Guy Parsons - Atlanta Growth Summit: Getting Lean
WEDNESDAY, DECEMBER 3RD, 2008
Making decisions seems like a very important aspect of running a business. How do you imagine Toyota answers the question: how long does it take to make a decision? Is it A. very quickly, B. As soon as they have enough information, or C. As late as possible?
If you answered C, as late as possible you’d be correct. At Toyota they believe waiting until they have all the most important information is the best time to make a decision. Getting lean is important, yet most companies will begin the process by examining their operations and processes when the process really starts at the other end of the business. As Fred Smith, Fed Ex stated, ”Two words drive the business, the promise and the process.”
The critical aspect of getting lean is focusing on what’s important to your customer. If you’re not starting there you are really missing the point.
Guy provided a good example of what he discovered at his own company, a bicycle manufacturer. He thought if he improved the lead time of his high quality bikes he would improve customer satisfaction. He decreased the time it took to produce a bicycle from 30 days to 48 hours. Remarkable right? What he found out was customers didn’t care that they could get their bike in less than a week. In fact he immediately found out how little they cared by the complaints he got. One person complained that there was no way they could build a custom bike and deliver it to her that fast. She felt cheated and that the bike was no different than any cheap assembly line bike. Another customer complained that he was a Harley Davidson person, and that getting him his bike so quickly destroyed the time he would spend fantasizing and pouring over accessories. His enjoyment of that process was ruined because now he had the bike and he’d have to make his accessory decisions faster. There were other complaints as well, yet the bottom line was this Guy hadn’t first determined what was important to his customers. They didn’t want their bikes faster, they wanted something else. Something he wasn’t aware of and hadn’t discovered first. His time, energy and money spent decreasing production had not added value to his product.
How can an outsider evaluation a lean transformation? Does each process produce only what the next process needs when it needs it? Work flow is what we are talking about here. And what you are looking at is changing the part where nothing is happening.
We all know of circumstances where a process is completed and then lies on the next person’s desk or in inventory or storage for a long period of time before it is worked on. Insurance claims are a good example. Guy pointed out that the average claim takes 26-39 days. How much of that time would you imagine is actually time spent working on the claim. If you wanted to improve wouldn’t this be a good place to begin looking.
That’s the key to improving and getting lean. Lean thinking is at the pull of the customer. It demands that you look for only what is wanted when it is wanted from the customer perspective. Be honest with yourself, do you really know that about your customer?
Every effort you make in getting lean should be about making time and work more visible. If it’s visible. If it’s being measured you can be sure that it will improve. Pearson’s Law states that, "When performance is measured, performance improves. When performance is measured and reported back, the rate of improvement accelerates."
One of the critical elements we provide clients with is a visual aspect of work through the four phases of work flow. It includes task flow, material flow, information flow and layout. When the first three phases of any work flow are laid out it is surprising to discover how quickly small incremental elements can immediately be identified as being out of place. Frequently simply seeing how the work is flowing can bring some instant recognition of changes that are needed.
Efficiency can be increased through the use of visual flow charts and objective reasoning. Yet most important is the absolute critical involvement of your people. The ones who are doing the work. In many cases they can tell you instantly what should be changed and the only reason they haven’t provided it so far is no one has bothered to ask them.
To make lean thinking work you need to involve your employees. Realize they will be skeptical. Skeptical of your commitment and of your desire to use and follow their suggestions. Imagine if you’d been doing something for an extended period of time and been finally asked for your opinion. Wouldn’t you be skeptical? Recognize this is a long term commitment. It will require dedication and sincerity to earn the trust of your people. It is not without obstacles and hurdles, and will certainly provide its share of learning opportunities. Lean thinking starts at the top.
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