Do You Know Your Market & Customer?
Just a quick couple of visuals. The idea here is that we start with the end in mind that would be the customer value so in businesses large and small, what is the customer value where they want what they don't? What do they not want? All right, and and what are we getting paid for? This helps us determine that value stream that flow of activities to get that to the custom. But here's, what a lot of businesses look like they don't look like this, they look like this. So what we have is a siri's of isolated functions in many cases, some businesses called these silos because they looked like silos. So we've got, you know, a sales department. We've got a marketing department and advertising department of financial department of human resources department, and I s the it department. We've got engineering departments, we've got maintenance, department's and within maintenance, we've got welding departments and we've got this is called division of labor. Adam smith was writing about this in s...
eventeen seventy six it's been around for a long time it's a very common business paradigm is divide and specialized. The labor makes sense to some extent because this is where we get specialization this is where we get people are really good at what they do problem is, if we're not careful, waste creeps in between these silos and it slows everything down now the unaware business that's the searching for improvement will say well, we need to improve our efficiencies inside these silos we put bosses in charge we put measures and metrics in charge so we measure efficiencies in those isolated department's driving more and more efficiency in those icy isolated departments but you know where most of the way stis send between said between the departments where we don't have projects because we're thinking very vertically we're not thinking across the business now smaller businesses are better at this in many cases in large businesses because they're small because their solo preneurs entrepreneurs there were in ten different hats and they haven't got the money of the capitol or the space toe functional eyes everything until they get the money in the capital in the space and then they start dividing so we're really good at dividing things we're not so great at connecting and synthesizing and orchestrating things in business so this is really the challenge that we have and this is what we're going to bring the life of the lane sigma game here in just a few minutes w edwards damning is we're preferred sometimes too is the grandfather if you will the father of total quality management damian went to japan in the forties and was teaching in the fifties and sixties uh total quality management which is now well known as six sigma techniques world class business techniques and damn it out quote damning a few times in this in this workshop but in this in this particular case damien said put a good person in a bad system and the bad system wins no contest is interesting because a lot of people say well now good person would change the system well beware systems they're powerful and we're all part of systems whether we're solo preneurs we're working for you know corporate giants were all part of systems and so without systems thinking what had we have a tendency to do sometimes is solve one problem and in doing so we create three more in the pharmaceutical industry we call those side effects and you can read all about him on just about any drugs that you buy there's all these hoops you know be careful of this this and this so side effects come from when we're not thinking in terms of the whole system all right and systems thinking is like looking at the human body is the embodiment of many systems and going to a doctor in santa a headache doctor says well I tell you what uh here's a here's an aspirin I don't make it go away that's a classic example of non systems thinking if the doctor said to let me check you out here and get some data do a little analysis and dr comes back and says you know your problem is your hips you go huh I was my head I said hurt not my hips that begins with an age but it's it's head not hips so you might be thinking this doctor's a little bit crazy this doctor and I'd just be thinking in terms of systems because the doctor might be saying no if I drill down you have a headache because there's inflammation and there's inflammation because you're favoring one side and you're favoring one side because your hips are out of alignment so I'm getting to root cause and I'm solving problems the root cause level as opposed to the symptoms level which we're all familiar with and that's profound change and that's what we're going to be doing in this course is gettinto profound change transformational change? Well, you never have to take that aspirin again because we get to the truth causes so that brings up and the lien sigma game this is a game I designed many years ago and I've been teaching this in china and brazil and argentina and all over europe in the united states and it's fun and it's the idea it's taking confucius is you know, wisdom and saying, you know what? We have to play with us a little bit I use a metaphor of golf, you can study golf, you can watch videos on golf, read magazines about golf and, uh guess what you don't know golf until when you should try to actually hit the ball and they're like, well, like, you know, those guys in the video made this look easy and the you know, the people on tv and I know all the rules I know what club to use in what circumstance and I know all the theory, so I know golf at an intellectual level, but I don't know go I don't know go off until I actually practice it and even the best golfers in the world practice every day, so what we're going through in this course is a practice this is not about something, you know, a destination we reach and now we're they're done with that perfect business is a practice that's a practice and we've got to keep at it and this is this goes back to that fifth principle about continuously pursuing knowledge and pursuit of perfection it's a moving target so the game is going to bring this to life we're gonna have a little bit of fun with the purpose of it is to is to get into that experiential learning most powerful learning of all incidentally, when we learned with emotion attached to it, we tended way tend to hold on to those lessons much longer some of the most memorable lessons in our entire lives where it was wrapped in emotion of some kind pain, embarrassment, humiliation, suffering uh, joy, but it was a truly awakening moment because of the emotion, so we're going to try to create some emotion around this to really help the lesson stick in the online audience could follow along and put you in an analysis roll if you want to play around with that and just observe how this works, and then we're going to use this as a platform for discussion um, throughout, throughout all of the sessions really it's also going to give us a baseline for domestic domestic is that rational problem solving model that I'll spend more time? And in the course without knowledge of the make, we might just be solving problems in a very irrational kind of way, jumping to conclusions, basing decisions on assumptions that going checked, all right? And we're just on a treadmill because we haven't got a good, rational wave, something solving problems, so we're going to use this as a baseline for dominic, we're gonna measure some current state results, we wouldn't do this without taking measure, and then hopefully we're gonna have a little fun with it. All right? Everybody's got a role. So the overview there's going to be seven participants, plus a customer, and I get to play customer I got this came to and those those folks who are a tte home or or online. Can follow along as analysis people will look at the analysis from a couple different perspectives I'll go through that in a few minutes, but well, look at it from the customer's perspective of behavioral perspective, process, perspective, time, perspective, different perspectives, all right? And then, like I said, I'll play the customer, so that should be fun. Let me take you through now the actual operations team we've got our frontline row ready tto go here with us so we've got a requisitions department operator and susan's going to be the requisitions department operator, so you've got a little placard right in front will paper that's his requisition on it? You can put that up right there so we can see it so the requisitions department a person has got game forms in front of her she's got yellow and red dots, she's got a staple stapler staple remover and a uh a box of staples if she needs more staples and she's got her work constructions built right into the form. I'll come back and walk through that just a little bit more but susan's going toe represent requisition where she's in a functional silo, so to speak, a functional group where she's incented to just work as fast as she can and fill the pipe line up so she's isolated from everything else she's just going to be, uh banging away on these on these forms and delivering them to the diamond department kurt's going to play diamond operator he's got a placard in front of him along with a ruler and uh if you've got the form up in front of you online, you can actually see the instructions but kurt's going to be challenged to connect uh four dots twice to form two separate diamonds on this sheet and the uh uh the diamonds then they have to be I'm looking for six sigma diamonds I'm looking for for great diamonds they're all repeatable in the same and the accurate precise he's going to hand off teo the red circle department alright, so cats the red circle department and she is going to be putting red circles inside those diamonds so that, uh they don't touch the lines in any way they don't touch the diamonds in any way they're just centered in there all right? Because if they do touch, they're going to get rejected by kate. So kate is a review department so she's checking the work at this point it's an in process review a very common practice so she'll be checking ah for accuracy of the diamonds good of the dots not touching the diamonds it's good, so I mean it's good kate you're gonna pass it onto the yellow circle department and yellow circle department is jane there? So jane is going to put this in the yellow circles inside the three rings on the game form, and each of these activities is simply metaphorically representing work activity. So we all have work activity to do every day when we're going to work. And so we just you know, it's, this is just a simulate different tasks, different activities so james going to put the yellow circles in the in the rings. Now they can touch the rings, but they can't break the ring, so I'll need to see a black ring all the way around the circles. They fit tight fit, but they fit so jane's going to be doing that and she's goingto deliver deliver those to our approval department kimberly's going to look at the the whole sheet, she's going to make sure it's all good and then she's going to sign off if it is good and deliver it back to requisition. If it's not good, either at approval or review it's going to go back to the department, where there is an error to be reworks or it can be scrapped, it could be just taken out of commission at the end of the game that's one of the measures were going to take is that we re work or scrap any sheets. And if so, how many? So I want to I want to get a count on that that's our that's, our cost of poor quality when it gets back to susan and requisition she's going to remove this staple and when she has eight good ones she's going to deliver those to me and I get to play uh customer like I said right now to keep eyes on this whole process we've gotta have somebody managing it to so to speak, to keep to keep everything in somewhat of control all right? Gian maria is going to be our our manager so the manager cannot change the system in any way cannot change the policy in other words, the manager's gotta work within the same system and structures everyone else because to make changes would require more approvals and committees and you know, bankers and whoever, whatever else so we're we're not allowing any changes in this round, we'll just this is current state, we're running it as is and we're just going to see what happens. All right? So that's an overview I want to go back to something called five s I referenced this earlier just a couple of minutes on five s we have an example of five s in our requisition department, so five acts like I said is it's five words japanese words actually that beginning s that translate into workplace organization all right. And that workplace organization is self explaining its its self cleaning itself regulating itself. Improvement, it's. Just if something's out of place, you can see it. You see this? A lot of the airports when you go to the airport and you see this is where the luggage truck goes. There's lines painted on the on the on the pavement. This is where the fuel truck goes. This is where the airplane pulls in. If it's this size or this size, it pulls in and stops everything is very orchestrated. Think of an operating room and a tte the hospital. This is where you want the surgeon looking for a scalpel when you know somebody's under the under and being operated on. So everything is organized. So we've got example that requisition you. Lookit requisition. Susan's got a nice little five s project going on over here where she's got the state. Well, stapler, the staple remover, the staples right in a very visual workplace. She's got the dots red and yellow organized a specific spot. She's got the forms off organized she's. Not going to have to look for anything. And this project, this five s project was designed back, uh, pre today, so to speak. By a group of people looking to make process improvement in a functional area in this case in the requisition department, so we want to get our efficiency up in this department where you don't want to waste any time looking for things. We want to have everything organized it's, the foundation for world class performance when used in the right place at the right time because if you walk into an organization that's completely disorganized, completely a mess and you try to tell someone like me that you're operating a world class lean six sigma organization, you've just lost all credibility. I won't believe you for a second, so if it's not visually in control it's not clean and organized, you've got no credibility when it comes to lean six sigma and world class performance. All right, so we've got a little five that's going on there. Here are the five s is, in fact, if you want to have a quick look at him, so theory essentially translate very loosely into sort and when we think about our business again larger, small, you could be running a one person tool shop, you know? Yeah, oil change company or what you think about a pit crew at the racecar track photography studio? Ah, gardening business end anything if you've got your business well organized, you're going to get better flow so does everything have a place to go? You'll see color coding, so the first ass is to sort out what you don't need and get up to get it out of the way, because clutter is going to just mess everything up. Second seat on is simple fire setting order that's where you see things like visual boards and places to actually put things so we have we have a place for everything and everything has a place so I don't have to spend any time searching for things. Do you think about this? Maybe in your kitchen you have a place for their forks and your spoons in your knives. Little trays. Things like that that's actually a form of five. The third ss that you saw is about keeping everything clean and ready for you. So think of that. Clean scalpel in the operating room and everything's just it's. Clean and ready. T use incidentally, you confined that's your laptop. You could five ask your computer your filing system because clutter is going is good. It's amazing how much time people waste looking for things, searching for things back. In many cases, you can't find it. So what do you do you buy more, we order more and you get more cluttered. So this is the whole idea of saying you know what if I have everything I need and just it's just where I need it and as it starts to get low if I start to use con bon pull system so I reach a trigger point I replenish I always have a very lean very uh uh balanced amount uh who is to standardize everything is very standardized we have standard work standard recipe standard routine standard time standard sequences everything is very standardized so anyone could essentially with a little training go into that work area and quickly understand how to do the work unless it's brain surgery it's it's it's very very clear jane yes I've got to say I don't know if anybody else is thinking this but in the audience but thiss I can understand I can start to have a visual image of it but the other was just glazing over so the standardization and all those words I have a hard time follow that okay so when I when you're explaining the rules is like oh my gosh well we just keep it over mine and see how it is playing it oh yeah this is where I you know I fall apart so well I'm gonna are you talking specifically about your yellow circle role just about ever was before this I was just like, you know, I was losing track of what the directions were okay, what I do is art and not to make excuses for not being able understand systems, okay, but why is that making sense? What I'm getting at is I think I could kind of have an image of it, but the other, when you're just the standardization systems, I'm like, oh, my gosh, well, so we're going to come back and we're going toe. This is just the baseline, the platform for all of the learning as far as your art talent's going to come in very handy because you're going to need to put yellow dots inside three rings okay, color and that's it that's your job, but I put three dots on a sheet. In fact, you can hand a sheet down there just so jane could see it. A susan at the bottom of that sheet, three rings. All right, you're the yellow circle department. Okay, so let's go over that instruction. And if anyone else says it was more more of the whole idea, I think january's already. Good point. I mean, does anybody else know understand their roles? It's? Because this is something I think we need to. Be absolutely clear because this's about process and understanding the process so let's make sure before we get going that everybody doesn't understand you're the manager yeah, I think that's really great idea does everybody know what they're doing? Well, that's exactly that's perfect question I wanted to circle back to that to make sure everyone does but let's not assume that in the real world everyone understands their role they don't so what we are simulating here is current state reality and make no mistake the world's full of confusion people don't know their roles in many cases or they think they know it but again it's an isolation of something bigger so confusions one of those things we're going to get after, okay, but I do want to make sure for round one you have a basic idea of what am I supposed to do? Incidentally, the instructions are on the form for each job the right in front of you but the fact that there's a little bit of ah maybe anxiety, a little nervousness, a little tension I've never done this before that's perfectly ok, all right, so yeah and uh I'm going to come back through I want to take it to a few more things about the game before we actually run it and then we'll run it and we'll learn from it with a little emotion that's the idea right and finally you know the fifth s should suki is all about sustaining it and in the self discipline that rule that rolls into it so that it's not like cleaning our attic and then cleaning our garage and you know three weeks later it's a mess again wait cleaned our kitchen we cleaned our our garage whatever and that's it's a mess against what's that whole every day is a five s today all right so those are the basic five assets and I wanted to just introduce that practice because it is considered a world class technique and businesses all over the world to make sure that when I go into my art studio when I go into my photography studio okay or my lab or my or my office environment or my tool and die shop my maintenance department where if I want wherever I go um can I visually stand there and see where everything belongs and where it should be and is anything out of place if the answer is no I can't it's a mess okay it be a very useful step to get organized because world class performance and business excellence requires discipline and rigor and uh and and everything has a place and everything should be in its place kind of thing all right it doesn't matter what your personality type is intuitive perceptive thinking feeling whatever know any a gram you are it does it's uh it's it's very doable residents with you though, jane, we have folks in the chat room and they're saying they get where you're coming from and also you know that it's a good point jane ready fire, aim and elsie sure, those comments because you're so we do have people who are right brain and left right brained out there and I think we just probably have to get in and see what's gonna happen, right? Absolutely we want to remind people that there hole brained people that's the divisive mind saying no, I'm left brained as if I'm not right print try again, john bright brand blake you're not left brained try again that's like saying I'm right handed and I I don't I don't I don't use my left hand is that true you ever use both hands? You got your about to, uh all right, so that's a paradigm oh, I'm as an excuse to not be more complete and I will challenge everybody on that because we have a tendency to put our own selves in a box and then we wonder why we're not more successful get out of the box. All right, you have a watch, it just yeah, I was going to ask you because you rolled this out of toyotomi major corporation how did they react to it at first because then you're dealing with hundreds of department hundreds of people I learned I learned a lot of this from toyota I'm sorry and so but but the process is you know what we're we're balanced we're whole were complete so we have to find the right synergies between the right and the left if you will the yin and the yang okay this it's all about balance and harmony orchestration so I know that if I'm or write brains than left brained and I'm a more creative intuitive you know uh artistic human I might wantto surround myself with somebody who's going to be keep me grounded and facts and data and rationale because without that balance imbalance is what takes business is out or the or the opposite is true I'm a fact finder I'ma details kind of person I'm more more of a left brain analytical type of person well if I haven't got some some people around me who are visionary and intuitive and creative and challenging uh the box that I'm in uh I could work very hard and still be unsuccessful so we want to challenge it but l a and I'll use this example if you ever watch a baseball player a softball player you'll notice that they use both hands they use one to throw and one to catch and here's another interesting question do they usually throw their dominant hand and they catch with their what we call auxiliary if you want to call it that right have you ever tried? Maybe if somebody had tried this you ever tried putting a baseball glove on your opposite hand on your dominant hand? You've probably tried throwing with your less dominant hand auxiliary and that feels weird, but if you ever put a baseball glove on your dominant hand, a lot of people say, you know what? That feels really weird this trip is your dominant hand. Well, I know it still feels weird I'm better at catching with my other hand. What that tells us is that with practice we can develop amore ah, holistic approach to life and a respect for it. And so I always challenged people be careful of that that limitations you might just put yourself out. Okay, so gamba is about where the action is it's about this is it's a great management technique it's about managing by walking around or wandering around it's getting off of here, hind and getting away from your desk and going to actually see where the action is. So we're goingto do that we're going to actually with these analysis teams, we're going to go to where the work is done, go to the requisition department, go to yellow circle, go to diamond and we're actually going toe witness what's really going on how easy is it for our associates are employees, our stakeholders to do their jobs, what what works? What doesn't work we're gonna be looking at we're gonna be looking for wasting variation in this value stream okay? And we're gonna come back and spend uh uh several sessions using this as a reference for the business world that we live in today or the system that we're in today the supply chain that we're in today larger small so gamba is a great ah great way to really get grounded in reality and what's going on so one of our analysis team's the customer analysis team is teo is to basically be looking at me during the simulation and we'll run the simulation for about ten minutes and during that ten minutes what do I want what I expect what I experience is it clear among our operations team what I really want and if the answer's no not necessarily that's reality today we think we know what the customer wants we think we know what the customer values but a lot of times we don't get it right so there's a disconnect and any time there's a disconnect in the business world we put ourselves at risk it's about when win relationships not disconnects. So what kind of interaction do I have with this supplier all right or this supply chain all right and uh take notes when we'll collect feedback afterwards, all right? I've got the behavior analysis team, so to speak so I this would be it would be the same person look att customer and behaviour in a separate team but the behavior analysis team is saying what behaviors of my scene I seen people getting stressed and I seen people overworked and I seen people underworked my scene balance in the system I am I seeing confusion people aren't quite sure what to dio this is uh this is freaking him out what am I seeing because this is all real world stuff this is a simulation but it's based on real world stuff all right what am I seen so I didn't identify examples of variation in waste and we'll take a we'll take some feedback after we run the simulation process mapping would be something we're going to spend more time on in another session but this is uh basically can we characterize the way we do things around here visually we process map it and I walked to a variety of different process mapping techniques in other segments but the idea here is if I was going to map out this process and I and I asked people are watching online they go how many steps there in this process you wantto map this out how many steps do we have in this process uh and I'll reveal the answer's afterwards but think about just how many steps do we have in this process all right and then finally we look att time time is value we all value time we all the same amount of time in the day. Uh, how we use it varies dramatically. How often do you have people here? People say, I just don't have time. Um e I mean, uh, I don't time to do some things I really want to do. I don't time for my family or my exercise or reading books or socializing or whatever. I'm just time always seems to escape me. Um is the same amount of time and every day there's nothing more constant in time. So it's, how we use time that separates the real wise and the real efficient, real productive from everyone else. How do we use the time we have and where we waste time? So this this team would be looking at time from a couple of different perspectives, we could say, well, one let's, look at it from the the shades put perspective. Why? Because it's, that sheet we're getting paid for most organizations don't look at things this way, they look att, you know, people and assets are the people busy all the time, if you're not busy, get busy. Are the assets the machines the equipment are they busy if they're not busy we'll get him busy make him run we've got look we've got to see better efficiency numbers so so we're looking at assets but we're not necessarily looking at the most important thing of all when it comes to time and in this case it's what are we getting paid for how long does it take for that sheet willing to measure this how long's it take for that sheet to move from susan all the way through this system to me that's the value stream how long does it take for me to get my photo uh collection developed into me how long does it take me to get my uh my instruction how long's it take me to get my widget whatever it is we're whatever business we're in how long does that take because customers value time and they don't like wasted time we're like a look at these metrics so one metric is time to first order so for our metrics and I will track these at the end of the at the end of this round one is time to first how long does it take me to get that first order uh and has to be a good one has to be approved alright I'm also going to look at the total number did I get how many do I get in the ten minutes that we run look at work in process w y p the total number in process at the end of the game notice we're starting the game with nothing in process we've got some raw material but there's nothing in process what are we going to end with? We don't know we'll find out any rework or scrap so at the end of the game I'm going to ask kate did you rework or scrap anything? Send it back to rework uh kimberly same question and I'll get numbers here and this is for round one all right? And then productivity productivity is going to be calculated by how many accepted units that I get in the period of time divided by the labor minutes in this case labor minutes input so if we went ten minutes we've got seven people in the game on the payroll at seventy labor minutes how many units did I get divided by seventy labor minutes just tells me how productive we were it's one measure productivity so that's that's our metrics but we're also going to take a look then at some financials just to make it a little more real world so our financials are here we get ten dollars for revenue top line ten dollars per unit so if I get seventy units uh get seven hundred dollars and get seven units I get seventy dollars that's our top line but then we have to pay for overhead we have to pay for labor, which is one dollar per labor minute. That will be seventy dollars if we go seven minutes, ten minutes, we have to pay for our rework and scrap. That's not free. That cost comes out, and then any incomplete orders or whip anything that's in the process we have to pay for and that's going to give us annette, what sort of speak or a bottom line? So just some real simple maths and real simple numbers just to see what this if this were a business, a small business or part of ah, small business, uh, or part of a large business, what do the numbers look like? The end of the day? All right. And before we kick it off, just a few rules, and then we'll see if there's any other questions, and then we're actually gonna we're gonna go live and run it. So the game is time that I'll keep the time. We're going to start and stop at the designated time. It's possible. We could run a little overtime. We could run over, uh, ten minutes. All right, we'll see. I'll let you know, uh, you can only do your own work, you cannot go and help anybody else out because you're not trained to go and help anyone else, you're trained as specialists, so you're not able to help anyone else out. Analysts cannot help out the operators either. So each of the operators is doing their own thing. Keep safety in mind if you have to get up to to deliver ah, sheet of paper, a batch? Um, you know, watch chords and things like that. Just be careful. And, uh, finally, you cannot make any changes to this system. It's, like deming said, put a good person and a bad system bad system wins, no contest. I know you're a good person and I'll take ownership for the system and round one and round two, but after that, we're going make it better and better and better. But the the idea here is to just look, this is just this is my this is my operating system right now. Like it or not, I'm going to do the best I can in this system to see what I see, what it looks like. All right? And when we come back, we're going to take a look at just what happened and how would we summarize it? And what changes might we make so we'll do we'll do this after we actually run the simulation, okay?