Guy Parsons - Atlanta Growth Summit: Waste Hides Waste
MONDAY, DECEMBER 1ST, 2008
There’s a lot to be learned from the concept of lean thinking. Without doubt one of the most successful companies in the world, Toyota, is better at it than anyone else. Guy Parsons is the founder of Value Stream Solutions (www.valuestreamsolutions.com) which provides lean consulting.
Guy offered a lot of valuable information. Once again it was like drinking from a fire hose. So let’s start with what lean is. The definition he provided: Deliver the most value from your customers’ perspective while consuming the fewest resources. It’s a pretty simple definition and yet here is why this is so hard to do. Most of us don’t know what the customer values most.
So what do most companies do when starting lean thinking, they begin to work on getting lean, finding ways to save money or do it better. Instead they need to begin by finding out what the customer values most. Invite customers to tell you where the friction of doing business is with you. Find out what they value most and then only after you determine what’s important develop your lean approach. All the other ideas that Guy offered will not add the value they can if you don’t first appreciate and understand what the value your customers desire most.
So suppose you’ve figured out what your customers’ value most. What’s next? You need to understand what waste is. And once again it is from the customer’s perspective. Waste is elements of an activity that do not add value from the customer perspective. This should make sense to you. If it doesn’t add value from the customer’s perspective then what is it adding? Cost and time. So waste is really a symptom rather than the root. Waste can be:
· Material Movement
In fact in the last case people having to fix their own problems is a major problem in most businesses.
If you are planning to increase production and you haven’t fixed your waste problems, what are you actually producing – more waste. Parsons pointed out that forcing more work through only increases output without addressing waste causing waste and incidental work to grow. Most businesses will look at their situation and say we have a lot of work to do and get busy producing more, they don’t have time to look at the system. The problem is that in this equation while you produce 33% more value you also increase waste 66% more waste.
Simply producing more isn’t the answer. Producing what you are now more efficiently in fact may be the answer.
Toyota is a leaning machine and that Parsons says is the core reason they are better.
Getting lean takes an attitude. It requires the hearts and minds of your people. Parsons called it a firefighter mentality. It requires a long term approach that takes a minimum of 3 years to implement and follows three distinct phases. At the core of its success at Toyota is involving its people. It’s critical that this is understood since in many ways it recognizes a fundamental principle that Michael Gerber’s E-Myth Revisited pronounced. Mr. Cho, Chairman Toyota said this, “Brilliant process management is our strategy. We get brilliant results from average people managing brilliant processes. We observe that our competitors often get average (or worse) results from brilliant people managing broken processes”
Next blog I’ll discuss the decision making process at Toyota. How long do you think it takes Toyota to make a decision? The answer may surprise you.
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