Lean + lack of communication + "one size fits all" = poor outcomes

I was at a gathering recently at which several health care professionals were in attendance. They were discussing the lean initiatives taking place at several large clinics and hospitals in the area. A couple of comments made me question both the quality of the implementations and the consultants.



First, the perception of the staff at more than one of the respective facilities is that the lean initiative is solely to "speed up things." Not to eliminate waste, not to improve processes and quality, but just to speed up tasks. As such, there is a lot of resistance to the changes being recommended, questioning of the validity of those recommendations, and an attitude of this is just another "flavor-of-the-month" idea on which management spends money.



Little time has been spent educating the staff as to the purpose and objectives of the intiatives. Little time has been spent involving operational staff in analyzing work flows, doing value stream mapping, and addressing organizational change management issues. The consultants, for the most part, are doing all the work and making all the decisions.



The second set of comments concerned the recommended changes in one of the clinicial labs, microbiology to be specific. Micro is very much like a job shop or HMLV manufacturer in that it deals with a wide-variety of speciman types and tests and has multiple workcenters doing very different types of tasks. It also has its "runners," "repeaters," and "strangers." The consultants demonstrated a lack of understanding of the process requirements of Micro in two ways. First, their recommendations centered on trying to move every speciman through the same process flow. Second, and even more concerning, was a recommendation to increase the temperature of the incubators so that the "bugs would grow faster" (not a scientifically-valid recommendation). Besides making poorly-conceived process recommendations, the consultants were making totally inappropriate recommendations concerning the medical operation of the lab.



I think these two situations are good examples of why lean implementations can fail to deliver all the possible benefits they promise.

Rational Manufacturing

Mr. Prasad Velaga posted this thoughtful and insightful comment regarding rational manufacturing on the JS Lean Resource Center forum, http://finance.groups.yahoo.com/group/JSLEAN/. I hope it will inspire additional serious thought and discussion.

Rational Manufacturing, by Prasad Velaga

As everyone knows, Lean identifies and eliminates the things that add no value to the customer. What is this value (to the customer) in terms of our traditional metrics of price, delivery and quality, particularly when different customers give different weights to the metrics? For example, one customer may allow a long lead time with an emphasis on price subject to some minimum quality requirements. Another customer may say,"price is no problem but I want the product immediately." Should we not change the measurement of value based on customer preferences mainly for job shops with diverse customers? In my view, the value to the customer is the weighted sum of the three metrics, which is a composite measurement.

Ultimately, the elimination of the so called "waste" must clearly result in the improvement of at least one of the three metrics without adversely affecting the rest. How can we take advantage of the variation in the value to the customer? Human aspects (like work culture), practices, logistics, quality programs,product innovation, process technology and the management all have impact on the value delivered to the customer. For any organization, the individual impacts of these elements on the value to the customer vary with situation, that is, the marginal gains from the improvement of the elements vary with company situation. Imagine an n-variable mathematical function that maps all these elements to their net outcome. The derivative of this function with respect to any variable changes with the point (situation) and the derivatives are not the same for all variables at any point. Therefore, we need to know which variables we must change at any point (in any given situation) for significant increase in the value of the function. Some of these like better practices, worker involvement, 5S, etc can be improved without much expenditure as part of the culture transformation while some involve certain cost. The effort, time and cost that can be put on these elements are limited at any time.



It is possible in some cases that a well-managed company fails to see big improvements in the value (composite measurement) to the customers by religiously implementing TPS. In my view, we need to progress from lean manufactuirng to rational manufacturing that focusses at any time on the most effective elements of improvement in additon to the universally beneficial drive for better work culture.

Mass customization and high-mix low-volume manufacturing - a few thoughts

Adopting mass customization means grappling with a high-mix low-volume (HMLV) manufacturing environment. This can be quite a change from mass production models. Routings can become more complex, lot sizes may be in units of 1, scheduling a challenge, and so forth.

In this high-mix low-volume model, the quality of the information transmitted to the shop floor becomes even more critical. Format, content, even quantity of data supplied has a magnified impact on productivity. All too often, unfortunately, this key element of production is overlooked. ERP and other systems control the transmission of an order to manufacturing, but the content of that order may be a combination of drawing types and manufacturing instructions all of which is unique to that specific order. Absolute consistency of manufacturing order information is not possible, virtually by definition.

One of the principles of mass customization is that internal systems should mirror the concept of providing a unique product to the customer based on standardized components. That is, internal systems should be comprised of standardized processing components that are combined uniquely to fit the needs to the order. This principle also applies to information components, such as manufacturing orders.

I think applying this principle to internal systems is much harder than adopting mass customization as a way of creating unique product for customers. The success of being able to do so, however, is the true indication of whether a company has successfully adopted mass customization as a business model. I also think that this application of mass customization principles to internal systems is where the traditional job shop can benefit from MC.

I intend to publish a white paper within the next several weeks that delves into these issues of mass customization, high-mix low volume manufacturing, and job shops in more depth. If you have any experiences or comments in these areas that you'd care to share, I'd be very pleased to hear them.

Mass Customization resource list

I have put together a list of resources that I've found very useful for Mass Customization.


You may review the list at the Valent Group website, www.valent-group.com, or click here for a pdf version: Valent Group Resource List


If you have any suggestions for additions to the list, please let me know.

JobShopLean

As a company adopts mass customization, it will find its manufacturing process moving more to a high-variety low-volume (HVLV) production model. TPS (Toyota Production System) Lean does not adapt easily to HVLV. JobShop Lean is a response to this situation.

A great resource is the JobShop Lean discussion group, http://finance.groups.yahoo.com/group/JSLEAN/, moderated by Dr. Shahrukh Irani of The Ohio State University.

The JobShop Lean 2007 Conference, http://iwse.osu.edu/isefaculty/irani/jobshoplean2007.htm, will be held Dec. 11 - 13 in Columbus, Ohio.

Finally, the results of some of Dr. Irani's research can be found with the PFAST tools, http://ceti.cse.ohio-state.edu/pfast/index.php.

Welcome!

I'm very excited to start this blog about issues related to Mass Customization in industrial and construction environments. I've seen steps in this direction since the mid 80s, yet just now do I feel it is gaining traction. Based on my experience, this is an important business model for construction companies and manufacturers in a variety of industries. It is not well-understood, however, and can present significant implementation challenges.

I hope you find these thoughts interesting and useful.