new role as Team Leader of Cell 2. It was all a bit surreal and he was not quite sure how both he and his workmates would react.

When the job had originally been advertised on the company job board it was a combination of his desire to progress and his wife’s persistence that had made him apply in the first place. The interview process had been daunting enough as he had not had an interview for the best part of 11 years. He was still not sure why he had got the job rather than his colleague Jim, who has been at the company longer and could operate more of the equipment. He knew he was going to get some training but he was unsure what at this stage. His thoughts were interrupted by a tap on the shoulder. When he turned around he was greeted by Chloe, the Production Manager who had just arrived . “How are you feeling?”, she said with a smile. “A bit nervous to be honest”, said Darren. “It going to be so weird after all this time telling people what to, I just hope I am up to it”.

“Nonsense”, said Chloe, “You’ll be fine. Anyway you don’t think we are going to let you loose on the shop floor without some form of Team Leader training do you. I learnt a long time ago that you simply can’t expect a person to turn up for work one day, give them a new job title and then expect them to succeed. That is what happened to me when I first became a Team Leader. I always vowed that if I ever had a senior position in a company where I could influence recruitment policy then I would make sure all new Team Leaders and Supervisors had the right training so I have arranged for you to attend Aster Training’s Team member to Team Leader training course. It covers all of the basic skills you will need to help make you a success as a Team Leader. You will also be in the training room with people from different companies who are in exactly the same position as yourself”.

“Oh, ok, that makes me felt a lot better”, said Darren,

If you would like to know more about how Aster can help in your move from Team Member to Team Leader then take a look at our Team Member to Team Leader training course which is designed to help make the transition seamless, build confidence and gives structure to the Team Leader role.

The media often reports on how the UK lags behind a number of other countries with respect to productivity. The exact reasons for this would appear to be both varied and complex. There have been lots of suggestions from learned commentators regarding how to improve productivity. Some of these ideas have suggested that the government needs to invest more heavily in key infrastructure projects such as HS2, the road & rail networks and the creation of a third runway at a London airport. Others have concluded that improving broadband speeds, large scale adoption of the Internet of Things (IOT), Industry 4.0 and the embracing of latest technologies such as 3D printing and AI will help both SMEs and large scale multi-national organisations alike.

Whilst all of these factors have merit and may indeed improve productivity in some way I can’t help wonder whether some organisations are missing out on some of the easiest and potentially least expensive productivity gains that could be made. Indeed, I would go as far to suggest that some of these potential productivity gains are hiding in plain sight because in many organisations these opportunities go largely unnoticed because people and senior managers in particular are just too ‘busy’ focused on day to day activities and targets.

So, what are these potential gains and where are they hiding?

I am of course referring to the inefficiencies that lie in many of the processes operating within all organisations. To fully understand these potential productivity gains we first need to understand the relationship between two attributes that all organisations have in common whether they be from the public or private sector. The two attributes in question are people and processes.

People are often referred to as the major asset of any organisation but how many organisations can truly say that they fully utilise all of the skills and experience of the workforce at their disposal. People are engaged on a day to day basis in an organisation’s processes, as a result they get to know both the strengths and weaknesses of each process. In some cases they have even found ‘work arounds’ to make the parts of the process they are engaged in easier for them. These ‘work arounds’ can sometimes be very positive for an organisation albeit they are ad hoc, but they can also be negative because they may make another part of the process harder or worse still produce problems such as quality issues, health and safety concerns etc. As a result if we are to find a ‘standard way’ of operating each process which represents the fastest, safest, least expensive and most reliable way it makes sense to find a way of engaging with all staff so their ideas can be incorporated into the process where it makes sense to do so. This also encourages ‘buy in’ to the improved processes because their own ideas are being adopted.

It therefore also naturally follows that if we can get people working together across functional and departmental boundaries to optimise these processes we can then create a culture of team work and mutual understanding of each other’s needs. By making processes simpler to use and cognisant of what customer’s need out of these processes we minimise waste and optimise productivity.

So, how can Lean Leaders help?

If leaders can get their staff focused on removing the waste from their organisation’s processes by encouraging their staff to find smarter ways of working then sizeable gains could be made which will increase productivity.

Some of the most enlightened leaders realise that the many of the best ideas for improvements can come from within their own teams and they positively encourage this behaviour. It is after all part of a business leaders role to create teams working towards common goals and objectives. One of these objectives should be to create a culture where staff are encouraged to offer up improvement ideas routinely. If the ideas are deemed feasible to implement then the originator of the idea could also play a role in its adoption or implementation.

10 Tips for Lean Leaders to maximise Productivity

A leader can really help increase their organisation’s productivity by:-

• Championing cross functional teamwork improvement initiatives and demanding the same from other senior managers
• Holding regular performance reviews with their senior managers where continuous improvement is routinely discussed and measured
• Making it part of their daily/weekly routine to talk to their staff to get a real understanding of the issues faced at all levels in their organisation
• Making it known that continuous improvement is part of everyone role
• Creating a ‘blame free’ culture where failure to make a success of every initiative is not seen as a negative but rather part of the learning experience
• Providing the ‘time’ for cross functional improvement groups to meet to discuss and implement new ideas
• Making a budget available to improvement teams
• Giving their staff the necessary training on improvement tools to encourage continuous improvement activities
• Ensuring success and knowledge are shared so best in class can operate across the organisation
• Creating a kaizen culture where any improvement no matter how small is important. In other words a leader should encourage the philosophy of doing 1000 things 1% better, rather than 1 thing 1000% better.

Conclusion

There is often a lot of waste ‘hiding’ within processes which if reduced or totally removed can lead to major productivity gains. It seems to me that by using the skills and experience of the whole team to remove the inefficiencies in processes is an approach most organisations could use to help themselves unlock hidden productivity.

If you would like further information about how Leaders can create a culture of continuous improvement within their organisation please review our Lean Leadership course for full details.