Author: Adam Payne

“Performance Rooms” a powerful Visual Management Tool.

Posted on by Adam Payne

Over the last few months I had a number of discussions regarding what I call “Performance Rooms” others call “War Rooms” (never really been keen on that expression but as long as the process is followed what does it matter) or the Japanese term “Obeya Rooms”. I will use Obeya in this article.

These rooms and the disciplined approach to the process behind them helps businesses to reach their strategic/tactical goals and promotes the creation of solutions and actions that can be developed and implemented quickly. The aspect of Managing Performance Improvement for any business undertaking Growth or Lean.

Strategy Room

The following is an overview to understand the theory behind it.

Obeya is based on a simple idea that we dedicate: time, space, the coordination to root cause analysis and problem solving so that organisational barriers are minimised. This ability to maintain a disciplined approach to real-time problem awareness, listening to team members concerns, making discoveries, resolving problems, collaborating and above all developing/mentoring our people is critical to the success of a business.

They promote the coordination and implementation of Strategic and Tactical issues by mobilising and pulling together the intellectual resources of all employees in the service of the firm.

The following are different types of Obeya Rooms (not limited to):

Product Launch; when developing a new product, managers responsible for decision making in design, production engineering, and manufacturing gather in one place to shorten the lead-time through real-time problem resolution.

Business Process Layout: Centralised data collection, prioritising and action planning.

Focused: Project Performance Rooms, SQPDC, A3 Problem Solving, Continuous Improvement rooms.

Observations to consider when looking at Obeya Rooms :

  • Use two colors when tracking status, Red and Green. This avoids ambiguities; the status is ON TARGET or NOT.
  • Define SMART metrics (Specific, Measurable, Attainable, Realistic, Timely), no more than 3-5 focused metrics as more would be impractical for every day review.
  • Problem, Follow-Up and Countermeasure Boards are mandatory, the team must be prompted to solve issues immediately. The deferment/stalling to solving the problem is not allowed.
  • Meeting Discipline – Punctuality, Question and Challenge with dignity and Respect and the meeting should last no more than 30mins.
  • The flow for review takes the shape of Check, Plan, Do, Check, Act instead of the normal PDCA.

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Less Can be More in Report Writing – telling the Story Using an A3 Report.

Posted on by Adam Payne

Some contacts asking about A3 Problem Solving, I thought I would do a quick overview.

Problem solving is about thinking, but writing things down can help thinking as well.

Using the A3 process we can document key information and decisions each step of the way which can then be shared with others, to get input, and make modifications by using that input.

Why A3? Originally it was because much of the communication across Toyota (the various sites and nations) was by fax, and this was the largest size paper that could fit in a fax machine. (Amazing how some things materialise)

A3 Problem Solving Template

The key fundamental about A3 reports is not the format or the finesse with which you fill in the different sections which fancy drawings, charts etc. It’s the COMMUNICATION process. The A3 is fundamental to the process of problem solving and decision-making. It allows the most critical of information to be shared with your business or businesses for others to evaluate on the thought processes used and as a means for requesting support and advice, which in turn aligns everyone in the organisation on how the A3 will move forward.

The above image is a typical layout (not set in stone though, as previously mentioned the format is not the point), but it highlights the different stages and guidelines for completion.

For anyone interested contact me and I’ll send the guide and some examples in PowerPoint format. My personal opinion is use paper and pencil for a start.

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We’re different it won’t work here

Posted on by Adam Payne

It’s been an interesting month, great meetings, new contacts and one of the most interesting presentations I‘ve given regarding Operational Excellence and Problem Solving.

The presentation was given to the Manufacturing and Construction sectors as part of a Seminar/Workshop.

The comments at the end we’re ones I have heard over and over again, “We’re Different, it won’t work here!”

Is “we’re different” an excuse not try to improve?

This got me thinking in one of my reflective moments, what is it that naturally creates this push back? Do we think that Business Excellence, Operational Excellence, Lean or Six Sigma is a technical tool and technique, only applied to manufacturing, high volume processes, etc? Is it we naturally assume that it’s for the automotive industry?

There are a number of answers you can come up with that can be assigned to this emotion and push back.

So we have to ask ourselves

Do business improvement principles (as that is all they are) apply to pretty much every process? Yes, I’d say so. Does that mean its easy to put in place? Absolutely not. But that, along with being different, should be no reason to not try.

Which leads me on from last month’s article REFLECTION! and into OPERATIONAL EXCELLENCE TRANSFORMATION

We must first seek to understand what is it we are trying to solve, what problem? This could be as an organisation, function, sub-process.

Then we must ask,

What process improvement needs to be done? What do I need to design, re-design, improve to solve our problem and achieve our objective?

Next,

Do I have the capability in house? Do I have the skillset within my team?

We then come to,

What mindset do I need to have? Growth? (One of learning as we do not have the capability in house), Implementation (I have the capability so execute, or get support if you don’t), Experimental (try and test)

Remembering that Leadership behaviour and Programme Management are the key. The governance process you apply.

Final thought – it’s often said that “Operational Excellence doesn’t succeed or fail… it’s just a set of principles. What succeeds or fails is the organisation or the leaders who try.” Success isn’t guaranteed — it requires hard work and creativity to figure out how will work in your setting, because you are different!

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Reindustrialising Britain.

Posted on by Adam Payne

Just reading though an article (again) in the UK Manufacturing Review and felt compelled to quote James Selka (CEO of The Manufacturing Technologies Association).

I have to say James is spot on with his comments.

“We are living through an explosion in the potential of technology, and it provides a most wonderful opportunity to reinvigorate the manufacturing sector in the 21st century.”

“Manufacturing is remarkable because of the multiplier effect that the sector has. It is so complex, and touches so many other sectors, that activity in it acts as a stimulus to the economy as a whole.”

“As technology becomes more central to the process of manufacturing, the cost of labour – the rationale for much of the offshoring that took place – is a smaller and smaller proportion of the cost of manufacturing activity. Labour cost becomes less of a driver…”

“This is not just about what others can do for us, but what we – UK Manufacturing – can do to help ourselves”

Extracts taken from the UK Manufacturing Review 2015 -16 (Stirling Media).

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How Good is Your Factory? Are there Opportunities?

Posted on by Adam Payne

It’s easy to feel like a factory tour is something that happens once every couple years, but in reality it’s something that should happen every day.

When you walk your factory floors there are nine items to get an accurate first impression of how lean you are.

1. Work Stations?
Are they clean, organised, free from unnecessary material and equipment?
Are tools organized, identified and easy to find?
(Are 5S’s in place? Visual labeling? Is the factory well lit? Is equipment clean? Supervision and support personnel on shop floor? Metal on metal contact? Safety hazards? Debris on the floors? Check out the bathroom cleanliness.)

2. How many Monuments do you see?
Monuments are massive machines anchored to the deck, not easily moved to which material has to be delivered to, can cause issues with the flow of product (lack of flexibility)
Are they still in use? Not to be confused with age, often older machines are purpose built and give us flexibility in cellular manufacturing. Can machinery, material locations, drop offs be easily rearranged?

3.Work in Process?
Are there piles and piles of Work in Process (WIP)? Has some of it grown roots, celebrated its 1st, 2nd even 3rd birthdays? Does it have any paperwork? Do you have HOT items?
In the ideal factory you should only have the WIP you are working on and its classed as Standard in Process Stock (SIPS) in my eyes as it is controlled.

4. Can everyone see if they are on Target or Behind Schedule?
Hour by hour monitoring, or close to real time as you can get. Can you see the Abnormal from Normal? Use Red and Green to distinguish. Is abnormal recorded for root cause corrective action?

5. What other Metrics do your teams have?
What charts, graphs, objectives, are posted in the area? Are they a Standard Document? (revision controlled, time and date stamped)
Are the Metrics up to date, reviewed, actioned? Again are they on Target? Can you see the Abnormal from Normal easily?

6. Are Materials delivered to or stacked at the Point of Use?
If a worker loses a component (screw, nut, rivet) do they have to go to the stockroom? Ask yourself how are items replenished? Does the replenishment depend on a crane or forklift?

7. Does the Product Flow?
Through a cell, moving line or in large batches or lots? Are associates close together, can they talk to one another, see one another’s WIP, do they help each other out if something goes wrong?

8. Look at the Testing and Inspection?
Where is the Product inspected and tested? Do the associates do most of the inspections or does the product move to another area? Do you have large numbers of inspectors? What is your inspection backlog? Are your defects recorded, reviewed actioned? Are they reducing?

9. Ask! Talk! Communicate! Question!
The biggest and most important. Show dignity and respect at all times, question and challenge, talk to the people on the front line and ask why? Understand? Use your senses.
This list is not definitive and its definitely not just for manufacturing, you apply to all functions, businesses, sectors, industries. Now Go Look See!

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Manufacturing Websites, to web or not to web?

Posted on by Adam Payne

Recently I started a discussion regarding SMEs and their websites, the discussion started with this quote “an interesting observation this week whilst working, how many SMEs lack an all singing all dancing website. What’s the reason, with 90+% of people now looking on line this should be a priority.” Now all singing all dancing to me means bringing a Return on Investment. Here some excellent extracts and comments from the people involved, I’ve tried to get a balance within the discussion, and this is not my area of expertise.

Ashley Pearce: “In research I conducted recently an overwhelming number of those involved with Business Development in the UK Manufacturing Sector didn’t understand the actual function of a website.
Where does it fit in? Is it just a standalone item? Is it our “Digital shopfront“? Is it relevant in our industry?
These were common questions that we arrived at after a short discussion with most. It’s what inspired a number of articles explaining the “System of Modern Sales & Marketing” over on the Manufacturing Network UK Blog.
Fundamentally a Website is often NOT, but SHOULD be seen as, “Part of a System” for attracting, nurturing and converting leads into customers. Can you see the many ways your website & web presence CAN contribute to the system?”

Ashley Pearce: “For me, the most effective way to explain how a website “Fits in” has been to direct them towards the subject of “Inbound Marketing” – with FAIR WARNING. As we say over on the Manufacturing Network Blog almost weekly, “Wear Your Manufacturing Industry Blinkers” when reading anything about marketing your business online.

Most of the information, content and articles out there explaining how it works is NOT written for you, the UK Manufacturer. I think this is why an Integrated approach to Online Marketing and Offline Sales for UK Manufacturing has been very slow to evolve. Lack of “Context” – Explained in the UK Manufacturing Industry context, we may start to see some savvy marketers leaping ahead of the competition”

Garry Taylor: “There is a feeling that unless you can get on the first 2 pages of Google there’s no Point having a Web page. as we don’t actually do sales transactions over the Internet we view as an online brochure with the blog giving any up to date info and an opportunity for feedback plus, small companies are being pushed to pay per click. Everyone knows most people clicking on your sight are not buying so you pay for nothing.”

Richard Stinson: “I spent many years in the engineering sector, from toolmaker to technical sales and I had the privilege of working directly and indirectly with many SME’s as well as the giants like Rolls and BAE. I came to realise quite quickly that the big boys have regular web trawls looking for potential suppliers, just in case their current suppliers let them down or become swamped with work. They literally have a file of reserve suppliers on their list found online. The moral of this story is that unless the SME’s had an effective web presence they were overlooked for many of these lucrative contracts.”

Alan Kent: “Whilst I can appreciate that having a web site might bring you some business, not having one will definitely bring you none. I do feel that it is becoming a bit BS5750-ish though as having a fancy web site costs money that many SMEs would rather channel into capital equipment or a decent salesman who will definitely generate revenues. I can recall putting in a lot of effort into attaining BS5750 in the 1990s which cost a lot of time and money and brought in no sales leads whatsoever. At the time no-one had realised that it was simply a way of showing that you had a process and was never expected to generate leads but without it, you would definitely get no leads.”

Chris Davis: “There are loads of things you can do here. Small web site intelligently constructed .. put stuff on eBay and Amazon have a blog use social media .. Wiki presence .. the list goes on but none of these are difficult or really expensive. It’s not an option to not have a cyber presence?”

Jeremy Wisner: “The topic concerns the need for an ‘All singing/dancing’ website. For many SMEs, operating in specialist niches, it is questionable about the return on such a site. Absolutely, a solid and informative web presence is a must (largely for contact information and credibility). However, it is in the nature of many niche-SMEs that they will know who their potential customers are and will be cultivating B2B relationships via more direct approaches, rather than hoping to WOW website visitors. Niche products and services, by nature, often require specialised knowledge to explain to USP to potential buyers. Of course, retail is a whole different discussion.
90%+ will look online, yes. However, I’d argue that for the niche players, the hard yards have already been covered by the ‘song and dance’ created offline – backed up by effective SEO work – which again strengthens credibility.”

Adam Payne: “Disagree with you Jeremy, when I look at the SMEs including two that we were looking to acquire in a niche market, had limited website presence and no sales and marketing function, relying on word of mouth and guess how they were performing. If you are looking to expand your business you need an online presence, again as an example, recently I was supporting a company to try and source stretch forming, the search was not easy due to again lack of online presence and SEO setup, I ‘m sure to god there are businesses in the UK, but they missed a big opportunity. Now this is not my area, but if you are happy as a business then you stay as you are, but rest assured someone will be around the corner waiting to pounce if you are not bringing in customers, if you are looking to expand you need multiple marketing pillars and a top website is one of those with an inbound marketing approach (blog showing expertise, contact form with call to action, etc).”

Ashley Pearce: “This discussion thread has done a great deal in exposing the core beliefs that sit behind the reason / purpose / ultimate aim behind a website for a B2B Sales focused business.

The purpose of a website for B2C or retail is completely different. The website can have more to do with sales and sales fulfillment than it can with building the confidence of a prospect and developing a relationship.

Just because they look the same on the outside and are accessed via a web browser does not mean they are the “same thing”.

Fact 1: You are not going to receive sales through your company website in the manufacturing industry. You’re not selling products, you’re selling capability.

Fact 2: Buyers do their searching a researching online before EVER reaching out and asking for information, requesting a quote or expressing interest.

Lesson: If your website doesn’t start a conversation with the Buyers and Engineers visiting it, you will be overlooked…”

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Overall Equipment Effectiveness

Posted on by Adam Payne

A Good Place to Start for Productivity Improvements

OEE (Overall Equipment Effectiveness) is one of the main measures I use within a Manufacturing Business, but it can be adapted to service as well.

  • Does your production have bottlenecks you’re not aware of?
  • Could one machine be dragging down the entire facility?
  • Do you know if your equipment has excess capacity that could be easily and inexpensively tapped?

Overall Equipment Effectiveness Losses

OEE is simple and practical. It takes the most common sources of productivity loss and places them into three primary categories, it distils them into metrics that are an excellent gauge for where you are now and more importantly where you need to improve. There are other forms of effectiveness calculations for the supply chain, these are explained at the bottom of this article, but for now it’s back to OEE.

How we make O.E.E work?

  • Must be easy to use
  • All data must be accurate
  • Data must be easy to collect
  • Must involve all cell members
  • You need to react to the results

The three categories being:

  • Availability (%) – The percentage of the planned production time during which the cell could be productive.
  • Effectiveness (%) – The percentage of planned production time during which the cell was actually productive.
  • Quality (%) – The percentage of the total shift time that a cell is producing quality components.

For the Ultimate Productivity Swipe File – ‘click here‘

So how do we calculate OEE,

Availability

Total Shift Time – Planned Non Productive – Breakdowns – Changeovers – waiting / Total shift time – Planned Non Productive

Effectiveness

Total Parts Produced x Cycle Time / Total Shift Time – Planned Non Productive – Breakdowns – Changeovers – waiting

Quality

Total Parts Produced –Scrap/Rework / Total Parts Produced

Overall Equipment Effectiveness Template

These three primary categories (as a percentage) multiplied together = OEE.

Example,
Total Shift Time 600mins
Planned Non Productive 60mins
Total Downtime 0mins
Waiting 20mins
Total Pats Produced 395
Cycle Time 1min
Scrap 89

Availability = 600-60-20 / 600-60 = 520 / 540 x 100 = 96%
Effectiveness = 395 / 520 x 100 = 76%
Quality = 395-89 / 395 = 306 / 395 x 100 = 77%

OEE = 96 x 76 x 77 = 56%

There are different ways to use the calculation within the supply chain, the following are examples

Goods Inwards

Components Available for use X On time Delivery Performance X Quality of Incoming Goods

Outgoing Performance

Customer Availability of Supplied Goods X Delivery Performance X Quality of Shipped Goods

Overall Supply Chain Effectiveness

You can also measure the supply chain from a Quality, Cost, Delivery point of view as well using OEE, OLE (Overall Logistics Effectiveness) and OPE (Overall Purchase Effectiveness) these three multiplied together forms the Overall Supply Chain Management Effectiveness.

World Class OEE

Rule of thumb states that World Class OEE levels are 85%. But industry average is spoken about at 60%, so room for improvement. How’s yours?

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Managing the Product Lifecycle: Forward Planning for Business Longevity

Posted on by Adam Payne

What is the product lifecycle?

Many of us have heard of the Boston Matrix, “cash cows” “rising stars” and so on, however whilst we understand the principle do not build it in to our day to day business. Managing the product lifecycle and using your understanding of this to ensure the longevity of your business is critical to long term success.

For each of our products and services, we should have a thorough understanding of where they are in their product life cycle, is the market for them still growing and developing, is it at its peak or is it already in its downward spiral? We should also have an understanding of what this means for the future of our business, if the product or service which we rely on to make the majority of the profits in our business is on a downward trajectory, that spells trouble and we should be focusing our efforts on other areas of our portfolio and product development.

Determining your place in the product lifecycle

Here are 3 questions you can use for assessing your products and services using the product lifecycle;

What pattern are you seeing in your sales? Are they rising, stagnant or falling?

What are your profit margins doing? Are they rising, stagnant or falling?

How profitable are you products and services? Which ones make you the most money?

Use the answers to these three questions to prioritise your product/services when you are allocating resources. By resources I mean time as well as money. If you have a product or service which is extremely profitable and has a growing market, this is where you should be spending your time, not on one of your older, potentially “classic” products which no longer has a stable market. This may seem like common sense but it can be incredible hard to be that brutally honest with yourself and your business and let go of the products or services that you are emotionally invested in. Use the numbers and the patterns to drive your behaviour, and be brutal about it! If you need help our Business Accelerator Programme might be of interest.

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The Process of Improvement for any Business

Posted on by Adam Payne

Standardise

In standardising a process you want to be able to see the Abnormal from Normal conditions. When the process is disrupted by an obstacle or issue, you can see it. The Standardise, Do, Check, Act cycle.

Stabilise

Now you can begin to systematically simplify, Combine, Eliminate the issues to Stabilise the process. Whether it’s achieving TAKT, a cycle time, changeover, order entry, bid-no bid process, etc. The Plan, Do, Check, Act cycle.

Standardise and Stabilise play off of one another. (and you must be applying the rigorous PDCA management process as a business, if you can’t do that or sustain it ultimately you will fail)

Optimise

The drive towards perfection should always be sort within our processes across all functions, departments, businesses. This is optimisation, in driving for continuous improvement. Once we have standardised and stabilised our processes internally we can also start to look externally within our supply chain and support the SDCA and PDCA within those businesses that are struggling, remember we want a way of understanding the Abnormal from Normal conditions, no reason we can’t apply that in measuring our supply chain and why not pass on the learning, we all benefit. (and I don’t mean how some OEM’s have applied this before, internally a mess but let’s concentrate and beat up the supplier, short termism!)

Optimise also goes hand in hand with Grow in my eyes, all of the improvements align to our Strategy, and our Strategy will have new business, innovation in our products, so optimise and utilise all of those resources to ensure future growth.

Grow

Apply the SDCA, PDCA into Sales and Marketing processes. Integrate the tools and techniques of Lean Manufacturing, Operational Excellence with the proven sales methods and drive sustainable increases in sales performance and profitability.

In improving the efficiency of our company’s sales processes, we enable the sales and Customer facing teams to reduce waste and duplication and free up much needed Customer contact time in the sales cycle creating greater customer value.

As the orders come in, we come back to our Standardise and Stabilise cycle and the cycle repeats.

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Leadership Alignment

Posted on by Adam Payne

Leadership teams still operate in silos. Commercial don’t talk to operations and vice versa, individual objectives are not aligned to the business needs, Quality stands alone. Your business may have a company vision but is this realised/disseminated throughout the organisation and most importantly of all, is your leadership team aligned to it.

Creating a clear company vision is key to your organisation’s success, but how do you make sure everyone on your leadership team agrees? Now this doesn’t mean that your team need to get on together but it does mean they are fully focussed and completely in agreement on what needs to be delivered.

Make sure everyone on your leadership team is on the same page with a crystal-clear vision for your organisation by AGREEING on the answers to these questions. REMEMBER AGREEING AS A TEAM!.

This walk-through helps your team clarify and agree on your company vision and priorities.

 

What are your Core Values?

What are the 3-5 characteristics that define who you are as a company, culture and leadership team?

 

What is your Focus?

What is it your business excels at? What is its core competence? What’s your purpose?

 

What is your 10 year Vision?

What is the goal you are all working towards? What does the finish line look like?

 

What is your Marketing Strategy?

Who is your ideal target market? What are your Unique Selling Points you need to tell to the world? What is your proven process for doing business with your customers? What’s your guarantee?

 

What is your 3 year Strategy

What is the Revenue, Profit and Measurable goals (remembering KPI’s drive behaviour so make sure you have the correct ones)? 3-5 bullet points on what your business will look like in 3 years.

 

What is your 1 year plan?

What IS the plan, what are the 3-7 most important things that must be done within the next 12 months? (Less is More)

 

Quarterly Milestones

What are the most important things your team must do in the next 90 days to ensure they hit the 1 year plan to put you on track to make your 3 year Strategy a Reality?

 

Implement a governance process to ensure execution.

Give time, Space and co-ordination of problem solving so that the organisational barriers are removed.

REMEMBER AGREEMENT AT EVERY QUESTION BEFORE YOU MOVE ON

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