Do You Know Your Market & Customer?
So 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 if they don't what do they not want all right 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 our I t 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 seventeen 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 that 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 searching for improvement will say well we need to improve our efficiencies inside these silos we put bosses in charge we put measures in metrics in charge so we measure efficiencies in those isolated department's driving more and more efficiency in those isil isolated departments but do you know where most of the way stis it's in between it's in 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 or the capital 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 deming is we're preferred sometimes too is thie grandfather if you will the father of total quality management damian went to japan and the in the forties and was teaching in the fifties and sixties total quality management which is now well known as six sigma techniques world class business techniques and I mean 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. This is interesting because a lot of people said, 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 that we're working for, you know, corporate giants were all part of systems. And so without systems thinking, what have we have a tendency to do sometimes is solve one problem, and in doing so, we create three more and 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 with this, this in 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 embodiment of many systems and going to a doctor in san I have a headache. The doctor says, well, I tell you what, 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 well, let me check you out here and get some data to a little analysis and dr comes back and says, you know your problem is your hips and you go huh? I was my head I said hurts not my hips it begins with an age but it's its 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 line so I'm getting to root cause and I'm solving problem at 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 getting in tow a profound change transformational change where you never have to take that aspirin again because we get to the true root 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 we know what we have to play with us a little bit I use the metaphor of golf you know 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 golf I don't 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 toe 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 learn 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 or where it was wrapped in emotion of some kind pain embarrassment, humiliation suffering 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 and 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 throughout throughout all of the sessions really it's also going to give us a baseline for domestic domenic is that rational problem solving model that I'll spend more time and in the course without knowledge of domestic we might just be solving problems in a very irrational kind of way jumping to conclusions basing decisions on assumptions that go unchecked all right and we're just on a treadmill because we haven't got a good rational way of solving problems so we're going to use this as a baseline for dominic we're going to measure some current state results we wouldn't do it this without taking measure and then hopefully we're gonna have a little bit of 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 to play this game too and those those folks who are a tte home or or online you can follow along as analysis people well 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 this so we've gotta requisitions department operator and susan's going to be the requisitions department operator so you've got a little placard right infront little paper that's his requisition on it you can put that up right there so we can see it so the requisitions department person has got game forms in front of her she's got yellow and red dots she's got a staple it's a 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 gonna 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 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 four dots twice to form two separate diamonds on the sheet. And the uh uh the diamonds then they have to be I'm looking for six sigma diamonds I'm looking for great diamonds they're all repeatable in the same and the accurate precise he's gonna 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 there 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 our 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 going to pass it on to 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 to 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 there's no way I'll need to see a black ring all the way around the circles they fit tight fit but they said so jane's going to be doing that then she's gonna deliver deliver those to our approval department kimberly's gonna look at thea 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's 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 did we rework 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 may and I get to play a 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 what 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 tow cut 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 uh it's it's five words japanese words actually that beginning s that translate into workplace organization all right and that workplace organization is self explaining it's it's 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 not the surgeon looking for a scalpel when you know somebody's under the under and, uh 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 stapler stapler the staple remover the staples all right in a very visual workplace she's got the dots red and yellow organized in a in 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 of 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 we 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 little five s going on there here are the five s is in fact if you want to have a quick look at him so see eerie 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 we're uh oil change company or think about a pit crew at the racecar track a 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 get it out of the way because clutter is going to just mess everything up second seat on is uh simple fire set in order that's where you see things like visual boards places to actually put things so we have we have a place for everything and everything has a place I don't have to spend any time searching for things why 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 s the third s s say so 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 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 the 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 bond pull system so I reach a trigger point I replenish I always have a very lean very balanced amount sir katsu is to standardize too everything is very standardized we have standard work standard recipes, 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 this 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 following that. Okay, so when I when you're explaining the rules is like oh my gosh, well, let me just keep it over mine and see how it is playing it. Oh yes, this is where I you know I fall apart so well I'm gonna are you talking specifically about your yellow circle role just orb out 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 ok but does that making sense what I'm getting at is I thiss I could kind of have an image of it but the other when you're just the standards ations and systems I'm like oh my gosh well so we're gonna 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 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 jen you raised a really good point I mean, does anybody else know understand their roles because this is something I think we need to be absolutely clear because this is about process and understanding the process so let's make sure before we get going everybody deals on this time and you're the manager you know I think that's really great idea does everybody know what they're doing well that's exactly it'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 dio 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 might never done this before that's perfectly ok all right so yeah and uh I'm going to come back through I wantto take it through 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 sa shi su ki 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 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 again so it'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 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 and and everything has a place and everything should be in its place kind of thing hard and it doesn't matter what your personality type is intuitive, perceptive thinking, feeling whatever you know any a gram you are it does it's ah it's it's very doable resonance 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 shared those comments with you 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 are there that's the divisive mind saying no I'm left brained as if I'm not right print try again john bright brand you're not left brained try again that's like saying I'm right handed I don't I don't I don't use my left hand that true never use both hands you got your about to 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 ever watch it just yeah I was going to ask you because you rolled this out a toyota of a major corporation how did they react to it at first because then you're dealing with hundreds of departments and hundreds of people I learned I learned a lot of this from toyota I'm sorry and 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 right brain than left brained and I'm a more creative intuitive you know 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 imbalances what takes business is out or the or the opposite is true I'm a a fact finder I'ma details kind of person I'm more more of a left brain analytical type of person um well if I haven't got some some people around me who are visionary and intuitive and creative and challenging 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 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 a more holistic approach to life and a respect for it and so I always challenged people be careful of that that limitation that 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 end 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 gonna witness what's really going on how easy is it for our associates are employees our stakeholders to do their job 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 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 do 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 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 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 enough it could 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 under worked um I seen balance in the system I am I seeing confusion people aren't quite sure what to dio this is 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 basically can we characterize the way we do things around here? Visually, we process map 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're going to map this out? How many steps do we have in this process? Andi, I revealed 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 how we use it varies dramatically now how often do you have people here people say I just don't have time I mean 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 it's the same amount of time and every day there's nothing were 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 sheets put perspective why? Because it's that sheet we're getting paid for most organizations don't look at things this way they look at 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 00:30:24.755 --> 00:30:26. most important thing of all when it comes to time 00:30:27.27 --> 00:30:29. and in this case it's, what are we getting paid for? 00:30:29.67 --> 00:30:32. How long does it take for that sheet willing to measure 00:30:32.81 --> 00:30:34. this? How long's it take for that sheet to move from 00:30:34.79 --> 00:30:35. susan 00:30:36.72 --> 00:30:39. all the way through this system to me, that's, the 00:30:39.03 --> 00:30:41. value stream. How long does it take for me to get 00:30:41.92 --> 00:30:42. my photo 00:30:43.92 --> 00:30:46. collection developed into me? How long does it take 00:30:46.91 --> 00:30:50. me to get my my instruction, how long's it take me 00:30:50.55 --> 00:30:53. to get my widget, whatever it is, we're whatever business 00:30:53.82 --> 00:30:56. we're in. How long does that take? Because customers 00:30:56.55 --> 00:30:59. value time, and they don't like wasted time. 00:31:02.47 --> 00:31:06. We're like, look at these metrics. So one metric it 00:31:06.64 --> 00:31:07. is time to first order, 00:31:08.87 --> 00:31:09. so for our metrics, 00:31:11.02 --> 00:31:12. and I will track these at the end of the 00:31:14.8 --> 00:31:15. at the end of this round. 00:31:17.37 --> 00:31:19. One is time to first. How long does it take me to 00:31:19.64 --> 00:31:23. get that first order? Uh, and it has to be a good 00:31:23.02 --> 00:31:25. one, has to be approved. All right, I'm also going 00:31:25.74 --> 00:31:26. to look at the total number. 00:31:29.46 --> 00:31:33. That I get. How many do I get in the ten minutes that 00:31:33.06 --> 00:31:33. we run? 00:31:35.73 --> 00:31:39. Look at work in process, w y p the total number in 00:31:39.86 --> 00:31:42. process at the end of the game. Notice. We're starting 00:31:42.21 --> 00:31:45. the game with nothing in process. We've got some raw 00:31:45.18 --> 00:31:49. material, but there's, nothing in process. What are 00:31:49.3 --> 00:31:50. we going to end with? 00:31:52.17 --> 00:31:52. We don't know, 00:31:54.03 --> 00:31:59. we'll find out any rework or scrap, so at the end 00:31:59.14 --> 00:31:59. of the game, 00:32:01.13 --> 00:32:04. I'm going to ask kate, did you rework or scrap anything? 00:32:05.13 --> 00:32:09. Send it back for rework kimberly, same question, and 00:32:09.13 --> 00:32:11. I'll get numbers here, and this is for round one. 00:32:14.67 --> 00:32:17. All right. And then, productivity productivity. 00:32:20.33 --> 00:32:24. It's going to be calculated by how many accepted units 00:32:24.06 --> 00:32:27. 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 I get seven hundred dollars if I 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 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 a small business more 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 was actually going toe we're going to 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 ten minutes. All right, we'll see I'll let you know 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 the 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 all good person, and I'll take ownership for the system and round one and round two. But after that we're gonna 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.