Simulation: LeanSigma Game - Round 2

 

Run a Better, Faster, Leaner Business

 

Lesson Info

Simulation: LeanSigma Game - Round 2

This brings us to some fun and we're going to execute the round two of the lean sigma game, so we're going to get you back into your your roles will review those very quickly and, uh, the purpose here is to give you a chance again now through some experiential activity, tio to bring the life uh, some of the tools and concepts that I have now been sharing alright do appoint kaizen using to make this is going to provide us a reference point for further discussion help us, uh, measure and prove that we made a difference let's let's see it again and have a little fun. Uh, if you recall, we captured our metrics from round one, we're going to capture him now for round two, the same metrics. So how long's it take for in order to get to me, I'm gonna play the customer. I've got my my, uh my little customer placard up here, so I'm gonna play the customer and be right where I was before all right and everyone's going to play the same role that they did before and then be in the same place, we ha...

ven't changed that at all, but we're going to measure this we're also going to measure the financials just like we did before earlier we lost quite a bit of money and we're going to use the exact same measures financial measures to see if we can do any better make some money hopefully that's the idea the rules are the same as before its time I'll keep the time you can on lee do the work in your own department we have not crossed trained people we've not changed any policy that's for another day this is this is an organization that says you know what? The problems that diamond department that's what we're focusing we're not changing any policies and other things got kurt you're looking at the diamond department itself and you're looking at improvement within that particular function do you also consider the inputs and outputs as part of that? Can you can you do something to address the inputs that air coming you or or is that sheriff was that a system comes in no way could do an aipo diagram that input process output diagram for the diamond department we could say, well, what are some of the critical inputs coming into the diamond department? Well, the batch that you're receiving okay, another input would be the training you're getting another input would be the tool you're using right? Uh the communication system that you rely on the information system, the data that you have all those types of things we say all right let's look at all of that but in this particular simulation what we've just isolated as a significant problem is the tool and I and I want to emphasize this because a lot of organizations think it's you know, if we just had this new software you know, if we just had this new system you know that would just solve all our problems and I see companies large and small small spending lots and lots of money on a tool a software for example to try to fix a system that's so poorly designed and dysfunctional and so complicated that now they need a really complicated tool just to keep track everything and instead of simplifying and subtracting, they've added even more in this case they've added tool in many cases they spent a lot of money on it and someone sold him on it and you've been there you've seen it so in this case we're just gonna simulate that and see what happens all right, so you're still going to do your own work you analysts cannot help okay the analysts again at home they can they can they can observe the game so watch it be played take notes ask questions later it'll be fun we want to keep safety in mind of course and no changes to the system so you can't be changing policies and things like that jonah you're the manager you still you can't change all those things but we're going to go ahead and provide a tool teo cur in the diamond department so we're going to exchange that ruler we've just we've come up with this brilliant idea of using a template so this is a this is just a template it only cost us a million dollars not really, but it could have cost whatever but we've come up with this so this template you can see the one that's highlighted here is in fact the perfect size for the for the diamond you know? So you can load that once and draw perfect diamond, adjust it once more and draw the second diamond so we've gone from eight adjustments per sheet with the ruler to two better not best perhaps, but significantly better the other thing we've we've been able to do with this and we're so proud of ourselves for this, by the way is we figured out a way to poke a yoke or mistake proof the tails those tales were killing us yes, you know earlier so uh with this unless the things slides on your kurt you're not making you know you're not making those tails so it's just should be a more user friendly tool the quality should improve the throughput should improve because we have fewer adjustments and we just think, wow, this is and we've even told the customer jamari has promised me that hey, um we've made a new investment and you're going to see significant improvement she's got me all excited about that so I wanted to show me the data all right? So we're gonna we're gonna do that so I am going to exchange this for the ruler there you this is I'm putting us up on craigslist or ebay or something so you know anybody who wants it uh old tool is welcome to it er and so what we're going to do now just to review very quickly uh susan, you are going teo fill the pipeline you're the requisition person so you check in that box signing your name stapling and off to the races all right, phil that pipeline kurtz got that template in place now he's ready to roll and draw those beautiful diamonds it's going to go from the diamond department to the red circle department and cats uh got her red stickers she's going to blow those inside those diamonds excited to do that? All right, she's gonna hand off to kate who's going to do that first review to make sure I thes diamonds are good these dots are good. I'm happy with this and on it goes teo yellow circle jane is going to put those yellow dots inside the rings justus beautifully and artistically as you did yesterday thank you more of them to start out with a chain we can't change that policy yet you know we've got this tight control policy minutes you know the dots keep disappearing around here so we need to have a control system for these things that we treat him like a controlled substance now so it's like locked up over here in the requisition area so you want more dot you gotta turn in that empty sheet for a full sheet all right and then from yellow circle we goto approval and kimberly's going toe lookit all over sign off hand it back to susan who's gonna remove the staple and when she's got a good one she's going to deliver them to me we're going to time it just like we did before and and see what we can learn all right and I say something to my team of course we begin so I actually I I feel I feel like today's our day team our clients are relying on us we got to get it right do you like your new tool all right I think so okay, so we're excited for you and just, you know, go team we can do this our customers are waiting for it, okay? We feeling good absolutely there's pizza party after way having the budget now are getting the costs of yesterday so all right but but yeah let's do this all right? We're ready to go okay, I've got the official watch up here and, uh, ready set go game on all right let's see what happens here now again we we kept the line empty to start the game we stripped out all the in process to expose any imbalances we have anything like that because if we come in to work every day in the lines off filled which is typical and important we can't see how balanced we are everybody looks busy but we haven't got a good understanding of the balance of between tasks so by stripping it out for the purposes of the simulation of the game is to show us this imbalance so once the pipeline gets filled susan's off to the races here once it gets filled uh we'll see if we've got any better balance now I'm curious, but I want to ask the manager that's like syrian center on providing the character or the pizza we had pizza party end of town I'm curious why you didn't want to remind everybody of what their role wass and why what the challenges they face yesterday and just think about that before we go on well, my management style is not a hang a cloud over a new day and I think I think they had a pretty clear idea of what we did wrong and you missed it but afterward we had a little huddle you missed it but you know I just wanted to start fresh and just let them let them feel good today's a new day that makes perfect right sure is moving along. Plus you did I brought in an espresso bar this morning. You didn't you didn't see that, but I did that as a free incentive. Well, we're gonna have to take it out of people party later, so we're just getting some mediums? Yeah, I did something on creative lives instagram about today's donut day. You did? Yeah. All right, we'll check it out, but don't get on social networking. Our attack here. All right? We've just passed two minutes, so the customers still going help jamari I thought you told me I was gonna you know, I feel better. I'm getting a little nervous here. I'm I'm going to clone myself now because I hired a customer service specialist. So the other mean oh, right. Ok, so way added some staff what? So tell me what's going on costumer service rep. Well, hey, I just wanted to let you know that first of all, we want to apologize for what happened yesterday. We understand your concerns. We know that. You know, you know what the issues are and we have made some improvements tio r process and we know what's important to you, so we're going to get them to you, uh, so that when you look at everything you'll be able, teo, feel better than you were yesterday? It's going to meet your specs, we understand your expectations weigh don't want to know let you know again that we value okay, yeah, because I'm I'm under serious pressure now, in this day and age in my in my business where we're doing this lean six sigma operational, excellent stuff, that's it sze demanding were being challenged to reduce cost, become more efficient to do more with less these types of things, my clients and my customers there are making it tougher and tougher on me. Um, so I just, uh, I sure hope you're right because I've got competition, by the way, ofyours banging on my door every week now saying, give us a chance because we can d'oh all kinds of amazing things for you and I I don't know honestly, whether to believe him or not, I'm not sure they're credible, so and I don't make decisions without believing that it's a good one, right or wrong, I have to have some confidence and, uh, boys, some of the stories I'm hearing from some of these air pretty compelling oh, I just want to let you know that we hear you, and I want you to know that we trust your instincts to go with us, so, uh we want it we want to prove that right? And we're here to make sure that happens and I'm in touch with my manager and she's letting me know where things are at and I'll be back in touch with you about that before we hang up can you talk to your manager or whoever and help me know when I'm going to get my first order yeah actually I apologize for not asking that of you when you wanted by so I have all we're ready wanted it I needed it I needed it sometime ago were now four and a half minutes okay, I've got nothing. I will get that information. It was great talking to you. Thank you. Okay, sure. Impartial observer here that sounded to me in a way that you're setting yourself up for failure. Okay, that was incredibly positive. I understand why you feel you need to come out that reassure the customer but you've left now no room for your team to fail. You're right um he's how disappointed he is going to be if he picks up one order that has a tailor oh, wow that's a really good point. Okay, well that's a that's an interesting way to discover you know, obviously you look outward face to the customer of the company you of course going to put your best foot forward, but is that always the best thing to do well, now that you're talking to the manager ofthe I'll just say that you know yeah that's a really good observation of my cut steamer service specialists and I'm gonna have a talk with them about over over promising if we want to leave some room for reaching above the mark okay, so but this time it seems to be blackmailing you think it's a good thing a customer you want I just want to know what I'm going to get my stuff first I hope it's good when I do get it but I'm still looking for that uh visibility and traceability you know, I'm used to dealing with companies where I can click a link and I can see where my package is or my pieces or whatever and not I'm not seeing it here some I'm getting really nervous because I get people picking on me now we're we're over six minutes now I still have nothing so mi is the manager hey guys, how are you doing where we at? How are we doing? I'm saying quite a buckle make okay, so how many orders we have ready and do we have enough t shit it's all in process at this point? What process? What point in the process? Um final approval okay, so we're sucking approval right now can we get an e t a is one that's got to go back to back like before we want to keep track of any rework anything that has to go back and be reworked or any scrap that's actually interesting because kimberly there did actually take that step yesterday I think everything just kept moving forward so I think that shows a definition of the rolls and understanding what each person needs to be said that change so now we walk into the business so to speak with the pipeline full and everybody's got something going on for the most part are quality department are reviewing our approval while not necessarily actually reviewing our proving something it could be writing manuals on howto do better quality you know, eso standards and things like this left to our own devices we create work way find something to do we fill the closet space we fill the time so that doesn't mean it's value added one of the earlier takeaways we find something to do and everybody looks busy so I won't let you guys know that I have a fan here and actually the pizza party has been moved up to mid day we need to actually get these orders out and the pizza is actually hot can you smell it? Once we get these quality orders to our customer, we can start this pizza party how about that? Yeah all right but it's got its speed the solution? I don't know I'm just trying a new tactic so where were eight minutes now and I've got nothing and I'm really wondering about this new super duper thing you've promised me is what's what's hope you didn't spend a lot of money on that template lookit I'm working furiously they want that pizza no you smell it from my carpal tunnel way have a claim in action all right susan where we have just one more order okay? She was the one getting just this is this is what shocking to so many organizations where they think it one fix in a system is going to fix it all and they will take away here is that we're all part of a larger system whether we're solo preneurs big businesses way rely on suppliers we rely on customers we rely on like you talked about you rely on people all around you tow run your business so if we're not harmonized we're not in sync this's what we witness day after day after day but the big sea is going way got one at nine forty five we've got fifteen more seconds for those diamonds are beautiful kurt I have to say congratulations except for this one and two one zero all right, take a break now while you're taking a break I do want you to do just a little bit of counting so what I need to know is how many do we have in process? That would be anything that's being worked on in any kind of way so count those up if you will I look at the quality you know how did I get one without any red stickers I don't think they fell up um wow and it passed to inspections that I can't accept I'm sorry so I've got one diamond where the line doesn't actually reach the dot so the template failed us there uh this one's good okay all right this one's good this one's good this one's good this one's good wanted teo let you know that we are aware that you have the product in your hand how how are you experiencing it? Are you familiar with the terminology six sigma I've heard of it you mentioned it on the last call yeah way we're learning it as well and six sigma essentially aims at close to perfect quality realizing this really no such thing in a sense the largest scheme of things uh it's statistically it translates into three point four defects per million I got two eight so we've got really ah lot of work in front of us from a quality six sigma perspective which will cover in another segment so so it better then what I had before so let's put that let's put the data up and then we could speak to the data I I got my first order in nine minutes and forty five seconds how's that compared to before significantly better and how would that make you feel, sir like you're moving in the right direction but I'm going to reveal teo and a few minutes what your competition's promising me and that might tell a different story and incidentally you know what I needed in ten minutes was thirty units and I got six good ones so I got six good ones by the way that's a triple what you got me yesterday uh in less time so yesterday it took fourteen and a half minutes to get me to today you got me six good ones in less than ten minutes so you could argue from your perspective that statistically you've made huge improvement you're through puts up three hundred percent how does that sound? We tripled it wow and we reduced the amount of time it takes in fact, if we ran tau fourteen and a half minutes maybe we quintupled it you know, maybe I would have gotten a lot more uh let's look at work in process did you count up how many? How many do we have? Susan what do you have there? So susan has ten and process kurt has eleven kate how many you have? Six, six, six, seven and seven six and seven how do you have seven with two batches? I'm just curious county that I finished couple any anything in there was a town two batches of five two batches of five so we got ten, so forty five total. All right, so look what happened to our work in process. I went from fifteen to forty five yesterday, susan was governing that just a little bit. She didn't want to overwhelm kurt, but she was thinking today, you know, that room template, all the hype we've been given it I'll fill this pipeline up, I want my bonus I'm getting incentive to do it so and not that much is infront of kurt there's there's now there's inventory all over the place so our system is still not in harmony but from a point in the system perspective because this was a point kaizen and let's just pretend we're the project leader where the black belt six sigma black belt the lane six sigma black belt on this can we statistically and measurably prove we made a positive difference. Answers yeah, of course we can. Can we? If we interviewed curtain will do it right now. Was your job easier than it was before? Oh, absolutely. Okay, so it was much easier, more user friendly that's something we always look for in safety and things like that were able to get more through was your throughput up? Yeah, something in the way faster and it appears your quality was significantly better, all right? A supposed to tails the only show I had was the template would slip a little bit and I would have a not straight line but otherwise very good in fact, I had to rejected on ly one was the diamond itself the other one was the red circle getting stuck in the diamond all right, so we had that we had to uh that reached the customer was there any internal rework or scrap and he didn't go back internally? I've missed a page so I had to go back. So one is that it? So we had one internal to external with three total down from twenty two can we prove we made a significant improvement terms equality indeed we can but now from that perspective look it we can put all kinds of statistics on this to say we went from twenty two to three that's astronomical improvement statistically but now when we compare that to well, we had three out of six delivered okay? We don't know whether some of this in process is actually good or bad that statistically it would seem it's much better from from before but three out of nine ten even even forty when six sigma is three out of a million ways to go there, right? But but clearly we can say we made it better not best not perfect productivity wise and we're not gonna have six good ones ok divided by seventy labor minutes let's just get that number real quick so we have ah see huh uh oh, well that's a good point I won't charge for that just for now but uh yeah that's a good point uh we have six divided by it could be divided by eighty for that extra rat but we'll just divide it by seventy for now so we got point zero eight five point zero eight five okay, so how about our productivity? Look at that. Yeah, quadruple really were up from point two two point oh eight point nine almost so we quadrupled our productivity boy, that would look great in a newsletter, wouldn't it? We quadrupled our productivity we improved our quality immensely we improved our throughput, we made the job more user friendly. Wow, we're feeling good let's see if we can for the pizza party dio but we're going to have to just wipe our faces on that and start again because we have still have to do better and we can and we can there's more people coming. It concerns me that the management seems to think the only problem here is you need more pizza I think the bigger problem is that way it's going to be gluten free some of it about that all right and the financial numbers air out good news we did better bad news we're still underwater so we're still losing money so we've now we've cut our losses though from two hundred forty two million dollars or dollars or whatever you want to use their teo ninety so we could feel good about that were you know, on the trend line we're doing better but we're still not making money and let's talk about the customer for a minute how's the customer feeling at this point uh discouraged because I really thought I was going to get what I needed I thought I'd made you you didn't outstanding job um working with me detail ing my critical to quality components we spent a lot of time on that in earlier discussions so I need those lines I need those dots connected in the same way every time things like that but I really need thirty in ten minutes um I don't like the idea that I get any anything wrong especially when you're checking it you know, a couple times internally so I'm at this point where I'm I'm more open now toe to the competition because I I'm sure this comes up for a lot of business owners or professionals setting expectations and also what you expected like why why would you expect thirty? Is that what everyone else is doing or is that unrealistic or how do we how do we keep that fermentation process that's a great question the reason I need thirty is because my customers need thirty I'm actually not the big c I'm one, I'm one little sea in the chain, so I need these t delight my customers, they're pulling from me at a pace of thirty, uh per ten minutes, three a minute, so if you want to get even more specific about critical to quality, you might ask me, how do you use thes? And I use them one at a time, and I averaged three a minute I don't use them an aids even though they're shipped in aids, I using one of the time and I used an average of three minutes so it's not my expectation, is that that's what I have to have to run my business so it's it's pull its demand from the market, so if I don't have, you know, the product or the service, I don't get revenue would actually have started on the sales and like, why would we have thought we could even fulfill that? Because we've not done that before, so? So maybe we we actually sold something to the wrong customer who needed more from us than we could actually dio sure. So maybe you know, you're not clear on what your capability is, maybe you're thinking what we really thought we could do that, but apparently we cannot were the data say otherwise. So this is important because a lot of times we think we can do something but voice of process doesn't come from we think we can do something where does voice of process come from? It comes from the data what's the data say no offense please okay, I love that your enthusiasm and that you think you can do it but the data say otherwise so that's very put important and critical business principle what's the data say because of the world's full of opinions and ideas and dreams and things like that what's the data say so this is what I'm always saying show me the data let's let's let's let's keep it honest now this does not mean you don't have the capacity to do thirty so the next thing that a lot of people might say is well, I guess we do need to add we definitely know we need to add maybe we need to add more than a customer service rep maybe we need another diamond operator and maybe now in this case maybe we need you know, another dot expert another yellow dot person okay? Or maybe we can figure out a way to cross train a few folks so here's the thing about capacity a lot of a lot of times were under the illusion that we don't have the capacity when indeed we do but we're wasting the capacity is hidden it's there and it's hidden so what I want to do not isto provoke just a little bit more conversation is, uh, talk a little bit more about the questions appear and then I want to reveal to you some the benchmark data this's benchmark data coming from your competition now that we've we're up against and this date is getting to the customer so the customers now comparing this data with something else and we'll see if that doesn't open some eyes just a little bit more. So you know what happened? Are you at all surprised by anything? Why? What surprises you? How would you go about summarizing this, so to speak? And then what are some of the advantages and disadvantages to point kaizen? Because clearly from the point, things are better and from the system they're slightly better, but maybe not maybe not maybe not enough. So what? Any surprises interaction from the global chat room too? We can hopefully work it into the conversation. Yeah, I'd love to know if it was there any surprises? Yeah, james, my office a surprise, but maybe I just always think about that that test the experiment that was done in the seventies, that uc berkeley they had to be stopped because there was that fed ng out of of, uh, punishment to people you know about that one landmark study but just that you know just that from the outside go faster faster that's not the problem it's the problem of the system good people but I was interesting to see how pelican that pressure it just does not help but it's the system yeah yeah it doesn't so we have to realize that good people in a bad system to quote demi bed system wins no contest and we're all living in systems okay it's we've got school systems, healthcare systems, business systems of procurement systems every we're surrounded by systems and it's uh it gives us empathy a lot more when we're dealing with somebody you know it's an airline attendant it's a hotel attendant it's ah it's uber driver it's whoever, uh when we realize you know they could just be a good person trapped in a bad system if we're having a bad experience you know the flight's delayed something wrong with the room or you know, whatever. So any other any other observations of questions from the online audience before I reveal the the bench are sure yeah philip belgium says I think they've already had two chances I think the manager needs to kai's in process on alameda says maybe a color photo a color photocopier would've been helpful after the first one is made perfectly a robot workforce on dh then philip belgium against us at the location of the people following the process flow ready flame ira same well, maybe change the batch size and have flexible rolls. Okay, so we're already getting more ideas. This is coming from that's energy I talk about people we've made we're making progress, we're getting we're getting a line, we're now we're aware of what it is we need to dio and more and more ideas start coming in that's because already flame are saying they would eliminate one of the two signers but immediately I think, well, we've got to sign off and still we were delivering floor product so maybe that's not the way to anyway and then there's a summary of the situation it's bad it's bad and we just threw some money at it so one of the things we actually just did we violated that principal creativity before capital because the tet the template you know it's just a template in this simulation but in real life it could be rather expensive. So we just threw a big air p system or big software something at a complicated process without leaning out and simplifying the process first and that's a that's a very common and big mistake let me share with you what the benchmark data is just so that uh I could process this and we're gonna take this into the next segment and, uh compete with it so this is what the customers now being proposed so this is a value proposition from your competition and as great as we might be feeling boy we wait we did look at these three hundred percent improvements and look at the fact that way made things so much better that content without context is dangerous the content are statistics without the context of benchmarking is a dangerous thing so sola preneurs entrepreneur's business leaders all over the world you need to know what you're up against you know the competition is doing this case the competition says would get you your first order in sixty seconds without inventory with the line empty so we're not stacking the deck with a bunch of inventory we'll get to that thirty units that you want in ten minutes three a minute that's how you want it one at a time if that's how you want it using one of the time we can get you all of this with no more than zero to four in our work in process at any time we keep our inventory is turning very fast we don't have all of this cash tied up all of this inventory tied up in the process we're going to run our business very lean with zero foreign units and inventory that's astonishing is it not how in the world you're going to do that that can't be right we're gonna do this without any worry worker scrap we run a six second operation and our productivity is one point. Zero one point zero. What we just quadruple our productivity were high fiving and having pizzas, and we're up against that stay tuned, cause that's what we're going to get you in the next segment. We're going to compete against that.

Class Description

Ready to finally let go of the unproductive processes that are holding you back at home, in the office, and in your creative life? Join educator and business consultant John Murphy for a three-day introduction to streamlining your creativity.

As he shares techniques from his critically-acclaimed books Beyond Doubt and Zentrepreneur, John will cover ways to make your day-to-day life and tasks better, faster, and more efficient. You’ll learn about the DMAIC model of process improvement, and how it can be used to approach problem solving in an effective, rational way. You’ll also learn about how to prevent processes from being bogged down by waste, duplication or redundancy. John will cover Kaizen -- the art of making good change -- and give you tools to change both your processes and your mindset.

By the end of this course, you’ll have an increased creative energy and processes that will help you implement creative solutions in a balanced, harmonious way.

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