Chapter 4

Fundamental Lean Concepts, Tools, and Techniques

Although project managers (PMs) do not have to be Lean experts, they should be familiar with the concepts, tools, and techniques for managing and leading a Lean project, shown in Figure 4.1.

For ease of understanding, the material is presented in this sequence:

• Determine Context
• Capture Existing and Proposed Value Streams
• Define Requirements
• Collect Data and Information
• Perform Analysis
• Apply Tools and Techniques for Solutions
• Make Recommendations
• Plan and Execute for Results

4.1 Determine Context

Project managers have many responsibilities. One of these responsibilities is to understand the environment in which their projects will occur.

There are essentially two types of environments in which Lean projects occur. One environment is known as brownfield, whereby the Lean project or projects will seek to transform an existing facility or organization that employs mass-productionlike processes, methods, and techniques. It is essentially the typical traditional stovepipe environment with characteristics such as being bureaucratic, anticipating customer needs, and stocking inventories. The other environment is creating a new facility or organization employing best practices, methods, and techniques. This environment, known as greenfield, seeks to eliminate the shortcomings and excessive overhead of the brownfield environment.

Most project managers rarely have the opportunity to manage a Lean project in a greenfield environment; instead, their experience is mainly in the brownfield. To some extent, the brownfield environment is more difficult for several reasons. The project managers must challenge the status quo, thereby potentially generating resistance from those people or organizations having something to lose. It also takes a brownfield project a much longer time to complete to resolve political differences and obtain approvals for any significant change. The challenge to the greenfield environment is also fear but for different reasons. One reason is the dearth of knowledge and expertise by people who must institute new processes, methods, and techniques. The other is fear of failure. A new facility or organization must demonstrate its worth in satisfying the customers, especially if the greenfield promises to outperform the brownfield environment. Some stakeholders in the brownfield environment may wait for the greenfield to fail.

In this book, the emphasis is on applying project management (PM) on Lean projects in the brownfield environments.

Selecting a project to apply Lean must be tied to the strategic goals and objectives of a parent organization. In other words, the strategic and tactical operations must link with one another and operate in concert; otherwise, as mentioned earlier in the PM chapter, a layer-cake effect exists, whereby the top layer and the bottom layer are askew, as shown in Figure 4.2.

Lean adopts what is known as the Hoshin Kanri planning system, whereby a systematic approach for decision-making at the strategic and tactical levels aligns them with each other to achieve business objectives. The whole idea is to ensure alignment with the long- and short-strategic and tactical behavior by identifying strategic goals and objectives with the latter being measurable, developing tactical objectives to achieve the goals and objectives, measuring progress toward achieving both strategic and tactical objectives, creating a series of tables to review progress on a regular basis among different levels within an organization, and applying a continuous improvement perspective.

Hoshin Kanri is predicated on numeric performance, specifically financial. Not everything occurring in an organization is measurable from a financial perspective. Quite frankly, it is often more the nonfinancial aspects that make or break a project, program, or initiative, regardless of project, whether Lean or non-Lean. Many companies track performance using what is known as a balanced scorecard. The balanced scorecard is a way to offset the devastating effects of relying solely on financial metrics. Its purpose is to look at the strategic performance from different perspectives, frequently using four variables: financial, customer, internal business process, and learning and growth. For each category, measures are developed that enable tracking performance in the four areas albeit in some organizations a different set of variables may exist.

One advantage of a balanced scorecard is that it provides a holistic perspective as opposed to a narrow financial one. Another advantage is that it demonstrates the need to apply measurable criteria to track other areas of interest. Like Hoshin Kanri, a balanced scorecard should be reviewed periodically after measurements have been taken and followup conducted on the results.

Armed with information from Hoshin Kanri and the balanced scorecard, project managers of Lean projects have a good idea how to posture their Lean projects to fulfill the strategic goals and objectives of the parent organization. In many cases, a business case may be developed to determine if a project is warranted and, if so, the project becomes part of a portfolio of projects. The business case should reference in its justifications the contents of the Hoshin Kanri and balanced scorecard efforts. The business case is then reviewed periodically against the performance of the project to ascertain the realization of benefits and whether corrective action is necessary.

The next action is to formulate a well-balanced team with the requisite knowledge, background, and expertise. This team consists of a core membership for the Lean project, meaning the strategic and tactical decisions are made by this group. It consists of a project manager who has overall responsibility for the leadership and management of the Lean project; a customer representative, the person or organization benefiting from the Lean project, who has the requisite knowledge of their business and who can make decisions on behalf of the customer’s management; a sensei who provides the knowledge and expertise to guide the team on Lean concepts, principles, and practices, and who has a mastery of relevant tools and techniques; subject matter experts, particularly on the overall business process being “Leaned out” and any specialized knowledge as well, and serve as authoritative sources for guidance, information, and problem resolution; a facilitator to conduct team meetings and workshops and to help team members collaborate in an environment that enables open communications and builds trusting relationships; on occasion, a project champion, also called a sponsor, to provide support by setting and sustaining the direction and momentum through a project’s life cycle; and any other stakeholder deemed essential to the success of the project.

The actual identification of the team members, especially core team members, at this time, is done by conducting a stakeholder analysis. This analysis, of course, depends on the scope of the process being Leaned out. The selection of certain stakeholders on the core team should likely be done with the input and guidance of the project champion and, sometimes, with the direction of a steering committee. Regardless, stakeholder analysis should seek to identify and analyze the individuals and organizations that participate in the current process, or value stream, and any future ones. Later in this book, the challenges of identifying stakeholders are discussed.

A Lean project basically seeks to remove waste in an effort to achieve one overriding goal: customer satisfaction. Admittedly, the term customer satisfaction is an ambiguous term that often leads to disagreements, conflicts, and disappointments. Lean hopes to deal with this ambiguity by insisting on meeting the expectations surrounding customer satisfaction by meeting some subsidiary goals.

One subsidiary goal is to identify and address requirements and expectations of the customer through communication based upon pull rather than push. Pull is the movement of resources from the end of a process, or value stream, for example, delivery to the customer, to the beginning of the value stream, for example, request or order, upon receiving some type of signal to deliver a product or service. Push is the movement of resources from the beginning of the value stream, for example, design, to the end of the value stream, for example, delivery based upon forecasting a customer’s need for a product or service.

A second subsidiary goal is to remove waste that may interfere with pull. Waste consists of operations, activities, resources, and the like that generate output that provides no value to the customer, also referred to as non-value-added. Waste interferes with pull by the customer and adds to inefficiencies, which is wasteful. No waste is considered sacrosanct; if it fails to add value it is targeted for potential removal.

A third subsidiary goal is, therefore, is to seek perfection, which is eliminating waste. By striving for perfection, the process, or value stream, is based upon pull by the customer. Waste is what interferes with this pull. A process is one step closer to perfection when waste is removed.

A fourth subsidiary goal is to achieve continuous flow, which is the ongoing uninterrupted execution of a process. Under continuous flow, pull, not push, reigns because stoppages, scrap, and other waste are virtually nonexistent, especially if perfection is achieved. The lack of continuous flow is due to waste, which is not a state of perfection according to Lean.

For a Lean project to succeed in achieving those subsidiary goals, and the ultimate goal of customer satisfaction, the following conditions must exist just to allow the team to work effectively. Theoretically, these conditions make sense; realistically, they often pose a significant challenge.

Open book management is one condition. All information, and especially managerial in nature related to a process, should be available to all employees who seek to provide value to a customer. Just about all information, including proprietary or competition-sensitive information, must be available, which, quite honestly, often makes management nervous. If Lean is to achieve its goal, however, people require open book management. Think for a moment. If people try to improve a process, especially a complex one, and are not allowed access to data and information that they need to remove waste, they must operate on assumptions. Assumptions are treated as true until proven otherwise. the challenge arises when some people base their thinking on erroneous assumptions without realizing it. If they have actual facts, data, and information on hand then they can debunk certain assumptions. as Alan Mullaly, a top executive formerly with Boeing and Ford says, the data will set you free.

Gemba is another condition that must exist for Lean projects to succeed. Gemba is visiting the location where the work is actually being performed. Through visitation, people will better understand the work of the customer and how to add or increase value to the customer. People on Lean projects need to know and understand the customer’s needs and wants to agree to or come up with recommendations for improvement. It pays for some people on Lean projects to step away from their computer screens as well as their cubicles and offices and to go periodically where the action is, whether inside the company or at the customer’s site. This concept is related to the managerial concept of management by walking around (MBWA), whereby people visit places to see what is happening and do not just compile data in an electronic file. Visiting the place of action enables seeing exactly what is occurring, taking note of what is and is not working, and obtaining reliable data and information about process performance. This set of actions is known as three (3) gen in Lean parlance. By the way, practicing gemba is another excellent way to debunk assumptions.

Known as quality functional deployment (QFD) in Lean-speak, this condition involves establishing a multidisciplinary team that focuses on customer expectations and needs to ensure the value stream satisfies the customer. This multidisciplinary team offsets a host of problems that often plague teams, including functional myopia and groupthink. By establishing a multidisciplinary team a holistic perspective is possible, offsetting these problems. Multidisciplinary teams also get people engaged early on through discussions, as well as eliminate many misunderstandings. Such teams also help them to get a better understanding of the big picture and to see how their area of responsibility and those of others fit within the value stream.

A final condition for effective Lean projects is to establish tollgates, which are also referred to as stage gates or check point reviews. Tollgates are meetings held at specific phases of a Lean project life cycle to determine progress to date and to decide whether to proceed from one phase to the next. Tollgates serve as a sort of timeout to determine what has been done to date and whether the time is right to proceed forward. In a sense, it is quality control for the Lean project. Tollgates reduce the chance of oversights that can result from making decisions endangering project success.

There are several approaches toward Lean projects, depending on the extent of change that will affect a value stream. Keep in mind that the purpose of Lean is to focus on the customer by providing value through eliminating waste while simultaneously increasing quality.

There are two fundamental orientations to pursue Lean in an existing, or brownfield, organization. The first orientation is to transform the organization radically with a complete set of processes. Lean has a term for this orientation, called kaikaku. It is the radical version of Lean, whereby breakthrough changes are identified and implemented with speed and impact over a short timeframe. The changes are essentially wholesale rather than incremental.

The opposite side of the spectrum is kaizen. Changes are implemented incrementally. Radical change, if it does come, is with less intensity and impact than kaikaku. The pursuit of perfection occurs in small steps until waste is removed from the process. This book focuses on kaizen, not kaikaku.

Kaizen can be executed using one of two structures, or life cycles. The first is using the PDCA cycle and the other, DMAIC, as shown in Figure 4.3.

PDCA stands for plan, do, check, act. These are the four phases of the cycle, with plan involving determining the problem or issue; do is developing and implementing a solution; check is for determining the effectiveness of the solution and making necessary changes; and act is for taking corrective action. The entire cycle repeats itself until perfection has been reached.

DMAIC stands for define, measure, analyze, improve, and control. Define involves determining exactly the problem or goal, measure for establishing metrics and a baseline for performance, analyze for identifying and validating the root cause, improve for testing and implementing the solution, and control for monitoring the effectiveness of the improvement and exercising change management.

Both life cycles work. The original differences between the two are that PDCA is less mathematical in nature and DMAIC relies more on calculations. DMAIC is associated with Six Sigma, which is employed at Motorola. Over time, either PDCA or DMAIC can be applied on Lean, with or without the emphasis on statistical methods. This book uses both the PDCA and DMAIC life cycles.

4.2 Capture Existing and Proposed Value Streams

Whether using the PDCA cycle or DMAIC, it is important to know something about the current process and, employing the PDCA or DMAIC life cycle, to have some idea of the new one that will be the result. The current process is commonly referred to as a value stream, consisting of operations and activities of a process, such as placing an order, to the completion of a process, such as delivery to the customer. The value stream may be more comprehensive, reflecting all operations, procedures, and activities, value and non-value-added, from the point of extracting raw material, such as data or minerals, to the delivery of the product or service to the customer.

The value stream is reflected in maps. These maps make understandability relatively easy in comparison with other ways to display information. Waste is often hard to detect because it is invisible to most people and difficult to articulate to others. Many people lack the jargon or knowledge of process improvement or they have difficulty in seeing and assessing the big picture due to the narrow specialty of their work or their position in the organization. With the help of a map, replete with symbols and specific data and information, people can overcome such limitations and can provide insights as an individual or team member to help remove waste (refer to Figure 4.4).

Three maps, generically referred to as a group as value stream maps, graphically display the routing of materials, information, and other resources through the operations and activities of a process up to the delivery of a product or service to the customer. The three maps are current state value stream map, future state value stream map, and ideal state value stream map. Figure 4.5 is an example of a generic value stream map.

The current state value stream map displays the sequence and interaction of elements of a process that currently exists. It is often referred as the To-Be map.

The future state value stream map depicts a process in an improved state, serving as a stepping-stone to a perfect state where continuous flow exists. The ideal state value stream map depicts a process in a perfect state, providing only value-added operations to achieve customer satisfaction. The ideal state value stream map reflects a process in a perfect state whereby only value-added operations and activities exist.

Value stream maps, whether the current, future, or ideal states, usually contain several elements.

A process is the first element. A process consists of one or more operations to provide a product or service to a customer. Each process has a processing time which is the amount of time that a product or service requested by a customer is being designed and built to meet requirements. A process often has a process owner who is the person, usually at a high level in an organization, responsible for the execution and output of a process. One or more processes can make up a value stream.

An operation is another key element. One or more operators are embedded in a process. It consists of one or more activities that stakeholders perform to execute a process. The performance of an operation with other ones can affect the performance of a process, negatively or positively, and indeed, the entire flow of a value stream. Flow, more specifically continuous flow, is the ongoing uninterrupted execution of an element, for example, an activity or machine, within an operation and thus a process. Ideally, under Lean, the goal is to have no waste that interferes with the delivery of a product or service to the customer.

Another key element of a value stream map is the customer, perhaps the most important one. A customer is the person or organization that receives the output of a process or a value stream. Under Lean, the customer is king. Anything that does not add value to achieving customer satisfaction is waste. Customer satisfaction is the outcome of a process or value stream that meets requirements.

Another key element of a value stream is the supplier, also known as a vendor or contractor. These are people or organizations that are part of the value stream, providing a component or service contributing to the final delivery of a product or service to the customer. In some value streams, many suppliers can participate with the person or organization having overall responsibility for executing a process or value stream. The person or organization having overall responsibility functions as an integrator of the suppliers’ contributions. As one would expect, the failure of a supplier can afffect the continuous flow of a value stream and negatively affect customer satisfaction.

These maps provide a wealth of data and information from which to define the current value stream and then to identify opportunities for improvement. They consist of symbols and numbers to define the current, future, and ideal states of a value stream. These symbols are often in the form of what people have used in information technology and process improvement projects in the past as well as road maps to explain business processes. These systems are often used to reflect operations, transportation or movement, decisions, inspections, delays, storage, direction of flow, transmission, suppliers, customers, and recording comments. One unique symbol is the kaizen burst, something of a miniature explosion, indicating and capturing an improvement idea that can help reduce flow time, decrease instability, and improve quality in a process, operation, procedure, or activity. The value stream map also captures related data and information concerning the value stream, under review for one or more procedures, operations, or activities. Data and information may include, but not be limited to, cycle, lead, and queue times; data and information requirements; labor and nonlabor requirements for availability or nonavailability; setup or changeover times; transportation distance and travel time; and quality requirements and defects.

Value stream maps, as described above, are just one way to analyze process flows. The standard process flowchart, SIPOC (suppler, input, process, output, and customer) flowcharting, swim lane charting, interrelationship digraphs, data flow diagramming, and spaghetti charts are additional ways to display a value stream. A SIPOC chart describes the relationship of five named elements within a value stream. A spaghetti chart is a diagram displaying the route that a product proceeds on through the value stream, traveling from one operation to another. A data flow diagram displays the flow of data among different categories of processes and different entities. An interrelationship digraph shows dependencies among different processes and entities using input and output arrows to ascertain the greatest impacts on a process from a cause and effect perspective. A swim lane chart is a flow chart showing the sequence of events of processes, decisions, and the like as they pertain to the different responsibilities of people or organizations.

Selecting the appropriate documenting approvals depends on familiarity with the technique, complexity of the process, and scale of application. A number of quality control tools can be used with any of the techniques chosen to display the current, To-Be, and ideal states. These basic quality control tools include cause and effect diagrams, check sheets, Pareto charts, histograms, statistical process control charts, scatter plots, affinity diagrams, and matrices, all of which are discussed in further detail along with others. For purposes of this book, value stream mapping is the preferred choice of describing the current, To-Be, and ideal states.

With the necessary data, information, and symbols, the team can review the current value stream to determine where waste occurs. Waste is defined as operations or activities that generate output that provides little or no value to the customer; it is also described as non-value-added. There are often seven forms of waste that might exist in a value stream: overproduction, overprocessing, excess inventory, waiting, rework or corrections, unnecessary transportation, and needless movement. Safety is the eighth form of waste that has recently been added to the list by many Lean practitioners. When identified in the current value stream map, these provide opportunities to identify where to make improvements and build both the future and ideal value stream maps.

Waste in a process can take one of three forms: muda, mura, and muri which are Japanese terms (refer to Figure 4.6). Muda is any activity or item in a value stream that does not add value, meaning the customer ascribes no importance to an aspect of a product or service in satisfying its requirements. Muda consists of operations, activities, and so on for which the customer is not willing to pay.

Not all muda is bad, of course, just because it does not add direct value. Known as Type 1 and Type 2, the former consists of those operations and activities that are non-value-added but still are important enough to the value stream, such as compliance with regulations. The latter are what really need elimination right from the start. Naturally, Type 2 muda goes first, followed by Type 1.

Mura is the second form of waste. This waste is reflected in the unevenness, or variation, in flow. A perfect example is an unleveled histogram showing an erratic high usage period of resources followed by a low usage period. Mura results in wasteful changeover and setup times or high inventory levels, to name two consequences. Mura should be kept to a minimum, just as with muda.

Muri is the third form of waste. This type of waste places extreme stress on part or all of a system, such as on people and equipment. The results are often burnout and breakdowns, whether an animate or inanimate resource. A perfect example of muri is safety problems resulting from people using equipment after working excessive levels of overtime.

Takt time is the key for dealing with muri and with the other two types of waste for that matter. The goal with takt time is to align production pace with customer demand. Takt time is calculated by dividing production time by the rate of customer demand. This alignment helps to reduce waste by providing a more predictable leveled application of resources.

Lean seeks to reduce and eventually eliminate muda, mura, and muri. Reducing and eliminating all three can result in a more efficient and effective flow based upon pull by the customer rather than push by the producer.

Some common areas to look for opportunities to remove waste and improve quality include records, procedures, training, media, specifications, designs, quality methods, and relationships with suppliers and the customer. The key is to not overlook any opportunity to remove waste. If an opportunity for removing waste arises at any time, a common practice is to record it on the map using a symbol known as a kaizen burst to capture the improvement idea.

Reviewing the current value stream map reveals many areas containing waste. They are often caused by several generic factors affecting the continuous flow of a process.

A constraint is one generic factor. It is any restriction that limits a potentially high performance level of a process or operation. An example might be a policy or procedure that restricts procurement activities of key stakeholders. Constraints can be tangible, such as purchases above a certain level require capital approval from executive leadership or intangible, such as culturally accepted ways to conduct business.

Closely allied with a constraint is an impediment. An impediment is a business or technical issue, problem, or other concern that negatively affects and restricts the continuous flow of a process. An example of an impediment might be an uncooperative labor force that continually threatens to, or actually does, sabotage outsourcing agreements. Another example of an impediment is senior management requiring approvals for even the smallest level of expenditures due to a lack of trust in its mid- to lower-level management.

Another generic factor that may have an impact on the continuous flow of a process is the lead time. In the context of Lean, lead time is the cumulative time a customer must wait to receive the final product after submitting an order or request. Lead time can seriously affect the delivery of a product or service especially in an environment where the customer wants it faster, better, and cheaper. Too long a lead time, more than what competitors offer, is a surefire way to lose business. Lead time is not just for the delivery of a product or service. For example, a long lead time to receive resources from suppliers to produce interim deliverables can also affect the overall delivery of a product or service. The shorter the lead times for interim deliverables that make up the final product or service also results in an overall faster delivery to the customer, thereby sustaining or advancing competitive advantage.

Changeover or setup times are another generic factor that may affect the continuous flow of a process. Changeover is the transfer from a current operation to another one. Jumping from one operation to another affects the continuous flow in several ways. People take time to get up to speed on the new operation as well as ceasing work on the current operation. Sometimes, people may have to switch back and forth from one operation or activity to another which takes additional time and effort to get back up to speed once again. Too many changeovers can result in delays and mistakes. By reducing the number and length of changeovers the less chance of a significant interruption of the continuous flow of a process.

Another generic factor that can interrupt the continuous flow of a process is the lack of standard work operations or activities. Standard work requires following a common approach, toolset, and techniques. Through standard work, people communicate more effectively and efficiently with each other, know what is expected of them, can clearly understand the impact of an impediment or constraint on a process flow, and more easily identify opportunities for eliminating any of the different forms of waste.

4.3 Define Requirements

As mentioned many times already, Lean is a customer-focused approach that concentrates on providing value by eliminating waste and increasing quality. It is important, therefore, to know the customer quite well in order to eliminate waste and increase quality. A major way to do that is to understand the customer’s requirements.

Requirements are the criteria that the customer deems of value that the producer or service-provider must satisfy. Addressing the criteria can result in customer satisfaction, which is the outcome of a process providing a product or service that meets customer requirements. These requirements are captured in various forms, which are commonly described in a requirements document or specification or model, also known as a prototype. Models, of course, do not need to have a look and feel per se. A model can be diagrams reflecting processes, procedures, and components of a system, among others, as a way to improve understanding and developing ideas. In the end, the To-Be and ideal state value stream maps are models of the future; the current value stream is a model of what presently exists.

The inability to capture requirements adequately can result in a host of problems and challenges for any Lean endeavor. These problems and challenges include poor communications, lack of teaming, incomplete deliverables or services being delivered, general frustration, conflict among significant stakeholders, constant rework, blown schedules and costs, scope creep, and much more. In many situations, the customer, not just the project team, has no idea what is needed and wanted and, yet, someone has to take the initiative to determine the requirements exactly.

An important concept of requirements satisfaction is the voice of the customer, or VOC (shown in Figure 4.7). The VOC is collecting the explicit and implicit needs, wants, desires, and expectations of the customer and then translating that information into a requirements specification. According to Lean, the customer is the focus; VOC plants the customer right in the center. It then becomes easier to identify criticality to quality characteristics, that is, activities or deliverables that the customer deems important to achieve the necessary level of satisfaction. There is a decision-making approach known as quality function deployment (QFD) that involves a multidisciplinary team focusing on customer needs and expectations early on in a value stream and provides measurable consistent performance. The use of burnup and burndown charts plays a significant role in counting up or down, respectively, requirements that result in customer satisfaction. A burndown chart is the completion rate of deliverables, for example, deliverables over a period of time; a burnup chart is the accumulation of deliverables completed, for example, deliverables over a given time period. A deliverable is a completed artifact that results in the delivery of the final product or service to a customer. Using burnup or -down charts as they relate to deliverables enables a measureable count to determine progress toward meeting the customer.

For many years, capturing requirements and distinguishing between what is and is not important has been a real challenge. Albeit it remains so today, requirements challenges exist to a lesser degree. Technology has enabled building a prototype, which is a model of the final deliverable or service that will provide customer satisfaction. From a Lean perspective, value stream maps serve as models to define current and future states. Anything that is non-value-added is waste and can result in poor quality. The transition from one model to another is largely based upon pull rather than push. Pull means moving information, resources, and so on from the end of the value stream to its beginning based upon receiving a signal to deliver a product or service. Push means moving information, resources, and the like from the beginning of the value stream to its end. The move from the current state to the To-Be and ideal states is one of moving from push to pull and reducing and eliminating waste interfering with the transition.

When developing value stream maps or any other types of documentation describing the current, To-Be, and ideal states, keep the following thoughts in mind. One, always have the right stakeholders participate in developing and reviewing documents: they should be people who have a good knowledge of the value stream and can offer useful insights for improvement. Two, avoid the tendency toward myopia: make sure that the stakeholders represent a good cross-section of all the disciplines participating in the value stream. Three, avoid cluttering the maps: consider showing information, not irrelevant data. If the flows get too complex, then stakeholders begin to tune out. Four, keep the flows on maps current. If the content gets dated for whatever reason, the maps start to lose their value and fail to serve as baselines for identifying areas of improvement. Five, strive for completeness in content. Models, by their very nature, are incomplete, and about the only way to compensate for that is to have the right stakeholders review each map and give their approval or disapproval. Six, and finally, frequently reference the maps. By doing so, it will help to ensure that the content is current but also that the Lean project stays focused on the end result. Remember, maps are more than a repository of data and information to reference throughout a Lean project. They also serve as a road map to guide the team from concept to reality by delivering a product or service to satisfy the customer by meeting requirements.

Once captured in a document, often called a specification, requirements are set as a baseline, which, in this context, serves as an agreement among two or more stakeholders. The baseline becomes the target. From a Lean perspective, all three value stream maps are set as baselines, meaning any changes will need to undergo evaluation as to impact, such as financial, schedule, and scope.

4.4 Collect Data and Information

A map shows the flow of data and information, and other resources, from the beginning of the value stream to the end. The flow itself can prove invaluable; however, additional data and information are usually needed to come up with recommendations for improvement after reviewing the current value stream map.

It is important to note, before proceeding, that a difference exists between data and information. Data are facts that have no meaning. Information is meaningful, that is, data analyzed and converted into content of value to a recipient. Collecting data for data’s sake is wasteful; collecting data to come up with information to produce or provide something of value is meaningful. Through value stream analysis, the goal is to collect useful data that will result in meaningful information which, in turn, leads toward determining opportunities for improvement. The current value stream is the vehicle to collect data and provide information on an existing process.

When collecting data and analyzing a value stream, consider following a few simple, often overlooked, guidelines. Failure to follow these guidelines can translate into erroneous information that can result in poorly formulated recommendations or overlooked meaningful improvements. These threats include introducing bias into the selection of data, treating unproven assumptions as facts during information interpretation, collecting an insufficient sample size from a given population, treating correlations as cause-and-effect relationships, the approach used to collect data or the collector’s characteristics influences results, not clearly articulating definitions prior to data collection, and treating a dependent variable as an independent one and vice versa.

Whatever the challenge with collecting data and drawing conclusions, take some important preventive steps. One, define all terms, also called operationalizing. Examples include terms such as customer satisfaction, where interpretation can vary wildly. Two, “scrub” data before conversion into information, such as ensuring no duplicates exist and that each datum reflects the same level of consistent quality, such as within a reasonable time period. Three, list and verify assumptions or at least be conscious of them in order to avoid introducing bias during collection. Four, be mindful of drawing false conclusions, such as saying a causal relationship exists among data when, in reality, it is correlative. Five, apply data stratification, that is, divide data into smaller populations to facilitate analysis and reporting while being mindful, of course, that the decision of where to stratify may influence results. The key is to strive for objectivity and minimize subjectivity when collecting data and converting the sample into information. Striving for objectivity makes it easier to ascertain the root cause for why something occurs, whether a defect or an event. A root cause is defined as a “real” factor that contributes to an outcome; by identifying the root cause it can then be influenced or manipulated to achieve a desired result.

Some data are necessary to conduct analyses of the current value stream, make improvements, and follow up with some measurements to verify and validate effectiveness.

Throughput time is one datum. It is the combination of processing and queue time for a product or service being delivered to a customer. These data provide a reliable measure of improvement in terms of time of delivery to the customer. By reducing throughput time more timely delivery is possible, assuming, of course, no degradation of quality occurs.

Defect rate is also an important datum. Defect rate is the number of occurrences within a given time period. The goal is to reduce the rate of defects by implementing recommendations to ensure that quality remains the same or improves.

Inventory levels are important, too. Under Lean, inventory levels add to overhead. The goal is to reduce overhead. It is important, therefore, to have accurate data on inventory and to ascertain, after the improvements have been made, whether inventory levels have decreased.

Unit costs are important as well. Unit costs can include labor or nonlabor. Ideally, unit costs should decrease as the overhead declines, allowing pricing to the customer to remain, or become even more, competitive. Improvements often result in more competitive pricing or greater returns to investors.

The above data and others can help identify opportunities for improvement by helping to pinpoint problems in the seven areas of waste mentioned earlier: transportation, waiting, overproduction, defects, inventory, motion, and excess processing. As mentioned earlier, an eighth form of waste has now been identified: safety.

With the data collected, several tools are available to display the results. Some of the more common tools are described below (refer to Figure 4.8).

• Benchmarking is the technique of comparing a company’s performance in a process with companies considered “best-in-class” and then improving process performance accordingly.
• Cause-and-effect diagrams are used to display the relationships, for example, causal or correlative, among two or more variables. A common cause-and-effect diagram is the fishbone diagram identifying causes grouped in several categories and displaying how they cause or contribute to a problem, issue, and so on.
• Control charts visually display information showing patterns of behavior over a period of time. A common control chart is statistical process control (SPC), reflecting dispersion around the mean, acceptable, and unacceptable specification limits.
• A frequency plot is used to display how often an event occurs. A check sheet is an example of a frequency plot.
• A Pareto chart is a graphical display showing the frequency of occurrence of an event or categories of events vis-à-vis other events or categories. The Pareto chart helps to determine the cause of a problem or issue by displaying the data in the form of a histogram.
• Scatter plots, also known as scatter-grams, are tools showing the relationship, casual or correlative, between two factors. The idea behind the display of data points is to ascertain the degree of relationship by looking at the tightness of the dispersion.
• Tree diagrams are graphical tools to display the relationships among multiple variables, usually from a top-down perspective. An example of a tree diagram is a network diagram showing the relationship among different variables based upon probability or likelihood and impact.

4.5 Perform Analysis

Using the data collected, the Lean project team can then start conducting its analysis. This principally requires reviewing the current value stream map and associated data to determine any opportunities to eliminate waste.

Waste, to reiterate, consists of operations or activities that generate output but provide little or no value to the customer. Another term for waste is non-value-added and the Japanese term is muda. The review should result in identifying impediments and constraints that contribute to waste and cause the process or processes in the value stream map to “choke,” thereby resulting in waste.

The goal is to eliminate all forms of waste which is frequently categorized in these eight areas: transportation, waiting, overproduction, defects, inventory, motion, excess processing, and, recently added, safety. Although all eight categories are presented as if independent of each other, yet they are more like Venn diagrams, overlapping. For example, overproduction and defects can lead to excess inventories, which, in turn, lead to waiting. Seeing these interrelationships among some of the categories is possible with a value stream map by enabling assessment of the subsequent impact on internal operations and activities and, ultimately, the customer. Reviewing the value stream map enables analysis to focus on identifying and fixing the root cause and not simply address the symptoms.

While conducting the analysis when reviewing the value stream, it is important always to ask the following questions: What is the goal of this process, operation, or activity? Who performs this process, operation, or activity? When does this process, operation, or activity start and stop and where is its sequence relative to the others in the value stream map? Where does this process, operation, or activity occur? How is this process, operation, or activity conducted, for example, manually and automated? Perhaps, most important, the following should be asked: Why? This question may be the hardest of all to ask because it leads to the heart of the analysis by challenging the status quo and could, quite frankly, lead toward eliminating what is considered a sacrosanct process, operation, or activity. A common way to ask that question is to apply the technique of asking why five times (and sometimes even more depending on the complexity). Why? Why? Why? Why? Why? Anyone with very young children knows what that is like because they always ask that question. The same principle applies here. The notion is that by asking why so many times a person or team can eventually identify the root cause of a problem.

In some cases, it may be worthwhile to develop additional charts that can supplement or complement a value stream map. A spaghetti chart can help reveal the route that a product or deliverable takes through a value stream. If it shows a circuitous pattern then that may provide an opportunity for improvement. Documenting a milk run where a transport vehicle makes multiple pickups at several locations, for example, can be captured in a spaghetti chart.

Another useful diagram is one that shows the layout of a work cell. A work cell is a multidisciplinary cross-functional arrangement of people, machines, and other resources to produce a product or service. The arrangement of resources can reveal opportunities for improvement.

The important point is that the value stream map is a tool to conduct analysis but it does not preclude the use of other techniques to conduct greater analyses, especially as one drills down into a specific process, operation, or activity. The value stream serves as a road map for improvement within and among processes, operations, or activities.

Armed with data and a map, an analysis can be conducted to determine the true cause of waste (refer to Figure 4.9). This requires reviewing the flow of a value stream to determine at what point waste occurs. In Lean jargon, this analysis is sometimes referred to as turnback analysis. A team goes through the map doing a forward and backward pass looking at the data and identifying any areas that could cause waste. It requires looking at the linkage among processes, operations, or activities to determine the cause of impact on each one and then ascertaining which ones may possibly be the cause. After identifying the opportunities for waste, the time arises to drill down to determine the cause. This approach requires using several tools to perform analysis, such as the ones discussed earlier, for example, Pareto charts.

Here are some problems to look for when conducting an analysis. Many of these problems were discussed earlier but should be mentioned once again only because they are often the most salient and prevalent ones popping up in a value stream. Be advised, once again, these are not mutually exclusive and the existence of one type of waste can be the result of another existing one.

Excessive inventory. These are parts, products, data, and other items that remain incomplete or unneeded at least for the moment. However, they can also include complete items that are piled up to deal with such problems as an inability to ascertain customer demand or to handle returns for whatever reason, for example, defects. Needless inventory results in increased overhead that adds costs passed on to the customer and ultimately affects competitive pricing. Excessive inventory may be the result of overproduction or poor transportation.

Defects. A defect, from a Lean perspective, is the output from a process, operation, or activity that potentially dashes a customer’s expectations, resulting in customer dissatisfaction. Defects can occur in a product or service. The goal, of course, is to reduce defects; too many of them not only result in customer dissatisfaction but also require substantial overhead by requiring a just-in-case inventory, litigation and warranty costs, poor reputability, and loss of market share. Defects also create a loss of confidence by everyone in the value stream, reflecting some serious underlying problems among key stakeholders participating in the process, operation, or activity in question.

Excessive lead time. In an international economy where resources may be coming from all over the world and assembled into a final product being delivered to a customer or providing a service, lead times are inevitable. The problem is that sometimes, if excessive, lead times can delay delivery to a customer. If a competitor can deliver sooner and provide an equal if not better product or service, all things being equal, the customer will prefer having output sooner rather than later. Lead times often result from erratic transportation and motion by key stakeholders in the value stream.

Long queue time. This one is the amount of time a resource, part, product, or service waits to proceed forward in a value stream. The longer the queue time is, usually, the slower the delivery of the product or service to the customer. Excessive queue time often results in many forms of waste. There is idle time as resources pile up creating excessive inventories, often described as batch-and-queue time, whereby parts, products, and the like are accumulated in large lots that are subsequently placed in a queue for use in a process, operation, or activity in the future. There is the chance resources decay, if perishable, requiring disposal, thereby adding to overhead. There is the challenge of overproduction, adding even more to overhead, with the excess inventory exceeding customer needs. Queue time may be coupled with lead time: if one is out of sync with the other then it can lead to excessive, or too little, inventory. Either way, the result is costly. The goal is to time production according to takt time, whereby production is in time with customer demand.

Large backlogs. This one is another area to investigate. A backlog is an accumulation of a workload with content that remains open, has not been prioritized, and is scheduled for fixing. These are often issues, problems, or improvements that need to be addressed but nothing has happened. Backlogs result in poor performance in a value stream because they remain unresolved. If left unattended, they can affect the quality of output and result in additional waste, such as rework and large inventories to provide a “quick fix” to a long-standing problem. Often, backlogs are the result of key stakeholders more interested in putting out fires, so to speak, than in addressing root causes. Failure to address backlogs, if they become really serious, can affect relations with the customer once they realize that the price paid for the product or service is padded to account for the waste resulting from not addressing backlog issues.

Changeover times. This is the time to transfer from one current process, operation, or activity to a new different one. As mentioned earlier, the goal is to reduce that time because it provides greater flexibility for responding to different situations. The more time for the transfer to occur, the greater the loss of productivity and an extension of the flow time for a value stream. This situation becomes a significant problem in work cells whereby people may have to shift to different tools and equipment. Stopping to proceed from one process, operation, or activity often requires either learning something new or getting up to speed, let alone increasing the need for better coordination and communication among stakeholders.

There are, of course, less tangible problems that may surface when reviewing a value stream. These are harder to identify but with a little more effort can be discernible by looking at the consequences of each one.

Lack of coordination. Synchronization is very important in a value stream; all stakeholders must work together to ensure efficient and effective performance. Any semblance of a lack of coordination results in waste. One process, operation, or activity that fails to work in concert with another to deliver a product or service to a customer typifies a lack of coordination. Engineering and manufacturing, for example, sometimes fail to work hand in hand to develop a part or component for technical equipment that will be delivered to the customer. Lack of coordination is often reflected in defects and failing to meet customer specifications. It can also result in excessive inventories to compensate for a lack of coordination. Finally, it can cause considerable rework.

Inadequate or no communication. Arguably, all of the above problems are the result of inadequate or no communication. During a large, complex value stream, this problem can manifest through rework, a lack of coordination, and defective workmanship because specifications were not clearly communicated or not communicated at all. Excessive inventories could also be the result of compensating for these shortcomings. In a value stream, the upstream processes, operations, and activities frequently communicate poorly with the downstream ones. According to Lean theory, a customer’s expectations are the drivers; however, if the information is misinterpreted or lost, pull is not possible. Everyone in the value stream must communicate consistently and persistently by sharing data and information to the maximum extent possible. A large part of those data and information centers on customer expectations and knowing what other stakeholders do in the value stream.

Poorly motivated workforce. Like safety, this one is a new addition to the seven forms of waste, now taking the total to nine. Safety is the eighth and is discussed next. A poorly motivated workforce does, indeed, lead to waste. People will likely not perform efficiently and effectively, resulting in unwanted inventories, defects resulting in rework, poor coordination, inadequate or no communication, and excessive waiting. How does one determine if the cause is a poorly motivated workforce? Look for clues, including negative conflict, people reluctant to share essential information, gridlock in the value stream, and turnover, just to mention a few. A poorly motivated workforce may be due to many tangible reasons, such as poor pay, as well as intangible ones, such as a lack of growth. Regardless of the reason, look for the indicators just described because a poorly motivated workforce can result in considerable waste in a value stream and may not always be discernible.

Safety problems. This problem has recently been added, too. Safety is a major concern because it deals with the health and welfare of stakeholders involved in a value stream. People are, indeed, the greatest resource in an organization because they apply the skills, knowledge, and experience to deliver a product or service to a customer. If stakeholders doing the work in a value stream are hurt, they cannot produce, leading to many other problems that result in waste: excessive queue and lead times, rework, defects, inadequate and poor communication, and lack of coordination. Safety problems are relatively easier to detect by tracking loss of work days due to injuries on the job, employees filing lawsuits due to working conditions, and the number of sick days taken by employees. It is important to note that these statistics may be due to other causes but also serve as indicators that people may not feel physically and, just as important, psychologically safe at work.

4.6 Apply Tools and Techniques for Solutions

A Lean project team began developing potential solutions to address the different forms of waste (refer to Figure 4.10). It understood the context, developed the value stream, identified requirements, collected data and converted them to information, and performed analysis to determine the problems or issues to address leading to both future and ideal states in a value stream. What follows is a high-level description of tools and techniques to address one or more of the different forms of waste.

Visual signals provide an effective means to improve performance. They not only improve communication but also coordination and adapting to situations. Kanban is a common signal system that manages or regulates the flow of resources through the value stream by notifying upstream processes, operations, and activities. Kanban is predicated on using visual indicators for stakeholders to indicate performance status. An andon is one such visual status signal system that indicates the status of a process and when a problem arises through its execution. This information is often coupled with a control chart that visually displays information showing patterns of behavior over a period of time. Another effective signaling tool is the dashboard that visually displays reports on progress, trends, and potential risks. In the end, the goal is to display information with self-explanatory content about status; this tool is often referred to by Lean practitioners as an information radiator. Visual signals are useful for addressing all forms of waste but are especially of value dealing with waiting, overproduction, inventory, excess processing, and defects.

Leveling, more specifically level setting, provides another effective way to improve performance. The idea is to have production occur at a steady pace rather than according to wide variations, referred to as mura in Japanese, that can lead to what is known as work in progress inventory and other wasteful practices. Leveling requires profiling a process, in addition to the product, to the customer to reduce surges in demand while at the same time satisfy its requirements. The goal is to reduce the spread of the peaks and valleys that accompany demand in traditional production environments. By communicating and coordinating with the customer, production can meet demand in a steady predictable manner according to takt time, which is having production pace aligned with customer demand. The Japanese term for leveling is heijunka, which seeks to reduce variation in production to attain a smooth process flow. A tool, called a heijunka box, is used to control production via kanban at fixed time intervals. With leveling, it becomes easier to adopt manufacturing approaches that seek timely delivery of products and services and the components that make them. One such approach is just-in-time (JIT) delivery, whereby the right amount of resources is delivered at the right time at the right place, thereby reducing work in process and allowing for continuous flow. Leveling helps to address several forms of waste to include inventory, waiting, and overproduction.

Defect prevention is delivering as much as possible an error-free product or service and, if one arises, then keeping it out of the hands of the customer. Poka-yoke is Japanese for a procedure or device applied to prevent an error or defect from moving forward in the value stream and ending up delivered to the customer. The way to do that, of course, is to build quality into the process, operation, or activity so that inspections downstream are reduced and that customer returns are as minimal as possible. The people working on a process, operation, or activity take ownership of the results of their work; that means being responsible for the quality of their output. Quality, in the end, is meeting the specifications of the customer. All the principles of the quality movement apply to Lean; some of these principles include reducing variation, not giving the customer more than what it requested, satisfying real needs, emphasizing prevention over inspection, and pursuing continuous improvement. One way to do that is to apply autonomation, that is, having a system, using an intelligent agent, which enables detecting a production problem; causes the process, operation, or activity to cease; and alerts the need for assistance to achieve resolution. An andon is another tool, discussed earlier, to indicate the status of a process and when a problem arises during its execution. Defect prevention helps to address several forms of waste, including inventory, defects, and extra processing.

Faster changeover is about speed. Also known as single minute exchange of dies (SMED), the idea is to expedite the transition from one set of activities to another. The goals are to reduce that time by a significant percent as well as decrease the number of steps. That way more can be processed through the value stream quickly and in larger quantities. Too many steps causes delays and confusion and are augmented each time a changeover occurs. Ideally, a one-touch setup is the end state, whereby any changeover requires a short time to occur. By improving changeovers, several forms of waste are reduced or eliminated, including waiting, inventory, and motion which translate into faster, more continuous value stream performance and reduced costs.

Improved maintenance at first seems to focus on maintaining the status quo. However, nothing could be further from the truth. Through what is known as total productive maintenance, or TPM, considerable energy is spent by the employees to ensure that equipment is kept in working order. Employees must take personal responsibility for monitoring and caring for their equipment; management provides the necessary support as well as provides relevant data and information about the equipment. Three variables are considered when applying TPM to equipment: availability, that is, the amount of uptime; performance, whether it is operating at an acceptable level of capacity; and quality, the degree of producing defect-free output. Other variables might include failure, or downtime rates, and mean time between failures. Not all equipment need be subject to TPM; however, it is best to apply TPM on critical processes, operations, and activities in the value stream, especially if a failure to perform can create choke points, or bottlenecks. Through improved maintenance, several forms of waste are reduced or affected, to include inventory, waiting, and safety.

Enhanced communications rarely, if ever, fails to improve performance. As mentioned earlier, visual signals play an instrumental role in enhancing communication throughout a value stream by applying techniques such as kanban and andon. A dashboard, or information radiator, is a visual display providing reports on progress, trends, and other concerns (e.g., potential risks) that can serve as an effective communication tool. A dashboard can be electronic or hardcopy, preferably the former because Lean stresses the importance of using automation. The content should be self-explanatory and provide only the essential elements of information. Another effective communication tool is what is called A3. An A3 is simply a summary document, no more than one page, which contains critical information about a process or project. It might describe a problem or issue, the actions to take or that have been taken, the status to date, and its goals and objectives. It may also include any other useful information. Still another effective tool, and one that often is not popular but sure can get people to communicate and coordinate fairly quickly, is the daily stand-up meeting. This meeting should take no more than 20 minutes and is simply a means to share information regarding their responsibilities. The purpose is to communicate, not solve problems. Other tools that have been discussed earlier that can enhance communication in a value stream include performing gemba which involves visitation at the location where work is actually being performed to enhance understanding and learn when to add value to the customer; modeling, such as building a prototype prior to full production to increase communication about requirements and expectations; applying the voice of the customer, collecting the explicit and implicit needs, wants, and desires and expectations, and translating that information into requirements and specifications; applying quality function deployment, assembling a multidisciplinary team to focus on customer needs and expectations; and doing validation, checking with the customer to ascertain whether a product or service satisfies customer requirements and expectations. Remember: enhanced communication reduces or eliminates all forms of waste, including safety and an unmotivated workforce.

Improved physical layout is a significant contributor to reducing waste. Typically, work areas are arranged by what is known as batch-and-queue, that is, the accumulation of parts, products, and so on in large lots that will subsequently be placed in queue for use in a process, operation, or activity in the future. Large inventories are created as a result of batch processing as well as creating a substantial work-in-process, adding to space for storage and overhead costs. Continuous flow is not often possible, at least on a regular basis, in a batch-and-queue arrangement. By reconfiguring machinery, equipment, seating, and the like in a counterclockwise configuration, continuous flow becomes more feasible. Creating such a work cell requires a multidisciplinary cross-functional arrangement of people, machines, and other resources to produce a product or deliver a service. It also requires worker training to operate different types of equipment via cross-training, a practice commonly referred to as multimachine working. To ensure continuous flow, visual control systems, such as a kanban, are used to move output from one workstation to the next. The idea is to keep the flow moving continuously at a consistent steady pace within each cell and throughout the overall process or operation rather than having it proceed sporadically with incessant starts and stops, resulting in work-in-process inventory. This requires, of course, considerable planning with the customer to incorporate lead times to meet demand on a pull, rather than push, basis. Improving the physical layout helps to reduce several forms of waste, including transportation, waiting, inventory, overproduction, and motion.

Better coordination is achievable by applying several tools and techniques. Coordination works hand in hand with communication. A failure in coordination is more often than not a failure in communication; a failure in communication is more often than not a failure in coordination. Perhaps the easiest way to ascertain if coordination is a problem in a value stream is to produce a spaghetti chart, a diagram displaying the route by which a product proceeds through a value stream, often revealing its circuitous travel from one operation to another. Or, a spaghetti chart might be developed for a milk run, which is using a transport medium, such as a van or truck, involving multiple pickups or dropoffs or both at several locations. Benchmarking might be used, a technique to compare a company’s performance in a process of a similar vein with companies considered “best-in-class” to identify opportunities to improve performance. These companies may employ a best practice that is superior to the methods or practices being employed currently and can be applied where relevant within the value stream. Still another technique is to apply tollgates, specifically identified meetings with stakeholders at certain stages within a process, operation, or activity or phases of a project to determine if requirements and expectations are being met and, if so, continue on or, if not, pursue a change in direction. Better coordination addresses just about all forms of waste but, more specifically, transportation, waiting, inventory, motion, and excess processing.

Greater standardized work is a critical technique to reduce waste. Unfortunately, standardization often generates fear among some people when, in fact, it should do just the opposite. People misconstrue it as a threat to creativity and independence and visions of robotic performance on the job cloud everybody’s minds. This is a common misconception. In fact, standardization actually liberates people in a value stream. Without standardization in a complex value stream, stakeholders are constantly spending non-value-added time trying to unravel and translate different ways of doing business for the same desired outcome. They find themselves constantly having to do rework to accommodate other stakeholders because the work performed upstream is not in sync with the requirements downstream. Standardization can improve the value stream at all levels, from processes to activities. The best tool to achieve greater standardization is to apply 5S. Five S consists of these elements: sort, straighten, scrub, systematize, and standardize. Sort is determining what to keep or discard; straighten, placing all important equipment, supplies, information, and so on in an assigned location that does not disrupt the workflow; scrub, cleaning nonlabor resources and inspecting them for problems; systematize, following a regular ongoing schedule for applying 5S; and standardize, instilling 5S into the workforce by applying it through all processes, operations, and activities. Standardization helps to reduce or eliminate all seven forms of waste.

Contingency preparation is still another way to reduce waste. Some events or scenarios can arise for just about any process, operation, or activity in the value stream. The key is to try to identify all the scenarios as much as possible and have a contingency plan in place to deal with each one. The basic notion is to prepare in advance so that the disruption to the value stream is minimal. One effective tool that has been around is the failure mode and effect analysis, or FMEA. This technique can be used to identify potential product and process risks or problems that can occur at discrete points in the value stream. These failure modes, as they are called, are really risks and potential problems that can be dealt with by taking preventive action or responding effectively they should arise. For each scenario, be it a risk or problem, the potential effects are determined and recorded. They assess the consequence, probability or likelihood, and ease of detection to determine a priority to the scenario. An appropriate response is made to eliminate or to reduce the impact of an applicable failure mode. An action plan is then developed to identify and implement appropriate responses for each failure mode. Naturally, not all risks or problems can be anticipated. Most of the time, however, techniques such as FMEA can help to capture and respond to the ones that have a good chance of occurring; that way the value stream can flow as continuously as possible. Contingency preparation can help reduce or eliminate waste for transportation, waiting, defects, inventory, and safety.

Safety enhancement is often overlooked as a way to reduce or eliminate waste. Yet, this failure to recognize its importance can lead to substantial waste in a value stream. Not only can overlooking safety lead to litigation because of noncompliance and loss of work days due to accidents, injuries, and medical restrictions, it also can have an impact in less tangible ways, specifically psychological. The fear of injury can inhibit people from performing at full capacity. As a result, people become overly cautious. It’s not just the people doing the work either; other stakeholders may decide to have people working with them be extra cautious simply to avoid responsibility if something does happen under their watch. Not only do people become more cautious but they may also be reluctant to report any safety concerns that could arise simply because of the ramifications associated with their occurrence. Whatever the reason, it makes good business sense to ensure safety is a top priority in a value stream. Otherwise, a safety incident can slow or even halt the continuous flow of a value stream which, in turn leads to waste. Five S is one of the tools to ensure greater safety because it reduces or eliminates waste that may contribute to accidents or injuries. FMEA also helps to identify potential safety concerns and to develop responses accordingly. Visual controls can help bring attention to just about any safety problems or issues that arise when an injury occurs. Safety enhancement can help reduce or eliminate these forms of waste: transportation, waiting, and motion.

Increased stakeholder motivation may seem inconsequential but it helps to resolve value stream impediments that are not always apparent until one of them surfaces and has serious effects. Motivation covers many areas for all kinds of stakeholders. Frederick Herzberg and Abraham Maslow, among many others, have come up with models that describe how people can become, or not become, motivated. Essentially all these models present two major categories of motivators, tangible (e.g., physical) and intangible (e.g., professional growth). The tangible category consists of variables such as money and offices. The intangible variables include recognition and professional achievement. Regardless, if the expectations of tangible and intangible variables are not met, motivation can suffer, even disappear. If such circumstances arise, then stakeholder performance can suffer and affect the value stream. Increasing motivation is difficult to achieve because it often reveals itself when motivation is lacking or in areas where a need for improvement, such as negative conflict, turnover, and safety incidents, exists. There are ways to increase or sustain levels of motivation. Some ways include rewards and recognition at the individual and team levels; encouraging participation and ownership when identifying and implementing improvements; eliminating fear of repercussions for suggesting or implementing changes; ensuring open communications vertically and laterally in the chain of command; and, somewhat related to the last point, building trust among all stakeholders to allow for sharing of thoughts, data, and information. A motivated workforce can eliminate all forms of waste because it is willing to tackle impediments to the continuous flow of the value stream and come up with meaningful ways to satisfy the customer.

4.7 Make Recommendations

Using the tools and techniques described above for collecting data and information, performing analysis, and applying tools and techniques for solutions, the time is ripe to formulate recommendations. Making recommendations can take various forms; however, one of the best approaches is to create a situation target proposal, or STP. Before developing the STP, however, two additional value streams require development, the future state value stream map and the ideal state value stream map. The future and ideal state value stream maps, once completed, help to complete the STP.

The STP format is an excellent way to present findings and recommendations to different levels of management to seek approval. This document should be no longer than 10 pages in length, and the higher the presentation goes up the managerial hierarchy, the more brevity matters. There are other advantages, too. It forces a person or a team to articulate the topic sufficiently. It provides a logical sequence to present information that can lead to action. It also provides management, from first levels to the highest levels of the organization, information that is more mentally digestible than if provided with a flood of information. Finally, it serves as an audit trail on why the Lean project exists in the first place.

The first section of the STP is the situation. This section provides mainly background information regarding the reason for a Lean project. This section presents the challenges that exist in the current environment, such as issues, risks, and problems; the symptoms or impacts of these challenges, such as costs, production, and customer service; and the causes of the challenges and symptoms, such as too many approvals, excessive inventories, or too many defects.

The second section of the STP is the target. This section describes the future or ideal states or both. Naturally, an organization will normally progress from one state to the other, albeit that may not necessarily be the case if the leadership seeks radical transformation of a process. This section, therefore, describes the target. This may include a description of the future state and then the ideal one. This section, at a high level, provides background information, discusses the benefits of the applicable state and, if necessary, the impacts on the value stream. It also provides information regarding what will be specifically affected, who will be affected, when the change is necessary, where in the value stream the change will occur, and why the change is needed.

The third section of the STP is the proposal. The second section provides “technical” and business descriptions of what is to change. It presents the game plan to achieve the target. This section also describes the options to achieve the target, the pros and cons of each one (usually displayed in a matrix) from project and business management perspectives, and a recommendation on what to pursue which, incidentally, may include doing nothing. Don’t be surprised that a recommendation is rejected or modified by the project sponsor or a steering team. Just be prepared to discuss with them the pros and cons of any revised recommendation. One last page in this section should include a sentence or two to prompt the reviewers to make a decision and what should occur next. A simple title might simply be “Next Steps?” Often, there is a long moment of silence before one or more of the reviewers feels impelled to speak. Remember, the primary purpose of an STP is to call for a decision that results in either moving forward or stopping now.

Here are some secrets of success for preparing and presenting an STP.

Secret number 1 is to keep it clean and simple. Avoid cluttering the pages with detail. Contrary to popular belief, too much detail presented to management does not mean the subject was well thought out. Often it means the opposite, reflecting a lack of clarity about the problem, the vision, and the path to take. The best approach is to limit the number of pages and have the details in what is often referred to as your “hip pocket.” If necessary, display the relevant information.

Secret number 2 is to populate the proposal with summary, or rollup, information. This degree of summarization will depend upon the level of management that must grant approval to proceed. A lower level of management will likely want more detail than a higher level. More often than not, give preference to graphics over narrative information. If presenting narrative information, then display the content in bullet lists, such as when giving a slide presentation.

Secret number 3 is to obtain as much feedback as possible from the audience, in draft form, before having the formal meeting. This secret will eliminate any “surprises” from arising during the formal review and allows capturing any questions or objections in advance, thereby allowing the presenter to be totally prepared. It also avoids political surprises to surface if someone of higher rank is in the review along with subordinate managers and executives.

Secret number 4 is to distribute the STP in advance of the approval review session. Two to three days in advance should provide sufficient time for reviewers to prepare themselves and raise any questions or concerns. It also provides the presenter with the opportunity to capture and address any concerns prior to the review session.

4.8 Plan and Execute

Assuming that the project sponsor, either an individual or a group acting as a steering committee grants approval to proceed, the next action is to prepare a project plan using the principles, practices, and concepts of PM discussed in the previous chapter.

The plan often requires additional review after the STP to ensure the plan is realistic and has the necessary support to proceed. This subsequent presentation should, at a summary level, explain the reason for the project. Its content should be taken from a draft of the charter, a schedule, such as key milestone dates, significant risks, roles and responsibilities, cost estimates, acceptance criteria, communications plan, and issues and approach for executing the plan. Remember, this information is presented in a summary format. In some cases, a charter may suffice; in other cases, the sponsor or steering committee may require additional information. Be sure to emphasize how change will be managed, as well as verifying that the Lean project focuses on meeting the technical and business requirements through verifications, for example, meeting specific standards to assure compliance with quality standards, and validation, for example, meeting the requirements of the customer.

4.9 Lean 101

This chapter is not meant to make the reader an expert on Lean. The intent is to give project managers a good understanding of the concepts, tools, and techniques concerning Lean. Project managers need to know the rudiments of Lean to understand what is occurring in regard to the subject. In the subsequent chapters, the focus is on applying PM on two basic life cycles to manage Lean projects: the PDCA and the DMAIC life cycles.