Managing Times, August 2007

July/August.07

MANAGING TIMES S h a r i n g

S o l u t i o n s

f o r

Y o u r

L e a n

Plan for Success through Policy Deployment

8 Applying creativity in the world of business

10 Best practices in workplace visual management

12 Lean awareness training for everyone

J o u r n e y

PUBLISHER’SNOTE

Practice What You Preach

Recently TBM held our Global Exchange, which is our yearly meeting of all TBM associates from around the globe. It’s the time we take to get together to share best practices and celebrate our diversity and international culture. Because we follow lean principles, we also try to make sure that the time spent at this meeting is value added.

This year we changed the format a bit, and one of those changes resulted in several of our clients giving presentations about their lean journeys to all of us on the first day of the exchange. Having client company representatives attend was a way for those of us who may not have worked directly with these companies to share in their success, as well as a way to exchange ideas.

But more important, it gave us a chance to hear the voice of our customer. After the client presentations, we had a round table discussion in which TBM associates could ask questions of the presenters. After that, I stood up and asked the presenters to share with us the ways in which they thought we could serve them better. I wasn’t asking for them to tell us how great we are and how happy they are with their current and past successes, but rather to honestly speak their minds about the things TBM does that could be improved on. And they did—very candidly.

We could have stopped after they had presented their success stories and simply patted ourselves on the back for a job well done. But one thing we all know about a lean journey is that it’s a never-ending quest for continuous improvement. Here we had some very diverse clients sitting before us; how could I not have asked them for some honest feedback on where we need to improve in order to better help them on their journeys?

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The mistake many make when faced with criticism is to acknowledge it but never do anything about it. The same happens on a lean journey—we sometimes recognize that problems exist, but we never actually do something about them. Reacting in that way will doom you to failure.

When you hear the voices of your customers and don’t respond to them, what message are you sending? You’re saying you don’t really care what they think. That’s not the way for a company to stay in business, let alone grow. In our case, we spent the rest of the week of the exchange coming up with solutions to our clients’ concerns. Although we won’t be able to implement all of the solutions “instantaneously,” it will be clear to everyone—TBM associates and clients alike—that we take their concerns seriously and that we are working to serve everyone better. It’s called practicing what you preach.

In this issue of Managing Times you can read about how to implement policy deployment to take you further to being a high-performing company (p. 2). You can also learn about how one company has taken the lead in visual workplace management and associate empowerment (p. 10). In each of these stories, taking action is a common theme. Just as with our voice of the customer experience at the TBM Global Exchange, the companies profiled understand that action—not words—is the key to success.

Anand Sharma, President & CEO TBM Consulting Group, Inc. asharma@tbmcg.com

July/August.07

MANAGING TIMES A publication of TBM Consulting Group 800.438.5535, www.tbmcg.com

Publisher Anand Sharma: a s h a r m a @ t b m c g . c o m Executive Editor William A. Schwartz: bschwartz@tbmcg.com Managing Editor Julie Poudrier: jpoudrier@tbmcg.com Featured Columnists Doug Bonner Mike Caldwell Joe Panebianco

Mike Serena Noel Temple Marie Turner

Contributors Bruce Anderson Philippe Joly Stacy Aponte-Morris Angela Scenna Todd Carlson Art Direction and Design IONA design www.ionainteractive.com Printing Carter Printing & Graphics, Inc. www.carterprintingnc.com Published six times a year in Durham, NC 4400 Ben Franklin Boulevard Durham, NC 27704 LeanSigma® is a registered trademark of TBM Consulting Group, Inc. If you would like to receive this journal via email, send your vital information including email address to tbm@tbmcg.com

On the cover: Components of a policy deployment matrix ensure organizational alignment for the vital few projects that enable companies to achieve breakthrough growth and focus.

LEANCOMMUNITYNEWS

Sealy Mattress has undergone some recent organization changes, consolidating regions from four to three, and as a result a number of people have moved. Mike Hofmann remains executive vice president of operations.

John Deutchki is corporate director of continuous improvement (CI), and Bediesh Merhai, formerly Western Region CI manager, is his assistant. Dan Hige is vice president of the North Region, and Joe Maru is CI manager. In the North Region, David Bishop is the Albany site manager and Chris Lynch is the CI coordinator. At Batavia, Don Pflug is site leader and Kathy DiMaio is CI coordinator. At Medina, Lisa Nowak is site leader and Scott Bubar is CI coordinator. At Williams Port, Ricky Johnson is site manager and Don Grimley is CI coordinator. Ken McGuffin is site leader for Clarion. Kevin Hogan is vice president of the South Region, and Jack Swain is CI manager. Dave Freese is site leader for High Point. Craig Greer is site leader for Atlanta and Tejas (TJ) Naik is CI coordinator. In Orlando, Mike Kerkman is site leader and Luis Colon is CI coordinator. In Brenham, Ray Rodenbeck is site leader and Rodney Dickschat is CI coordinator. In Fort Worth, Roger Keen is site leader and Danilo Burgos is CI coordinator. Shailesh Pattel is vice president of the West Region. He replaces Tamlin Ferguson, who has left the company.

Christian Rergis is the Western Region CI manager. In Phoenix, David Winter is site leader and Jose Valenzuela is CI coordinator. In St. Paul, Rob Hays is site leader and Eric Slotness is CI coordinator.

In Portland, Richard Coley is site leader and Heidi Hicks is CI coordinator. In Richmond, Curtis Mazun is site leader and Steve Donnelly is CI coordinator. In Southgate, Rob Bryant is site leader. In

Denver, Don Cotton is site leader and Marie Rando is CI coordinator. In Kansas, Stu Ernest is site leader and Dustin Griffin is CI coordinator. Herman Fisher is divisional CI manager for the Component Division. In the Component Division, the CI coordinators are James Vines in Colorado Springs and Kent White in Rensselaer. The CI coordinator position in Delano is open. In Edmonton, Alberta, Canada, Kim Pemberton is site leader and Sarah Baghat is CI coordinator. … Marvin Riley is the new vice president of operations at GGBNA. … Dietrich Wunn, formerly KPO coordinator for Bunge Europe, left the company on July 1. … On July 24, 2007, in celebration of ConMed Corporation’s 20th anniversary of listing as a publicly traded company, ConMed CEO Joseph J. Corasanti presided over NASDAQ’s opening bell. … TBM welcomes two new North American consultants to our family: Tim Nickerson and Kenneth Greg Warrick.

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CASESTUDY

Plan for Success through Policy Deployment

By Anand Sharma, TBM President and CEO, and Gary Hourselt, TBM ExecutiveVice President of International Consulting & Strategy

In the fall, when you close out the books for the fiscal year, does your management team breathe a sigh of relief?

Do you see this closure as a time to relax, or do you start looking forward to the coming year? Does your team plan for success or just hope that the markets favor you and your bottom line?

A company that has committed to a lean transformation also has committed to working toward long-term growth and success. This requires planning for the future as well as creating operational excellence today. Although many companies understand the need for planning, doing so is perceived as much more difficult than dealing with the day-to-day operational improvements, and so often planning goes undone or poorly done. And yet, if a company wants to truly transform, its management team must learn to plan for the future. A lean company does this planning through policy deployment.

No organization can afford to waste energy and resources on efforts that do not support its objectives. You can use policy deployment to build consensus on a few critical things that will generate growth and long-term success.

Policy deployment is a process for focusing a company’s resources on those few critical objectives that improve execution and drive growth.

Policy deployment is an integral part of the senior management leadership process that lies at the center of an organization’s lean transformation.

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Because this is the time of year when companies should be planning for the future—and it won’t do to wait till the end of the year and hope New Year’s resolutions will suffice—we have decided to reprint from our book The Antidote the sections that describe policy deployment and the steps necessary to implement it. We hope that this will be the jump start some companies need to start implementing policy deployment to improve their growth and success.

Focusing on the Vital Few The transformational management system treats strategic planning much the same way it treats leadership, employees, customers, suppliers, and processes, which is to say very differently than the old approach to strategic planning. Policy deployment takes significantly less time than the old approach to strategic planning. It gives everyone involved in the process equal input into the outcomes. It ensures that the necessary buy-in and resources exist before the plan is implemented. It demands relentless accountability and follow-up to achieve objectives. It delivers results aligned with the organization’s vision, its need for operational excellence, and its desire for growth.

2x4

Policy Deployment Initiative

“We do a top-down, bottom-up process,” said Tim Powers, president and CEO at Hubbell. Hubbell engineers manufacture and sell electrical and electronic products such as wiring systems and lighting for offices, products for the utility infrastructure, and specialty communication products. It employs more than 11,000 people with annual sales of $2.5 billion. “The major benefit is that management as a team reassess where it is on an annual basis. It helps us focus on the vital few and get rid of the typical problems facing most companies of having too many priorities.”

Tim and his leadership team embarked on their lean journey early in 2002. “We were in a situation where we had too much working capital, our ability to adapt to rapidly changing market conditions was too slow, and we needed to be quicker, more flexible, more able,” said Tim. “I thought our company needed dramatic change.”

In 2002, the first full year of its lean journey, Hubbell coined a “2x4” strategy: two times improvement in many critical metrics by 2004.

Its goals included 2x inventory turns by ’04, 2 margin points by ’04, and 2 percentage point market share improvement by ’04.

The “2x4”strategy helped the organization focus on the vital few goals that would help Hubbell improve speed, flexibility, and quality. It started lean transformation in six sites and expanded to all thirty of its locations by 2004, a steady transition that makes its results even more astounding.

From 2002 to 2004, Hubbell made dramatic improvements including: • Net sales up 54 percent • Net income up 320 percent • Sales per employee up 17 percent • Inventory down 53 percent and inventory turns doubled • Working capital as a percent of sales down 45 percent • Space reduction of more than 1.5 million square feet “Our new management methodology has helped us take several hundred million dollars out of working capital and put it into cash,” said Tim, “and that’s allowed us to buy more companies.” Hubbell’s acquisition strategy is a key component of its plans to grow the company. It has used policy deployment since 2002 to select—and deselect—the objectives and actions that support its strategies.

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CASESTUDY How Policy Deployment Works The senior management leadership process begins with strategy, vision, commitment, and policy deployment. Policy deployment begins with knowledge of the facts. The initial policy deployment meeting takes three days, typically off-site, and must be attended by the entire management team and other key contributors.

| Step 1 | Create a Common Understanding We believe that everyone involved in identifying strategies and developing plans should share the same information. They should have a common understanding of the external environment (opportunities and threats) and internal environment (strengths and weaknesses), short- and long-term goals, and strategic direction, so that they can provide informed and reasoned insights.

We don’t subscribe to the idea that participants in this process should be limited to the president/CEO and his or her direct reports. Every organization has additional “movers and shakers” and informal leaders who can enrich the discussions and strengthen the plan. We encourage you to find the natural “go-to” people who have their coworkers’ confidence and respect and tactfully bring them into the process. The ideal number of participants seems to be between twelve and twenty, although we’ve done policy deployment with fewer and larger groups.

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Before the first meeting, determine who will present the critical information to the group that it needs to make decisions.

Topics to be addressed include: • Customers’ perceptions of quality, delivery, service, and value (each key customer/market segment) • Competitors’ strengths and weaknesses • Current company performance • Impediments to success • Operational performance indicators • Financial performance indicators • Human resource capabilities and challenges • Supplier capabilities and challenges • Economic, legal, regulatory, environmental, and other issues • Emerging technology and its implied impact on the organization’s future The presentations and discussions during the first meeting should be completed in approximately three hours. It’s important early in this meeting to clearly communicate the egalitarian nature of this process. We say “one person, one vote.” All ranks and titles are left at the door. Participants need to understand this because each has an equal responsibility for the creation and success of the plan.

| Step 2 | Key Strengths, Weaknesses, Opportunities, and Threats (Focused SWOT) The information gathered during the first meeting is used for the focused SWOT analysis in the second part of the meeting.

The goal of the SWOT analysis is to identify those significant, vital few issues the organization must address.

Strengths and weaknesses are generally assessed from an internal focus and against customer expectations and competitive pressures. Opportunities and threats are assessed from an external perspective and are generally out of your control.

The exercise begins by asking participants to assume that each is the president or leading executive of the company. If they we re the boss, what would their priorities be?

Each person writes down three strengths, one each on a Post-It note. Each strength should be a clear, concise, and complete statement. The participant then prioritizes the strengths by putting stars in the upper right-hand corner: *** for the top priority, ** for number two, and * for the number three. Each participant repeats the process for the weaknesses, and then prints his or her name on the bottom right-hand corner of each note. Participants are encouraged to take their time, but not to discuss their ideas with others in the group.

The goal of this silent brainstorming activity is get everyone involved: One person, one vote.

Once this is completed, participants follow the same process for key opportunities and threats. When everyone is finished, the facilitators take their notes and arrange them on a wall by strengths, weaknesses, opportunities, and threats, and under similar categories or sentiments within each. All participants have a chance to review the groupings to make sure their ideas are understood and categorized correctly.

When the review is complete, beginning with strengths, the number of stars under each category is counted to select the top three or four areas for synthesis. Each area is assigned to a sub-team charged with capturing the intent and spirit of all related ideas in a single, concise, clear statement and presenting its statement to the entire group for further synthesis, improvement, and a reality check. Once the group agrees on the nature and wording of the selected strengths, it repeats the process for weaknesses, opportunities, and threats.

| Step 3 | Develop Directional Alignment Leadership’s most important step is to align the direction of their organization with the company’s vision and the revelations of the SWOT analysis. Leaders determine this direction by evaluating two dimensions, technology/products and markets/channels, to expose both new and related opportunities.

The directional alignment exercise typically involves the same group that participated in the SWOT analysis. It begins with the group suggesting new and related products the company could offer, new and related technologies it could pursue, new and related markets it could enter, and new and related channels it could explore. Subteams of the group define each new/related opportunity and anticipate its potential, impact, capital required, and risk. They present their conclusions to the entire group, which then uses the same silent brainstorming technique described in Step 2 to select the top four to five high potential/high impact areas with low capital/low risk rating.

Sub-teams for each of the top selected areas identify their area’s impact on sales and earnings, and its capital and other resource requirements. They outline the action steps and implementation schedule necessary to move forward. Then they describe their findings to the entire group, which discusses the plans, completes the strategic directional matrix, and reviews each plan and all plans together for practicality.

SWOT analysis and strategic directional matrix

| Step 5 | | Step 4 | Outline the Strategic Plan Policy deployment is a three-phase process that begins with the development of goals that are then translated into objectives and projects through the policy deployment matrix, which are reviewed monthly throughout the year to ensure that the objectives are being met.

The SWOT analysis and strategic directional matrix are key inputs for Phase I. The planning team uses these inputs to outline a three- to five-year strategic plan that identifies concrete and quantitative goals in four specific areas: • Quality/customer satisfaction • Productivity/cost reduction • Delivery/responsiveness • Morale/ergonomics/safety Once the goals are established, the team reviews current performance on them and establishes concrete, measurable goals for each operating unit that will contribute to achieving the overall business goals.

Create the Policy Deployment Matrix The policy deployment matrix captures business objectives, projects, goals, financial impact, and implementation teams for the organization or for individual business units on a single page. To complete the matrix, the leadership team for the organization or business unit groups the strengths and opportunities identified during the SWOT analysis to guide the development of growth objectives. It then groups the weaknesses and threats to help develop operational improvement objectives. We refer to growth objectives as “offensive” and operational improvement objectives as “defensive,” or basic “blocking and tackling.” In our experience, the focus of the first year of the transformation is on the defensive side, on shoring up the weaknesses and threats and getting your house in order. Through operational excellence, your organization earns the right to go on the offensive and plan for growth.

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CASESTUDY

Policy Deployment Matrix With both a defensive and offensive focus in mind, each member of the leadership team develops three prioritized business objectives for the next three to five years that are broad enough to address specific SWOT statements, yet specific enough to produce achievable, measurable annual targets. As in Step 2, each participant writes down his or her three longer term objectives on Post-It® notes, using stars to prioritize them and printing his/her name on each. Again, the goal of this silent brainstorming activity is get everyone involved, although we notice that people tend to be “gun shy” the first time around.

When everyone is finished, the facilitators arrange their notes on a wall under similar areas of focus. All participants have a chance to review the groupings to make sure their ideas are understood and categorized correctly.

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When the review is complete, the entire team uses the grouping and the stars to select the top three or four business objectives for the next three to five years.

Each objective is assigned to a sub-team charged with capturing the intent and spirit of all related ideas in a single, clear, concise statement. The team then identifies one, two, or, at the most, three specific projects required to achieve the first year intent of the objective, key measures for success for each, and the potential financial impact of completing the projects and meeting the objective.

Each sub-team presents its business objective with first year project plans, metrics, and financial impact to the entire group for discussion and refinement. The leadership team must choose which projects to pursue with six being ideal and eight projects the maximum. When all objectives have been finalized, the objectives, projects, goals (metrics), and financial impact are entered on the policy deployment matrix.

The last section of the matrix involves identification of the implementation teams for each project, beginning with the project

leader and, if this is for a business unit, a project sponsor at the corporate level. The project leader/sponsor must have been present for the policy deployment process and cannot lead or participate on more than two teams.

The leadership team then selects four to eight members for each project implementation team depending on the size and scope of the project. When we facilitate these activities, we screen people to make sure that the right people end up on the right teams.

Implementation team members must represent different functions, bring the customer view-point to the project, and provide the necessary technical expertise. We look for a balance of passion and knowledge, process insiders and outsiders, executives and managers, and other cross-functional perspectives that help create innovative solutions while achieving the objectives. As with the project sponsor/leader, an implementation team member cannot be on more than two teams.

“We establish a policy deployment matrix with our top managers,” said Hubbell’s Tim Powers, “then each business unit aligns its priorities with that. Every single unit ties to our policy deployment matrix. Our goals are the sum of the outcomes of our business units.”

| Step 6 | Choose the Vital Few and Deselect Aggressively The projects chosen through policy deployment are not the only activities people are working on. The purpose of this step is to select only the vital few breakthrough initiatives that will have a major impact on the company and deselect those that won’t, because in addition to these initiatives, people are working on many important activities daily to maintain current levels and achieve superior performance.

We start by asking leadership team members to do a little homework: List all the breakthrough initiatives in which they are involved. Breakthrough initiatives focus on growth: (1) in sales and market share over and above maintaining the current business level; (2) in earnings and asset leverage over and above maintaining the current level of performance; and, (3) to achieve your mission through strategic alignment with long-range plans.

• As a group, the participants put their initiatives in five categories: • Regulatory, and you have to do them • Mandatory, and your job depends on them (so you can’t tactfully negotiate relief ) • Aligned with the policy deployment matrix • Aligned strategically • Not aligned De-selection involves keeping those aligned strategically and by policy deployment and the regulatory initiatives, killing those not aligned, and questioning the mandatory to see if they must be kept.

The group needs to formally “kill” each deselected project and develop action plans for the questionable ones.

Deselecting can be a very tedious process because nobody wants to give anything up. But as Hubbell discovered, it is absolutely necessary. “It helps us focus on the vital few and get rid of the typical problem most companies have of facing too many priorities,” said Tim Powers.

Deselection is vital for making progress as a corporation.

We encourage leadership teams to meet after two or three weeks to finalize the policy deployment matrix. This allows time for the ramifications of the matrix to become clear and for a “sanity check” to occur.

| Step 7 | Track and Review Performance As the name implies, the crux of policy deployment is making sure projects are on track and that actions are taken to achieve the business objectives. This is done through weekly team meetings for progress and monthly project reviews by senior management.

As soon as the policy deployment matrix is complete, leaders develop a detailed monthly schedule for reviewing performance. Following a detailed tracking procedure, each month the executive team reviews the projects that have failed to achieve targeted milestones and devises and implements countermeasures. Visual controls and performance boards help everyone in the organization see how the company—and each team—is doing.

The Power of Alignment High-performing organizations accelerate improvements and speed past the competition through the power of alignment. If everyone is working on those activities that are vital to your growth and success, your company will grow and succeed, as Hubbell continues to demonstrate.

“The general and agreed upon priorities of our company are innovating the greatest number of products, and serving our markets with the least amount of capital,” said Hubbell’s Tim Powers. It aligns all business units with these priorities through a one-day policy deployment review process.

“We have sixteen managers in our top management team. We start from scratch every year with a SWOT analysis: what has gone on, how we saw it a year ago, what’s changed. We get the skeleton of the matrix the next day and then take it out into the field and fill it out during discussions at our locations, to get the exact goals and measures. We do this in the fall so we’re ready to go at the beginning of December.”

This process takes place at a company with more than 150 different product lines that is reorganizing along those product lines to better serve its customers. The most effective alignment—of policy deployment, product/service development, functional activities, human resources, value streams, and other key processes—begins with the customer.

Policy deployment is indeed at the center of any company’s transformation, and now is the time for you to make it the center of yours.

Note: This article has been excerpted from The Antidote, published by TBM Consulting Group, Durham, NC.

Managing Times | July/August.07 www.tbmcg.com/news/newsletter.php

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ACCELERATEDLEARNING

What Is Creativity?

By Joe Panebianco,TBM Senior Trainer and Design Specialist

During a kaizen event, we repeatedly

Joe Panebianco

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stress, “Creativity before capital.” This means we should find ways to eliminate waste, solve problems, and make improvements without using money. To do this requires us to be clever, inventive, resourceful, and creative. But what exactly is creativity? Being creative means bringing something new into existence using imaginative skills. What is created could be a solution, a method, or an idea that you could work on in your personal or professional life.

If you think that being creative is only for people in the arts and music—and not a trait required for people working in big corporations—then you need to think again about how creativity applies in the world of business. Creativity has far broader implications than the stereotypical connotation of artistic expression. Don’t CEOs and leaders at all levels of an organization require creativity to conceptualize a new product, sell an existing product in new markets, or grow sales with current customers? At the same time, others in the organization use creativity to face the challenges of manufacturing the product at a competitive price, supporting the sales with customer

service, and distributing the product through effective channels. In each of these examples, business leaders are working on problems and devising solutions that didn’t exist before. These people are using their minds to imagine new ways of doing something. Their solutions may involve creating a new product, brand, or technique.

Creativity is important. It is one of the greatest human characteristics and has helped us evolve into what we are today.

Strengthening your creative muscles is fairly simple and can help in all aspects of your life. In his book How to Think like Leonardo da Vinci, Michael Gelb examines seven principles that da Vinci—one of the most creative minds in history—used throughout his life. When you think of da Vinci, you might automatically link him to the Mona Lisa and wonder what relevance he has in the business world. In addition to the arts, da Vinci investigated and made contributions in the fields of anatomy, botany, geology, and physics. The principles he followed for creativity, which are described in the following paragraphs, are still useful ways to stimulate creativity today.

Curiosity Learn about the world around you. Children are born with every sense attuned to exploration of their world. Like little scientists, they experiment and try different things to learn about and understand the world. Some of the first sentences uttered by a child are begin with “Why?” and “How?” It is no wonder that children are more creative than adults. According to the website www.creativityatwork.com, when given a problem to solve, the average adult will think of three to six alternative solutions; the average child thinks of 60.

Engage in activities that will help you learn about the world: read a book, take a walk outside and observe the world around you, watch educational programming (e.g., the Discovery and History channels) that will keep thinking about why and how.

What you learn from these experiences can be applied to a situation that requires creative thinking.

Demonstration Da Vinci committed himself to testing his knowledge through experience and was determined to learn from his mistakes.

He referred to this persistence as “demonstration.” In the business world, we are all familiar with the tale of the executive who made a million dollar mistake. When he told his boss that he was ready to hand in his resignation, his boss replied, “Are you kidding? I just spent a million dollars on your education.” Companies that reward demonstrated attempts at creativity will eventually hit one out of the ballpark.

Another classic example of this is 3M. The company that we know today originated as Minnesota Mining and Manufacturing Co. in 1902. After failing miserably as a corundum mining company, the company experimented and developed “Three-M-Ite” (sandpaper).

Sensation Sensation is the skill of observation. It refers to using your five senses—sight, sound, touch, taste, and smell—to their greatest potential. Many people think of observation as something that only involves sight. During kaizen events, participants are frequently instructed to make observations, or “watch the line.” Invariably, the first question they ask is, “What exactly are we looking for?” If we knew what to expect, we wouldn’t be observing. Observation requires us to use all of our senses and be open to whatever unfolds in front of us.

Embrace Ambiguity, Paradoxes, and Uncertainty As you become more curious and continue to explore, you’re bound to be confronted with the unknown. The ability to keep your mind open and receptive in these situations is essential. At these moments most breakthrough learning and new ideas occur.

Balanced Thinking Research has shown that if you are artistic and intuitive then you use the right hemisphere of your brain more. If you are inclined towards logic and step-by-step processes, then you use your left hemisphere more. In an ideal world, we would all function as “whole-brain” thinkers—balancing artistic, intuitive, logical, and systematic tendencies equally. However, since most of us are not da Vincis, we can still make an effort to recognize different abilities among our employees, utilize strengths while developing weaker areas, and form balanced thinking teams or work groups.

Two exercises that help develop creativity in this area are as follows: 1. Select a common object (e.g., a brick or a bucket) and brainstorm as many different uses as you can for that object.

2. List as many similarities as possible between two dissimilar objects (e.g., a cat and a refrigerator or an electrical outlet and a paintbrush).

Grace, Ambidexterity, Fitness, and Poise With few exceptions, the great geniuses of history were extremely physically fit individuals. Da Vinci was a skilled equestrian who also walked, swam, and fenced to keep in physical shape. Although you do not need to have the prowess of an Olympic athlete in order to be creative, cultivating physical interests can definitely

get your creative juices flowing.

Adrenaline is a stimulant that increases brain activity, emotional intensity, and speed of thought. So it makes sense that a physically active person might tend to be more creative than a less-active individual. The more active an individual is, the more likely that person is exposing himself to a broad spectrum of experiences.

Systems Thinking Systems thinking uses a broad perspective that includes seeing overall structures, patterns, and cycles in the system, rather than seeing only specific events in the system. It involves taking a macro look at the world or an organization, rather than only seeing discrete, individual units or events. A frequently used example of systems thinking is this: If a butterfly flaps its wings over Tokyo today, it will affect the weather in New York next month. Finding this interrelationship of seemingly unrelated activities requires a systems-thinking approach. It requires a creative mind to comprehend how every event within an organization helps shape the future of the organization; it requires an even more creative mind to channel those collective events into a successful marketing campaign, product launch, or record earnings.

The ability to be more creative can lead to fame and fortune and provide a deep sense of personal satisfaction. Within an organization, creativity is an essential tool for effectively solving problems and generating new ideas. Nobel Prize winner Linus Pauling said, “The best way to have a good idea is to have lots of ideas.” And the best way to have lots of ideas is to stimulate and encourage the creativity of your workforce.

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TECHTALK

Best Practices in the Workplace: Visual Management

By Marie Turner, Autoliv Production System Coordinator

Marie Turner

“What is a visual workplace? It is a work environment that is self-explaining, self-directing, and self-improving. A visual workplace allows the entire work team to know the condition of a work site at a glance. In today’s manufacturing environment, everyone has limited resources, so it’s imperative to use those resources to the best advantage. To do that, you want to be able to identify and manage abnormal events (because normal events mean that things are running well). A good visual management system allows you to see what is truly abnormal; this allows you to react quickly to fix the problem.

What Are Abnormalities?

In order to manage abnormalities, you have to know what they are. This is where policy deployment is critical, policy deployment sets the goals and expectations of an organization. Through policy deployment everyone—to the individual associate in a cell—knows what those goals and expectations are and how each individual can work to meet and affect them. If all associates know exactly what goals must be met, then abnormalities (that is, not meeting the goals and expectations) become immediately obvious.

So the first step is getting your goals defined and then taking them all the way to each cell. At Autoliv we have more than a hundred cells, and the associates in each cell have clear expectations of what their safety, quality, delivery, employee, and cost metrics are. Anyone can walk by a cell and with a glance at the Production Performance Analysis Cube and see how that cell is doing toward achieving their goals.

Once you have a clear set of goals and expectations for each cell, you must then have a set of protocols for abnormality

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visual

management. Autoliv uses “zip lines,” which make it quite obvious whether a cell is operating in the green (normal) or in one of two levels of abnormality (yellow or red).

Different protocols are in place and clearly indicated so that abnormalities can be addressed quickly. If a cell goes yellow, for example, a supervisor is immediately notified so that they can decide if resources must be pulled from other cells to help address the problem. The protocols, which include definition, responsibility, and reaction, are displayed at the cell, so anyone can come into the facility and know the protocol for any given condition. This process establishes a baseline for improvement and a built-in system to react to problems.

Implementing a Visual Workplace A key consideration when implementing a visual workplace is to remember that the more visual protocols or instructions you have, the easier they are to follow. Labels and cutouts make it extremely easy to get workers to put equipment or tools back in the correct location. Pictures of items as they should look in a normal condition helps make sure the workplace standard is upheld.

In a visual workplace, a picture really is worth a thousand words because people do not read everything they see. A pictorial explanation will reach a much larger group of people—those who can’t read, those who don’t speak the language, and those who are in too much of a hurry to read.

A good standard to use when setting up a visual workplace is to ask the question, “Could a child understand this?” If the answer is “yes,” then it is probably a good visual standard.

Once you have standards in place that you feel are value added, you can set up the visual system, and then all that’s needed is to manage the system. With a good visual system anyone can tell at a glance if the standard is being violated. This means they have time to manage other things and be proactive.

Complete management buy-in is absolutely necessary, even with a strong visual management system. If you have the reaction protocols in place and a good visual management system, and the managers don’t follow up, it sends a bad message. If our plant manager is on-call and willing to come in the middle of the night to deal with abnormalities and the supervisor didn’t stop and follow the protocol as needed, what kind of example would that set for the people in the cell? If a manager walks by and sees that a zip line is in the red and continues on without reacting, a new de facto standard has been set, and it’s not a good one. The manager is saying the situation is not important. That’s not the message the rest of the associates should be getting. The beauty of a good visual management system is that it’s very easy to see work conditions: discipline is important to react to abnormal signals, no excuses.

This is ongoing and constant.

Likewise, if the teams are clear on their expectations, they just roll. They have a clear definition of what’s going on and what they need to do and they just take it and go.

They can do what they need to do if they know what’s expected of them. However, it’s critical that management cares and follows up when there’s an abnormality.

Power to the People Team members in the cell have the power to make changes and improvements to their processes. If it’s something they can do themselves, and does not require customer approval, they just do it. If it’s something they do not have the resources or time to do, they can fill out a kaizen suggestion form. Each supervisor has a technical person

1 Make your workplace into a showcase that can be working for them whose sole responsibility is to implement kaizens. This has really helped with the continuous improvement philosophy of the teams. They develop faith in the kaizen system as ideas get implemented, and this encourages them to generate more kaizens. Last year our goal was 20 kaizens implemented per associate.

This year we set the goal at 40, and we’re knocking it out of the ball park. A lot of these are very simple kaizens, but the savings can add up dramatically. Saving a second, five times a day can save you half a shift in a year. When you look at our overall cost improvements for our plant, the savings have been huge. And if you ask anybody if we had any major steps in that process, the answer would be that we’ve had a few, but most of the savings have come from the little kaizens that just continue to add up.

We’re a big company and so we have a lot of opportunity for benchmarking. There are four facilities in Utah we can benchmark with and it doesn’t cost us anything but a half-hour drive. Recently we went to a different facility and reviewed their visual management system and the good ideas they had, and we in turn shared our visual management ideas. We have excellent resources right at our fingertips and we’ve begun tapping into them recently to share information and best practices.

Remember that a visual management system provides shared information that is easily and quickly understood. It speaks to you and leads you to improvements. To paraphrase Taiichi Ohno, founder of the Toyota Production System, “Make your workplace into a showcase that can be understood by everyone at a glance …When this is done, problems can be discovered immediately, and everyone can initiate improvement plans.” This is the true power of a good visual management system.

understood by everyone at a glance.

2 In terms of quality, it means to make the defects immediately apparent.

3 In terms of quantity, it means that progress or delay, measured against the plan, is made immediately apparent.

4 When this is done, problems can be discovered immediately, and everyone can initiate improvement plans.

Managing Times | July/August.07 www.tbmcg.com/news/newsletter.php

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FIELDNOTES

Lean Awareness Training for Everyone!

Mike Serena

Mike Serena, managing director of the TBM LeanSigma® Institute Worldwide along with the internal Total Customer Value (TCV) continuous improvement champions at Enpro have been conducting a series of two-day lean awareness training classes across Enpro’s international sites. The curriculum includes not only the training of lean principles and concepts but also applies the classroom learning and skill sets to both product simulation and “on-the-floor” application at each manufacturing site. Training targets not only shop floor operators but also production supervision and support personnel. A senior management awareness and sustainment session is also scheduled at several sites.

Enpro is planning to provide lean awareness to all of its employees to communicate its commitment to establishing a learning organization and clearly define the roles,

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Managing Times | July/August.07 www.tbmcg.com/news/newsletter.php

expectations, and opportunities for employee involvement and ownership. This training will also promote a “train the trainer” format such that all instruction will be conducted by the existing TCV champions as part of their role as internal lean consultants.

The two-day lean awareness training consists of several modules in a “learn-anddo” format with specific key lean learning objectives as outlined below: • Introduce the key principles and concepts of lean production to all levels of the organization.

• Demonstrate learning and skill sets utilizing an individual and subteam format to demonstrate both teamwork and effectiveness.

• Actively involve site employees in the application of lean learning to each of the facility’s production, process, and office areas.

• Involve and include key production support personnel in order to evaluate how they might best contribute the success of production areas and better respond with a “manufacturing sense of urgency.”

Gain a better understanding regarding site-launch initiatives, timelines, expectations, and the key performance indicators and targets that will be used to measure the success.

Create opportunities for participation, involvement, and discussion as well as provide examples as to how each employee can make a difference each day in their respective work areas.

The Two-Day Curriculum Initial training begins with establishing an understanding of what is “world class,” not from a Toyota perspective, but from the industry and international competition that Enpro organizations face each day. Once this world-class standard is understood, the participants discuss the specific barriers they perceive to exist at their site that prevent or slow their progress in their journey to becoming world class. Participants are asked to rank their site’s current lean status against key lean transformation concepts so that a “gap analysis” can be identified. Following this active and candid discussion, participants are introduced to the concepts of lean

production and the timeline that is often involved in establishing both lean and cultural transformations. The discussion is reinforced by the class conducting a “gemba walk,” where concepts and opportunities for improvement are observed specific to the areas of material, staffing, machinery, method, and ergonomics.

As the class reconvenes, an overview of the LeanSigma® approach with specific instruction regarding the effectiveness and impact of lead-time reduction and waste elimination as it relates to productivity are discussed. Further, several case studies from different companies across a range of industries are presented and discussed for applicability. Simulation exercises follow.

The second day of training includes a thorough discussion of the lean production system, including the concepts of takt time; one-piece flow; establishing standard work; supermarkets, pull systems, and just-in-time; standard work in process; set-up reduction; jidoka (ensuring equipment quality and productivity); and production smoothing.

Again, simulation exercises emphasize the effect of introducing the lean concepts and how an organization can and should leverage operational excellence into profitability and growth.

The importance of establishing a visual managed workplace through standard work along with progressive 5S through organization and discipline and the importance of abnormality management is discussed in relation to its role in “sustaining the gains.”

The course also provides an in-depth look at value-chain mapping and its effectiveness in recognizing opportunity and creating a future-state vision of the organization. Key aspects of tracking quality issues and problem solving through root-cause analysis are also thoroughly discussed.

The final module takes a closer look at “point” or mini kaizens and explores the principles of motion economy, along with the principles and processes involved with the kaizen breakthrough methodology and the advantages of conducting ergonomicand energy-improvement projects.

If you are interested in a similar program for your corporate sites or have any questions please contact the TBM LeanSigma® Institute at 800-438-5535.

Think Sync: Because Synchronized Value Chains Beat the Rest Every Time

I

n an effort to help companies who have successfully started their lean journeys and who are thinking about taking lean to the next level— moving beyond operational excellence on the shop floor to try implement lean throughout the value chain, TBM has created a booklet, Think Sync: The Competitive Advantage of a Lean Value Chain. It describes the challenges manufacturers face today and traces the lean evolution that has produced industry leaders such as Toyota and Sealy Mattress and, through the stories of TBM clients, explores the impact of lean on four key areas of a lean value chain.

The booklet defines the phrase “lean value chain” and contrasts that with traditional supply chain management. It can help you identify the leading indicators of a value chain in need of improvement and offers a clear explanation of the dynamics of a lean value chain and how a lean value chain can be used to position a company for growth. The booklet also addresses how a lean value chain can help a company improve demand

CONSIDERTHIS!

management, order fulfillment, business planning and scheduling, and supply management.

If you consider your value chain—the activities that take place to transform raw materials into products—each step in that chain can add value to the finished product if it operates efficiently. But if you suffer high inventory, long lead times, erratic demand, poor on-time delivery, or other symptoms of inefficiency, those non-value-added steps damage your ability to compete.

By applying lean to your entire value chain, you reduce waste, improve quality, and accelerate delivery at every link. Your customers get the right products at the right time and at the right price. As a result, you create greater value for your customers and achieve significant competitive advantage.

Think Sync outlines an approach to developing a lean value chain that has been proven effective by TBM Consulting Group. To request a copy of the lean value chain booklet, contact TBM at 800-438-5535.

Winners of Fourth Annual Perfect Engine Site Award Announced

Hayward Pool Products (Pomona, California) and WIKA (Lawrenceville, GA) were presented the Perfect Engine Site Award in recognition of their commitment to the continuous improvement philosophy and dedication to a lean culture.

“The Perfect Engine” refers to the precision interworking of human resources and physical assets to achieve outstanding productivity results that create business agility, growth, and profitability. The Perfect Engine Site Award recognizes individual plants or offices that have successfully implemented LeanSigma® methodologies and have demonstrated innovation and outstanding teamwork in creating visually-managed environments that feature one-piece flow.

TBM President and CEO Anand Sharma presented the awards to Tom Henderson, manager of continuous improvement at Hayward Pool Products, and Michael Gerster, president of WIKA Instrument Corporation, at the 14th annual Lean Leaders Exchange in Salt Lake City, UT.

Hayward Pool Products has been on its lean journey for eight years, and it continues to use lean principles to innovate, develop, and launch new products. Hayward has also leveraged its competitive advantage into growth in market share, sales and earnings.

From 1999 to 2007, the site has executed more than 400 kaizen events with the following results: • Shipments increased 120 percent with a moderate workforce increase of 15% • Productivity measured by shipments per employee increased by 64 percent • Work-in-process (WIP) inventory was reduced by 77 percent WIKA-Alexander Wiegand GmbH & Co. is celebrating its sixth anniversary on its lean journey. From 2001 to 2007, the company has implemented more than 700 kaizen events worldwide with the following improved results: • Productivity improved by 20-40 percent • Lead-time reduced from five weeks to four days • Workforce increase of 331 percent

“WIKA and Hayward Pool Products achieved the Perfect Engine designation because of their proven ability to implement and leverage cutting-edge processes that facilitate agility, continuous innovation, and synchronization to assure the prosperity of the enterprise,” said Sharma. TBM offers kudos to both companies for their many successes in their lean transformations.

Managing Times | July/August.07 www.tbmcg.com/news/newsletter.php

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July/August.07

MANAGING TIMES TBM LeanSigma® Institute 2007 Event and Workshop Schedule Corporate Headquarters 4400 Ben Franklin Boulevard Durham, North Carolina 27704 USA 1.800.438.5535 Australia 403A 86 Bay Street Port Melbourne, Victoria 3207 Australia 03 9681 7385 Brazil Avenida Moema 170, cj 45 Sao Paulo -- SP Brasil 04077-020 55.11.5051.7490 China Room 3, 3/F, POS PLAZA 1600 Century Avenue Pudong Shanghai, 200122 P.R. China 86.21.6888.6671

Business Process Kaizen Instructor Training Oct 23-26

Design for LeanSigma ® New Products and Processes Sept 17-21

Durham, NC

Dec 10-14

Durham, NC

Kaizen Breakthrough Experience Nov 5-9

Vermeer Manufacturing, Pella, IA

Nov 19-23

WIKA Wiegand GmbH, Klingenberg, GR

Kaizen Promotion Office Workshop Oct 2-5

TBD, UK

Oct 2-5

TBD, BR

Nov 6-9

Durham, NC

Dec 11-14

Shanghai, CH

Lean Management Accounting Sept 18-19

Mexico Calzada San Pedro #250 Nte. Edificio HQ Col. Miravalle CP 64660 Monterrey, NL 52.81.50.00.91.36 Switzerland 29, route de Pré-Bois 1215 Geneva 15 Switzerland 41.22.710.77.70 United Kingdom 3 Gleneagles House Vernon Gate DERBY DE1 1UP United Kingdom 44.1332.367378

Durham, NC

Nov 14-15 Durham, NC

Lean Sigma® Fundamentals Sept 11-12

Mexico

Lean Sigma® for Process Industries Oct 24-25

India “Technopolis” Sector-54 DLF Golf Course Road Gurgaon, India 122 002 91.124.437.5995

Durham, NC

Sao Paulo, BR

LeanSigma ® Vision Tour Oct 15-19

TBD, US

Management for Daily Improvement Sept 17-21

TBD, Monterrey, MX

Nov 12-16

WIKA Instrument Corp., Lawrenceville, GA

Shop Floor Kaizen Breakthrough Instructor Training Sept 25-28

Shanghai, CH

Oct 9-12

Durham, NC

Oct 30-Nov 2 UK Dec 4-7

Durham, NC

Quest for the Perfect Engine TM Aug 29-30

Shanghai, CH

Sept 4-5

New Delhi, IN

Sept 17-18

UK

Sept 20-21

Paris, FR

Oct2-4

Pomona, CA (Hayward plant tour)

Oct 18-19

Munich, GR

Nov 13-14

Hong Kong, CH

Nov13-14

Argentina

Nov 13-14

Mexico

Nov 19-20

Madurai, IN

We realize that many of you are identifying your 2008 training needs during 4th quarter. The TBM web site will feature an updated training calendar very soon.

In the meanwhile, please be sure to call the TBM LeanSigma Institute if you have any questions about course dates and prices.