Flow Kaizen & The Kanban Process
So this is really about shifting that paradigm so one of the tools we'd pull out and we've we've covered this tool so we can go back and just to review very quickly is that value stream app let's look at the whole value stream the current state what the customer needs how the products flows across that the form flows across all right how we how we organize things and then let's start let's start toe tto learn from it are cycle time ceo has changed over times how long's it take tiff we're changing over from one product to another what are our yields things like that we can ask for whatever data we want populate this with a little data boxes look at that time value map across the bottom we could go back and say all right is do we want to do a point kaizen like we did earlier and that diamond department or do we want do something much bolder and broader do a flow kaiser sew in this session we're going to do a flow kaiser and then we're gonna blow up the old system and come up with somethi...
ng radically different and innovative so one way to do that is to say instead of using the process observation chart again a favorite tool of mind to go into the diamond department say alright, well kurt, how are you doing your job? Step one, two, three, four, five and uncovering all those adjustments we could actually start this now, right over at the beginning of the value stream and take it all the way through the values train. Now, it's going, it's. Going to be pages long of data that we could turn into some meaningful information with peredo charts. And but you know what the single most common activity is? If we took all of the steps in this came and we parade owed them, we organized them like a parade. Oh, charter, a pie chart. You know what the biggest slice of the pie would be of all the steps? In round one it would be adjusting the ruler, followed by flipping pages. In round two we have fewer adjustments, but we're still flipping five, six, seven pages every batch, so we're flipping all these pages is is flipping the page value added force not right. We've already covered that so it's a non value at activity, but now imagine this so so step one we go all the way through requisition, by the way, nothing and no offense, susan, but nothing in requisition is value added, so signing your name is not required by the customer. Checking that box is not required by the customer stapling it is certainly not required by the customer. Then it goes through. The pipeline, comes back to removing the staples, not value added okay, and delivering them in eights okay is not value at it. Delivering doesn't change it. This is what's led to so much cho location and things like that it's considered a non value added activity. Yes, waiting to hear when we're going to be laid off. You might be redeployed all right now you now as we free up capacity and free of pre sources we can get out there and we can sell more business because we're gonna be a lot more competitive but that's a great point that's a great point is the brutal honesty the brutal truth is if a lot of organizations are trying to survive carrying around a whole lot of extra weight and we're just we're literally just obese and we're not agile and we're just not able to adapt quickly and the clients are mad at us we got to get in shape and business we've got to get in shape that maybe we have to lose a few pounds that might mean we have to take on some new habits, some healthier habits so to speak so it's very true and business if we're carrying around a lot of dead weight and we're trying to compete in today's world we could be putting the entire population of our employees that we risk we got we got to be honest about that all right and for his solo preneurs and on and on and start ups and things like that be very careful about who and when and how you hire because if there's a clever way to do the work without necessarily hiring it, maybe you can subcontracted maybe you know there's just all kinds of options maybe you can do it yourself or maybe you can automate it things like that, let's, not just throw capital at it when we could be more creative. So creativity before capital. All right, so we go through this whole thing. We find out we got a whole lot of value. Add, uh, non non value at steps called flipping pages where and we get to five wise, and we say, why we flipping pages, there's, a staple in it. Wester. Staple in it policy. Where that policy come from why we have that policy because it's more efficient batch is more efficient prove it we get into the auto show me because that that's a powerful paradigm matching is one of the most powerful paradigms way see we can use this tool to do that now attack time tact is this german word that comes from the music business if you will and it means meter rhythm drumbeat it's the it's the pace that we work it it's also often it's often uh used to refer to the baton that the sympathy symphony conductor holds to keep keep the the orchestra harmonized unbalanced and plain as one so attack time is used to get us all plain as one we weren't playing has won and round one or two fact we didn't even know attack time wass many cases so I go into organizations latin like what's tack time if you don't know attack time is there's a good chance you're not harmonized unbalanced because it's a very fundamental tool in the lane tool kit teo to organize the balance the work so it's a relatively simple calculation and you can apply it in different ways but in this case you'd say well how much time do we have available what let's start with the end in mind the customer says you got ten minutes that's it well what we need fourteen and a half you can't have it I need it in ten so it's a it's a it's a it's a disciplined you got ten minutes I mean I mean I I need my photographs uh in an hour okay, I need uh I need my household in a certain period of time I were not necessarily necessarily thinking that way we were thinking and well okay if I add up all the steps it's going to take you know, three months well, I'm giving you a month what so starting with the end in mind put put some real pressure on right? So we got we got ten minutes that's the available work time on the top so let's put that in two seconds because it's a little easier in this case to calculate the tack time so if we've got ten minutes that six hundred seconds all right? And how many units do I want in six hundred seconds? I want thirty let's do some math six hundred divided by thirty, twenty seconds so tack time in this illustrations twenty seconds that's the drumbeat we gotta swim at that's the pace we have to move that to meet customer demands period if we can't work a twenty second pace we can't meet customer demand so this is a wickes of expressing the voice of the customer in an operational way so well twenty seconds I gotta draw two time ends in twenty seconds what if I can but then we probably need to get you some help. Now we have a true constraint. If we can't meet tak time, we have a true constraint. Oh, what if I only need ten seconds? Well, now you're gonna be sitting idle, or we can give you something else to dio. But this is where we're going to start down to balance the work attack. Time is, the is the way we balance the work. So it looks, looks the calculation looks like this, all right, and this is the actual calculation for our game. So we've got, if change ours two minutes per day, if you will, and we've got, you know, instead of twenty minute tacked on, we have a twenty second tak time, so the same mathematics. Now with tact time we start to look at the cycle times it takes to do whatever we're doing well over here I don't need twenty seconds I could do it in uh eight this is capacity hidden remember we talked earlier about well I don't think we have the capacity to meet those kinds of numbers we need more capacity I hear this all the time I need more I need more I need more maybe not maybe not cause more is expensive and if you haven't got a whole lot them the money and your budget is a start up company or a solo preneurs whatever you've got to think creativity before capital the name of the game what if I have a situation like this where my cycle time it takes longer than tact that's a true constraint here's something interesting we could probably meet tak time in the diamond department with the ruler I've seen it over and over again where we can actually meet tact I'm with the ruler we never needed the template now the template has other value which is like a polka yolk in the details okay but we uh we actually had the capacity we just weren't using it and the other reason we weren't using we weren't able to meet tak time in any case was because of the batch ing so if you were to say what was the one most significant root cause in round one and two it never was the diamond department that's the headache actually the headaches the customer the inflammation is coming from the diamond department but where's the where's the diamond where is the information coming from it's coming from the batch ing so it's systems thinking so often we're trying to solve the wrong problem the wrong level because we haven't really done on the analysis carefully it's the hips causing the inflammation given the customer headache and we're all for trying to fix the the inflammation who knows what we're doing to do that but uh buying a bunch of expensive stuff anyway so this is how key tactics so we've got to find a way then teo balance and smooth are our load now pull pull essentially and there's probably no better example in the world today of pull the than amazon amazons really made it quite quite famous so when am I when you buy something at amazon and they ship it tio they pull another one and they do it it's all timed it's all sequence so as they ship you a book wal mart does this brilliantly and target some of these other when you go and you buy something at wal mart you get that scanned all right it's pulling a new one right right back in behind it it's also getting them paid and it's triggering the whole payment system upstream so you buy something at walmart today you'll get your giving them your money before they've even paid for what you just bought because the inventory is turning so fast that's pretty pretty tough to compete with same is true of amazon okay you're buying something from them pulling it through and it's it's it's it's pulling through so fast they haven't even paid for yet so that's like doing business with zero inventory cost other than your cost a warehousing which is certainly in a big company it's costly but that's that's that's incredible cashflow try to compete with that because a lot of organizations have mountains of inventory that they've had to go out buy and pay for only they're going they're not gonna get that money back until they actually sell it if they sell it this is a whole different shift so we've got to figure out howto pull it through our our system and we're going to demonstrate that in our arlene's sigma game instantaneous demand says the customer's not going to have to wait at all or a very short period time so you know I don't I don't have to wait long now dell computer was a great illustration of this you know I wantto adele computer I ordered online they make it and ship it within three days that's pretty pretty profound the same model is is is amazon you want a book we're gonna ship it you'll have in a couple of days by the way that's too long we're going toe how about if we just beam it to you, which is where we are more and more today. Okay, we'll just beam it to you. This is, ah, this is important, because we don't have to predict the future. Wow, how do we do that? Because so often we're trying to figure out what to do based on forecasts and predictions. One thing we know about the forecast is never accurate. Nobody knows exactly what's going to happen next but if we're producing to a forecast that we know is not accurate we're producing potentially a lot of waste and we're making more of stuff we don't need necessarily and not having stuff we do need things like that so a root cause in many businesses is producing to a forecast that's not accurate and the solutions not to fix the forecast because that's not likely we could make efforts at it to hold people more accountable to their forecasting but there's a whole another solution and that is to use historic demand and demand very ability to figure out what is the right amount toehold in those amazon warehouses those del warehouses those walmart warehouses is target warehouses so that the customer doesn't have to wait but we're not carrying a mountain of of inventory that turns twice a year it's it's it's turning weekly if not daily yeah jane the value added like amazon must have on their cash reserves I mean that just keeps that flow of that just their money growing it does well but they take it and they re invested in innovation uh really smart cos we're taking this this money and they're re investing in innovation they're not just sitting and stockpiling it constantly looking for smarter ways to run their business is that with him okay so we've gotta have fast replenishment time not excess inventory so we've got to be ableto get things to the customer in sixty seconds not fourteen and a half minutes or ten minutes so some things we gotta review for replenishment time is it's it's additive so it's how long's it take for us to review what the customer wants okay or the customer to t to review it and figure that out how long's it take to send a pope of purchase order or a signal that says hey I need some thing how long does it take to picket from the inventory warehouse or wherever it might be how long's it take to make it if we have to make it okay or created how long's it take to ship it to the customer how long's it take to load and unloaded from the trucks or whatever uh the packaging how long's it take us to inspect it if we inspect it when it arrives this is all that all adds up to replenish mint time and it can add up to quite a bit so when we take a knee example we say you know what you can just pull it from our inventory electronically you can go in and buy any book you want to okay you have it instantaneously all right there's no waste in the system essentially that's ingenious but that's the that's the world we live in today it's it's it's it's profound that's what we're up against so you know if I can work with a careerbuilder type you know resume creation type organization that's also part would vastly network things like that a supposed to create a you know a resume like we did in the old days and I put it in envelopes and mail it out you know try toe try to get a job like we did fifty ten twenty years ago we're in a radically different world these days that kind of stuff's going on very quickly online and there's tools available to help us so if I'm if I'm trying to compete in the world today with a resume creation resume coaching business like we talked about in an earlier session I better be really savvy and aware of of the competition I'm under because otherwise numbers like these could crush me he's been these benchmark numbers okay so we start out with our our new value stream when we say you know what instead of having this requisition department however doing all of this you know hey you do this you do this filling up the business this aarp type of of approach what if we basically just said you know what the customer's going to tell us what they want and we're gonna we're gonna pull it to the customer and as we pull it from here it's gonna pull the whole stream forward? This is what you're seeing it amazon this is what you're seeing in tow at wal mart this is what you're seeing in small shops that are responding to the pull of the customer principle number three without carrying a whole lot of weight by the way if you're was solo preneurs you better know this model okay and if you need help meeting the client's needs you pull it in this may or may not be part of your organization this could be a virtual supply chain where its subcontractors it's I do this I'm a one person consulting firm and I've got a client like the u s navy or I've got a client you know with one hundred thousand employees or fifty thousand employees I might need some help yeah so I've got a network of people network of great consultants around the world I pull him in when I need him I don't have my my payroll over because that's that's that's game changing pulling men when I need him they get paid when they work when they had value and when they when they're not needed they're not on the payroll it's very virtual it's very lean all right so that's a pull model combine just means a signal for when to work and when not to work all right it's actually a japanese word essentially means signed card or signal card card all right and so this would be like a traffic light okay green means go red means stop so convents telling us one to work and when not to work it's a way for us than to govern our uh, our inventory management. So if if the combine system is, if it's full it, ah, diamond, you stop. And you did that intuitively yesterday in an earlier session because you could see it was full. All right. But our system wasn't designed for that. Our initial system was, you're going toe. You're just going to keep, you know, fill in the pipeline on dh that's, where the wheels fell off. So combine should be just a simple system. It's, the kind of thing where it could be. You know. A flip. You know, if this is the product we're making all right. And this is a con bon. And I'm working up front I've got you know I've got to combines two cards that say I need two products all right so I make a product and I send it the amazon or the walmart with the khan bon what do I do now no tells me to make another one I make another one ok meanwhile amazon or walmart or target or whoever's using whatever I just made guess what they do with the khan bon once they sell this where's this go come back to me it's a circular system you know where it came from the milk man taichi ono years ago chief engineer toyota came over to benchmark ford motor company he looked at ford motor company who was making seven thousand cars a day at the river rouge plant outside of detroit michigan seven thousand cars a day toyota was making twenty three hundred a year at the time I'm not sure what ford's doings gonna work for me I'm that little solo kind of company and what they're doing all this big stuff so what do I do while I'm over here well I'm curious about this supermarket concept they have in the united states and I'm curious about milk and how does milk just keep being replenished it's such a timely quick way all right and took that lesson away to japan and created the whole convent pull system which is the just in time fast replenishment system which of course companies like wal mart jumped 00:20:05.526 --> 00:20:09. all over an amazon and dell computer no dell computer 00:20:09.4 --> 00:20:12. operates with two hours of inventory on the on the 00:20:12.12 --> 00:20:16. shop floor and two days on site that's pretty lame 00:20:17.71 --> 00:20:20. it's not uncommon in automotive to find two days of 00:20:20.08 --> 00:20:23. inventory now on site two days. It used to be months 00:20:24.46 --> 00:20:27. all right, so that's con bon we have to think about 00:20:27.83 --> 00:20:29. that as we explore oops 00:20:31.76 --> 00:20:34. our system. So maybe we have to set up like a pole 00:20:34.54 --> 00:20:36. system or some kind of signal system that tells us 00:20:36.62 --> 00:20:38. when to work and when not to work so well, dumb o 00:20:38.61 --> 00:20:38. that 00:20:40.61 --> 00:20:42. and the process is to use thes. This isn't the course 00:20:42.94 --> 00:20:44. material, so you can really give you this and a lot 00:20:44.96 --> 00:20:47. more detail. But you know how many? How many cards 00:20:47.74 --> 00:20:51. do we need? That tells us how many mad max inventory 00:20:51.63 --> 00:20:54. we should have? So we said the benchmark, you know, 00:20:54.35 --> 00:20:54. with the 00:20:56.06 --> 00:20:58. that we saw here was zero, two, four. 00:21:00.46 --> 00:21:01. How many cards do we need? 00:21:03.86 --> 00:21:04. That would suggest for 00:21:06.26 --> 00:21:09. so four cards or going around in circles all right 00:21:09.83 --> 00:21:12. we're not going to get a fifth inventory you don't 00:21:12.78 --> 00:21:16. have a signal to do a fifth so it's going to control 00:21:16.03 --> 00:21:19. our inventory system this stuff it's really relatively 00:21:19.39 --> 00:21:22. simple but we have an amazing way and many organizations 00:21:22.99 --> 00:21:26. to really screw it up it's true so uh we have to figure 00:21:26.95 --> 00:21:28. out well how many do we really need 00:21:29.51 --> 00:21:30. to govern our system 00:21:31.86 --> 00:21:34. and there's no magic number there you've got to figure 00:21:34.55 --> 00:21:37. it out statistically how many is the right amount 00:21:37.51 --> 00:21:40. based on how long it takes to replenish and keep our 00:21:40.55 --> 00:21:43. customers happy and we use statistics to cover all 00:21:43.25 --> 00:21:46. of that and in further detail later 00:21:47.76 --> 00:21:50. okay so certain rules around combine nothing is produced 00:21:50.55 --> 00:21:52. to move without one you don't have a ticket you don't 00:21:52.96 --> 00:21:53. get into the show 00:21:55.01 --> 00:21:56. that's essentially what it is it's a ticket to the 00:21:56.85 --> 00:21:58. show it's a ticket the work 00:21:59.56 --> 00:22:02. qualities insured prior to movement so we design in 00:22:02.09 --> 00:22:04. quality if it's not if it's not right whoever it comes 00:22:04.93 --> 00:22:07. to the first thing to do is check the quality so we 00:22:07.29 --> 00:22:10. don't need these inspections later on it's bill tried in in these days its built in visually and all kinds of ways but we check me if it's no good it's going back well we're not going to pass on poor quality we use a cell in a pull approach for for it so the the next cell is pulling from the prior cell, the next workstations, pulling it forward as a solo preneurs I'm pulling in what I need when I need it. I'm not carrying around a lot of dead weight, all right? It's very precise in terms of quantity. So con bon card could say we're using standard units of ten. So all right, we're using standard units of ten um hmm, that means each time we move ah, a batch forward it's of ten for one card means ten. One card means one on one card means fifty but it's very precise it's very standardized. Everything is standardized in state a stable and it's smooth and level. So what we see here, uh, is a graceful swimmer hyg unca this peaceful order that we're looking for you could put whatever information on a car combine card that you want. You can stick these on a white board, so it shows you there's a great illustration of a visual control board right here it creative live. I can't help but notice stuff like that when I when I go out and look around right? So we could see where we are and who's next and what's going on it's, right, it's right up there where you can't miss it.