Michigan Lean Consortium Lean 103 Leading Leaders The

Michigan Lean Consortium Lean 103 Leading Leaders "The best way to predict your future is to create it!” Abraham Lincoln

v. Welcome And Introductions v. MLC Overview v. Red Bead v. Gemba walks v. Gemba walk at Subway v. Long term Lean planning and Hoshin v. Leaders Standard Work v. Culture change and employee engagement systems v. Wrap Up Dennis Sergent 517 -285 -5500 dsergent@srgnt. com - 07/09/2013 - Page 1

Introductions Count off Go meet others with the same number! Learn: • What they want to get out of today • One hobby that they enjoy • What Lean means to them in their daily job Dennis Sergent 517 -285 -5500 dsergent@srgnt. com - 07/09/2013 - Page 2

Lean 101 -102 -103 Detailed Topic View Lean 101 History House Lean How it differs 8 Wastes Standard Work PDCA/PDSA Poke Yoke 5 S Kaizen Auditing Lean 102 Value stream Mapping Kanban Heijunka SMED Visual Management One-Piece Flow Facilitation Lean 103 Red bead – systems thinking Hoshin Planning Gemba Walks Daily Employee Engagement Leader Standard Work

v. Welcome And Introductions v. MLC Overview v. Red Bead v. Gemba walks v. Gemba walk at Subway v. Long term Lean planning and Hoshin v. Culture change and employee engagement systems v. Leaders Standard Work v. Wrap Up

2014 Overview

Our Mission Offer diverse educational programs and workshops on lean topics that promote sharing of innovative practices, networking and fostering a sustainable advantage for Michigan’s public, private and educational organizations. 6

What We Do Knowledge Sharing Events • • • Training Expert Speakers Leadership Panels Knowledge-Sharing Networking Lean Leadership Training with Dr. Jeffrey Liker Benchmarking Visits • “Go and See” learning • Front line and Leadership Q&A Micron Manufacturing Benchmarking Visit 4

What We Do Annual Conference • • Keynote speakers Breakout sessions Industry roundtables In-depth training Andy Dillon Lean Projects • State of Michigan • City of Detroit • Center for Financial Planning Michigan Lt. Governor Calley 5

What We Do Annual Healthcare Symposium • • Keynote speakers Breakout sessions 5

Who We Are Jim Manley, Dennis Sergent, Dave Kippen Vice Chair G. S. Clarke, President • • • Eric Walters Mike Taubitz, Secretary Betsy Williams Debra Levantrosser, Ad Hoc Member Rich Wolin, Ad Hoc Member Jessica Jannaman Current MLC Board of Directors Formed in 2008 Non-profit, all volunteer run by committees Our vision All public, private and educational organizations in Michigan are at the benchmark level of efficiency and competitiveness. 6 10

Our Members • • 500+ and growing All across Michigan Novice to seasoned practitioners Health care, education, manufacturing, energy, consulting and more • Both individual and organizational membership 6

Join Us! • Affordable • Access to organizations, leaders and best practices • Monthly Events & Annual Conference • MLC-sponsored Projects • Networking 7

Get Involved! Visit www. Michigan. Lean. org Connect on Linked. In Like us on Facebook Join a Committee Suggest Event Topics 8

Upcoming Events November 21: Visual Stream Mapping, Event by Amway Ada December 5: Year End Event and Networking Reception Troy Please let us know if you have ideas for an event or have an interest to be a host. Email: register@michiganlean. org 9

Reminders üPlease return your name tags and lanyards at the end of the event üPlease complete the survey that will be emailed to you! If you complete the survey you will receive a Certificate of Attendance. THANK YOU Your support and feedback helps us to continually improve! 10

Introductions/Announcements Your feedback is important to us! ü During Introductions please let us know if you have any Job Opportunities in your organization. ü Reminder that we can also post the opening on our website. Email us at coordinator@michiganlean. org with the details. 11

Thank You To Today’s Sponsors! 12

v. Welcome And Introductions v. MLC Overview v. Red Bead v. Gemba walks v. Gemba walk at Subway v. Long term Lean planning and Hoshin v. Leaders Standard Work v. Culture change and employee engagement systems v. Wrap Up Dennis Sergent 517 -285 -5500 dsergent@srgnt. com - 07/09/2013 - Page 18

The Red Bead Experiment Dr. W Edwards Deming

White Bead Production Corporation JOB POSTINGS 4 Willing Workers. Must be willing to put forth best efforts. continuation of job is dependent on performance. Educational requirements minimal. Experience in pouring beads is not necessary. 2 Inspectors. Must be able to distinguish red from white, able to count to 25. Experience not necessary. 1 Inspector General. Same qualifications as Inspectors and have a loud voice. 1 Recorder. Must write legibly, good in basic math be sharp

White Bead Production Corporation Procedure WBD-HT 81 -C: White Bead Generation. 1. Required Tools: Paddle, for retrieval of beads. 2. Required Materials: Container with beads.

White Bead Production Corporation Process Steps 1. Ensure paddle holes are empty of all beads. 2. Grasp the paddle by the handle. Ensure that the holes are orientated facing upwards. 3. Slide the paddle down into the beads until paddle is covered with beads. Pick up paddle to 4 inches above the bead level. 4. Tilt paddle at a 47 degree angle to release excess beads. 5. Withdraw paddle, ensuring that one bead is in each hole. 6. Present to Quality Control for count of beads produced. 7. Empty paddle back into bead container.

White Bead Production Corporation Do it Right the First Time!

White Bead Production Corporation Take Pride in Your Work!

White Bead Production Corporation Procedure Compliance Is Mandatory.

White Bead Production Corporation The Goal is 0

White Bead Production Corporation The Goal is 1

Lessons Learned ü It's the system, not the workers. If you want to improve performance, you must work on the system. ü Quality is made at the top. Quality is an outcome of the system. Top management owns the system. ü Numerical goals and production standards can be meaningless. The number of red beads produced is determined by the process, not by the standard. ü Rewarding or punishing the Willing Workers had no effect on the outcome. Extrinsic motivation is not effective.

Lessons Learned ü We can use statistics to create a quality control chart and look for problem areas and to predict future performance. ü A faulty item is not a signal of "special" causes. A process can be stable, in-control and be producing 100 percent defective items. "Defects" are defined by specification, not by process. ü Rigid and precise procedures are not sufficient to produce the desired quality. ü Keeping the place open with only the "best" workers was acting on "superstitious" knowledge.

Lessons Learned Management was "tampering" with the system by rewarding and punishing the Willing Workers. )People are not always the dominant source of variability. ü Slogans, Exhortations and Posters Are At Best Useless To The Willing Worker. ü

Lessons Learned Thoughts from a Willing Worker named Ann. A Willing Worker named Ann, after the experiment on the Red Beads came to a close, expressed to Dr. Deming some provocative thoughts. She wrote her thoughts down in the following letter: “When I was a Willing Worker on the Red Beads, I learned more than statistical theory. I knew that the system would not allow me to meet the goal, but I still felt that I could. I wished to. I tried so hard. I felt responsibility: others depended on me. My logic and emotions conflicted, and I was frustrated. Logic said there was no way to succeed. Emotion said that I could by trying. After it was over, I thought about my own work situation. How often are people in a situation that they can not govern, but wish to do their best? And people do their best. And after a while, what happens to their drive, their care, and their desire? ”

Dr. W. Edwards Deming: 1900 - 1993 The Deming System of Profound Knowledge 1. Appreciation of a system 2. Knowledge of variation 3. Theory of knowledge: 4. Knowledge of psychology Once the individual understands the system of profound knowledge, he will apply its principles in every kind of relationship with other people. He will have a basis for judgment of his own decisions and for transformation of the organizations that he belongs to. The individual, once transformed, will: • Set an example • Be a good listener, but will not compromise • Continually teach other people • Help people to pull away from their current practices and beliefs and move into the new philosophy without a feeling of guilt about the past. "

v. Welcome And Introductions v. MLC Overview v. Red Bead v. Gemba walks v. Gemba walk at Subway v. Long term Lean planning and Hoshin v. Leaders Standard Work v. Culture change and employee engagement systems v. Wrap Up Dennis Sergent 517 -285 -5500 dsergent@srgnt. com - 07/09/2013 - Page 33

Lean Leaders lead in a very different way • By setting the vision (more why than how) – with dialogue, Policy Deployment (Hoshin) – and setting challenging expectations at the individual level • By building systems and processes that cascade responsibility – Standard Work, Kaizen, Kanban, Stop-the-Line (Andon), 5 S as tools that truly empower – Learning, Development & Hoshin as broader systems • By influence and example – by demonstrating knowledge of the whole system – by getting into the messy details on the shopfloor – by coaching and teaching • through PDSA-PDCA cycles of learning & improvement • through questioning Dennis Sergent 517 -285 -5500 dsergent@srgnt. com - 07/09/2013 - Page 34

SUBWAY GEMBA WALK!

Leaders transformation into a gemba walker 1. 2. 3. 4. 5. 6. Current state Mgrs in passive role Unprepared to participate Low confidence in lean knowledge Uncomfortable discussing lean Feeling incompetent in gemba Marginal value, check-thebox exercise 1. 2. 3. 4. 5. 6. Customer focused future state Mgr-driven experience a. Get the answer, ace the test Good prep, mgrs ready to participate and lead Confident observer in gemba Competent in lean management system Comfortable coaching lean management in gemba Valued, enjoyable investment of time

Gemba Walk – How do you go see: What problems did we face during the last work day (or shift)? What tasks do we have to achieve today? What are your desired outcomes? Are there any special events planned today? How are we organized to achieve that workload? Are there any important issues that may affect the jobs today? What can we do to solve these problems? How can I help you? Who can we be more successful in improvement? Frontline - Process, Problem Solving, Elimination of Waste Mid-Level - Resources, Team Development, Unevenness, Overburdening Executive - Systems, Strategic, Unevenness

Gemba Walk – additional things to think about Respect for People and their Workplace, Including Self Go And See Set an Example Leading, Getting Feedback, Developing, Planning, Improving Engage Team, Think and Communicate Together Set an Example Review A 3 s, Control Charts, One Pagers - Show Them Yours Too Key Measures, KPIs Adapt Plan and Actions (PDCA) Set an Example Questions to Engage Them and Adapt The Plan See next page

The real key to success: Involve and engage every employee, every day WHY?

Real World Example

Real World Example

Real World Example

Real World Example

Share Your Experiences • What Gemba Walk processes have you seen work, or not work!

v. Welcome And Introductions v. MLC Overview v. Red Bead v. Gemba walks v. Gemba walk at Subway v. Long term Lean planning and Hoshin v. Leaders Standard Work v. Culture change and employee engagement systems v. Wrap Up

Definitions you need to know… Hoshin = a course, a policy, a plan, an aim, a goal • In Japanese means “Shining Needle” of a compass Kanri = administer, manage, control, charge of, care for Policy Deployment • In Japanese means “Control /Channeling”, “Reason or Logic” Key Measurable (or Metric) = KPI = Key Performance Indicator CSF = Critical Success Factor Efficient = Doing things right Effective = Doing the right things The Key Influences of the success of the business. A business measure that focuses action. Not one or the other, we must have BOTH

Misaligned Values/Goals

Aligned Values/Goals

Aligned and Focused Values/Goals

Another way to look at it… Different teams Different goals Different methods Different teams Same goals Same methods Different teams Different goals Same methods Same team Same goals Same methods

Why Hoshin Kanri? Puts all leaders on the same page, pulling in the same direction Aligns every level of the organization to the top line goals Creates a process where every employee contributes to PDCA cycles Gives everyone a sense of ownership because they understand how they help achieve the strategy.

Catchball – What IS It? A participative approach to decision making. Used in Hoshin to communicate across management levels and functions when setting business objectives. The metaphor uses a ball tossed back and forth to emphasize the interactive nature of policy deployment. Being permitted to speak without interruption – being heard Everyone is heard in catchball Dennis Sergent 517 -285 -5500 dsergent@srgnt. com - 07/09/2013 - Page 52

1. What is “True” Hoshin Kanri? (P-D-C-A) Long term targets defined Targets given to site leadership, no answers given Fed back to top exec for approve / reject Site leadership breaks into manageable short term targets Implementation plan made, Hoshin Control Managers feed started back their ideas to site Leader for approve / reject Department managers Targets given to meet with supervisors managers, no to relay plan answers given, just targets to Targets given to meet Supervisors, no answers given, just targets to meet The floor feeds back their ideas to managers for approve / reject Supervisors / Leads meet with people to develop plan to support goals

1. What is “True” Hoshin Kanri? (P-D-C-A) Stretch goals from top mgt Fed back to top mgt for approve / reject Cut Cost by 30% Targets given to site leadership, no answers given Reduce maint cost by 10% Targets given to managers, no answers given, just targets to meet Reduce OT by 5% O 1 A The floor feeds back their ideas to managers for approve / reject Scrap 3 OT 3 Maint 3 Targets given to M 2 A Sups, no answers M 3 A given, just targets to meet Scrap 2 OT 2 Maint 2 M 1 B Scrap 1 OT 1 Maint 1 M 1 A Reduce Scrap by 10% Managers feed back their ideas to site Leader for approve / reject O 1 B M 2 B O 2 A O 2 B M 3 B O 3 A O 3 B S 1 A S 2 A S 3 A S 1 B S 2 B S 3 B Implementation plan made, Hoshin Control started

Organizing the Connections Division Goal 1. 1 Corporate Goal 1. 0 Objective 1. 1 Objective 1. 2 Objective 1. 3 Objective 1. 1. 1 Objective 1. 1. 2 Objective 1. 1. 3 Regional Goals 1. 1. 1 Goal 1. 2 Objective 1. 2. 1 Objective 1. 2. 2 Objective 1. 2. 3 Goal 1. 3 Objective 1. 3. 1 Objective 1. 3. 2 Objective 1. 3. 3 Objective 1. 1. 1. 2 Objective 1. 1. 1. 3 Branch Goals 1. 1 Objective “X” Dennis Sergent 517 -285 -5500 dsergent@srgnt. com - 07/09/2013 - Page 55

Hoshin Kanri – tracking methods 56 56

Hoshin Kanri – tracking methods 57 57

Hoshin Kanri 58 58

Hoshin Kanri 59 59

Real World Example 60

Real World Example 61

Real World Example 62

Real World Example 63

Real World Example 64

Real World Example 65

Real World Example 66

Real World Example 67

Your Turn! Outline what a Hoshin Plan might look like For you, personally: • • First – define the long term goals Next – define what might have to happen in the next 12 months Next – Define actionable projects/workshops/Kaizen Last – Define what metrics might be needed to measure success

v. Welcome And Introductions v. MLC Overview v. Red Bead v. Gemba walks v. Gemba walk at Subway v. Long term Lean planning and Hoshin v. Leaders Standard Work v. Culture change and employee engagement systems v. Wrap Up

Standard Work Definition: The current best documented method to safely and effectively organize work elements in a repeatable sequence as part of a process or system that adds value.

In the Workplace: v Leadership • Standard Work Like everyone else in the organization, leaders must establish and follow standards: v Methods v Reports v Training v Times v Visual Controls v Routes Are you spending your time on the right things? How much waste is in your everyday activities?

Why Leader Standard Work? Clearly Documents the Management System Documents the current state of the value stream in lean management Builds follow-through trust and accountability Shows willingness to lead by example Defines expected behavior for leaders Makes perfectly clear what is important Makes a more effective leader

Another View - Leader Standard Work! Clearly Documents Your Management System Always Manage Your Time, and Your Calendar Live by the clock, your schedule, your calendar and your plan Focus on Your Managerial Priorities Spend your time on the important tasks first Manage the balance of important vs. urgent Identify the Right Things to Do Demand vs. programmable Then Do Them Defines expected behavior of you as a leader (what you should do)

What standard things do you do as a leader? (or SHOULD do!) Lead start-up meetings (not just on shop floor, in all areas such as labs and administration, too) v Gemba walks v Check labor availability/scheduling v Problem solving v Recognize the achievement of others v Mentoring v Review appropriate data v Lead or participate in kaizen events v Participate in 5 S audit v Monitor progress of processes v Train others v NOTE: e-mail, meetings, presentations should account for minimal time in your standard work v 74

Who Has Standard Work? % of Work (time) that should be Standard ROLE Executives 10 -15% Value Stream Manager 25% Support Department Managers 50% Supervisors – Group Leaders 50% Team Leaders 80% Operators (Associates, members) 95+% EVERYONE!

Daily Responsibility Meetings Three Tiers 1. Tier 1: Team Start Up Meeting Team 2. leader meets briefly with team members Tier 2: Supervisor Meeting Supervisor meets with team leaders and dedicated support group representatives 3. Tier 3: Value Stream Meetings Value Stream Manager with supervisors and support department personnel

Key Points For LSW Check because You Care for & Respect People Each level of LSW has some overlap and redundancy to provide linkage – make sure they are logical and meaningful to you and your team Learn by Doing Excellence is more about what you do than about what you know – and learning comes from action – follow the LSW process Improve the Standard As the processes change and as people learn, Leader Standard Work needs to change with it

How Do I Take Action? Everyday tasks Standard weekly or specific-today tasks Notes, working diary Emergent items 78 Dennis Sergent 517 -285 -5500 dsergent@srgnt. com - 07/09/2013 - Page 78

How Do I Take Action?

How Do I Take Action?

How Do I Take Action?

How Do I Take Action? Leadership Standard Work Exercise: Part 1 Take 5 minutes: List the KPI’s / Goals / Objectives that are critical to the success of your department/role/company

How Do I Take Action? Leadership Standard Work Exercise: Part 2 Take 5 minutes individually and list the daily/weekly/monthly tasks you perform or complete on a regular basis. These items are things that others rely on you to complete for information, priority, performance feedback, communication, etc. This includes meetings, conference calls, training, etc. List everything you do. Use your outlook calendar as a guide if you brought it. Now, how many of your standard tasks help support / monitor / audit / track the key KPI goals that you listed earlier? Now list additional items that you SHOULD be looking at to support those items

How Do I Take Action? Leadership Standard Work Exercise: Part 3 Take 5 minutes: Lay out a blank sheet of paper with all those wonderful notes you just made! Use the layouts we showed earlier as reference The point is not a standard form. The point is to capture all the things you need to do as a leader to move your organization forward!

Additional Considerations

Share Your Experiences • What Leader Standard Work have you seen work, or not work!

v. Welcome And Introductions v. MLC Overview v. Red Bead v. Gemba walks v. Gemba walk at Subway v. Long term Lean planning and Hoshin v. Leaders Standard Work v. Culture change and employee engagement systems v. Wrap Up Dennis Sergent 517 -285 -5500 dsergent@srgnt. com - 07/09/2013 - Page 87

Culture – What is it?

Culture defined A blend of the values, beliefs, taboos, symbols, rituals and myths that all organizations develop over time Whether written, spoken or merely understood, culture describes and governs the ways members of organizations think, feel and act Cultures may be based on beliefs spelled out in vision & mission statements, objectives, goals, policies, processes and practices

What about culture?

Lean Organizational Principles

Lean Culture Traditional Culture Lean Culture

Employee Involvement

Employee Suggestion Programs

Lean Culture Change

Are you too busy to improve?

Emergent Case Study

One Emergent

Culture Survey Less than 50% in all categories Some worse than others

On Point GC

New Focus

Hassle Free Friday Forum Monthly meeting Education Kaizen presentations/updates Idea generation Did you hear Lunch n listen Kaizen presentations/updates Did you hear

Book Club

Integrated Process Teams

Goals of This Program Move toward the Lean fundamental concept of Kaizen – Small, daily continuous improvement Engage all employees in process improvement Begin building a culture that recognizes small changes as big improvements Cut cost and lead time out of our processes Focus on ideas that YOU can implement!

1 2 3 4 Employees or supervisors get an idea… 5

1 2 3 4 5 An idea slip is filled out Basic info about the idea and what it will help Tie all ideas back to the 8 deadly wastes To encourage folks to work on things they can control Some limiters to keep ideas on track Bottom section to be filled out if idea is approved

1 2 3 4 5 The slip is placed on the board, in the right section Its Visual Designed to show what ideas we want most Nothing to hide

1 2 Idea gets reviewed Board is checked once per day Supervisor check MGR check 3 4 5 Ideas are “tested”: Is the idea a personal attack? No: Pass Yes: Reject and explain Is the idea a change to MPS policy? No: Pass Yes: Reject and explain Is the idea greater than a $1000 purchase? No: Pass Yes: Reject and explain Will this idea truly eliminate waste? Yes: Pass No: Reject and explain Does this idea work against core Lean principals like 5 S or Flow? No: Pass Yes: Reject and explain Does it add more waste than is saves to another area? No: Pass Yes: Reject and explain 3 checks before rejection! Its important that a high number get approved! World class is between 35 -50 ideas person, per year!

1 2 3 4 5 Card management Supers review these 2 sections Mgr’s review these 2 sections Passes test questions? Yes – Fill out bottom of card, tear off top sheet and attach to bottom of board. Give card portion of form to implementer No – Fill out bottom of sheet and move to manager section Passes test questions? Yes – Fill out bottom of card, tear off top sheet and attach to bottom of board. Give card portion of form to implementer No – Fill out bottom of sheet and give to lean coordinator This section is for the top copy record of the idea card so we can monitor progress and not lose any ideas. It will be removed by the Lean Coordinator once the idea is implemented and the card portion is turned in

1 2 3 4 5 Implemented ideas get rewarded! Every implemented idea will get a small gift – your choice from about 10 different items Once a month, a drawing is held: One prize is drawn for every 20 implemented ideas company wide “I can change” ideas are worth a $50 gift, “Supervisor” ideas are worth a $20 gift, “Manager” ideas are worth a $10 gift, “Other dept” ideas are worth a $5 gift – this will help focus on the right ideas (small and controllable) If less than 20 ideas are implemented, they roll to next month Lean Champion will track # of completed and time to completion (avg) slips by month and post metrics

v. Welcome And Introductions v. MLC Overview v. Red Bead v. Gemba walks v. Gemba walk at Subway v. Long term Lean planning and Hoshin v. Culture change and employee engagement systems v. Leaders Standard Work v. Wrap Up Dennis Sergent 517 -285 -5500 dsergent@srgnt. com - 07/09/2013 - Page 114

Sustaining And Maintaining “Transformation in any organization will take place under a leader. It will not be spontaneous. ” A leader “possesses knowledge, personality, and persuasive power. ” - W. Edwards Deming Dennis Sergent 517 -285 -5500 dsergent@srgnt. com - 07/09/2013 - Page 115

Parting Thoughts W. Edwards Deming By coming here, you have taken on a solemn responsibility - and you can’t wriggle out of it. We’ve got some big changes to make, and you’re going to have to make them. Who else will do it? Martin Luther King, Jr. We are witnessing the birth of a new age and we must face the responsibilities that come along with it. Shall we say the odds are too great? Shall we tell them the struggle is too hard? Or will there be another message, of longing, of hope, of commitment? The choice is ours. Dennis Sergent 517 -285 -5500 dsergent@srgnt. com - 07/09/2013 - Page 116

Reflection: What will you do differently tomorrow when you get to work? Dennis Sergent 517 -285 -5500 dsergent@srgnt. com - 07/09/2013 - Page 117

Wrap UP Gather at the white board for pluses and deltas Dennis Sergent 517 -285 -5500 dsergent@srgnt. com - 07/09/2013 - Page 118