Run a Better, Faster, Leaner Business

Lesson 8 of 29

Summarizing Your Current State

 

Run a Better, Faster, Leaner Business

Lesson 8 of 29

Summarizing Your Current State

 

Lesson Info

Summarizing Your Current State

That we summarized the current state said all right well here's where we are today terms of market you're a couple of soundbites process flow couple of sound bites here's our map here's our here are our maps plural here's what our organization looks like touchpoints somebody our client facing touchpoints hominy how many people is the client got to deal with because a lot of times clients will complain about that if you know I got three different people calling me with three different questions or the same question three different times that's that's frustrating so how many different points of contact we have with clients pay attention to that okay summary of the support systems we haven't play incidentally if you're mature business you might discover that you know what we've got way more support systems than we need I've worked with big companies where they've had hundreds of softwares when a half a dozen could do the job but they keep adding and adding and adding and they don't decomm...

ission so it just keeps getting more and more and more complicated self all right some of our financial state so and this is where we then say all right, what are the critical you tease and what are the brutal facts now keep in mind these are if you're a mature business or you're in business you've got udi's today everyone's got him everybody's got these brutal facts they want to pretend like they don't it's denials resistance but there there bring him out and incidentally when you bring brutal fax out and they're clearly fax it's a great way to awake in your senior leadership okay it's like that the show undercover boss you know where the ceo is go out and they learned things about their own businesses that are shocking well they're getting data that's pretty brutal and the idea here is to say well I don't I don't I put together a story of the brutal facts to my boss 00:01:58.646 --> 00:02:00. okay help with uh 00:02:01.54 --> 00:02:02. shake things up a little bit 00:02:03.82 --> 00:02:06. they have to be facts though we call these sometimes 00:02:06.94 --> 00:02:10. in business the ugly babies reason we call it that 00:02:10.41 --> 00:02:12. is because if you tell somebody their baby is ugly 00:02:12.56 --> 00:02:14. you know what kind of reaction you're gonna get you 00:02:14.9 --> 00:02:17. know you know you got two problems if you got the 00:02:17.4 --> 00:02:20. original one now you got an emotional warfare going 00:02:20.19 --> 00:02:20. on 00:02:21.62 --> 00:02:23. treat the brutal facts 00:02:24.16 --> 00:02:27. like they're ugly baby so to speak meaning you don't 00:02:27.35 --> 00:02:30. call anyone's baby ugly you don't express opinion 00:02:30.43 --> 00:02:35. or judgment you simply reveal the data so did you 00:02:35.29 --> 00:02:39. know we take one hundred eighty two days let's make 00:02:39.0 --> 00:02:39. a vitamin tablet 00:02:41.72 --> 00:02:43. by the way we cover about fourteen point two miles 00:02:43.94 --> 00:02:47. to do that did you know that that's shocking 00:02:48.59 --> 00:02:52. I can't be right we'll hear the fax so we use this 00:02:52.51 --> 00:02:57. baseline process to bring up the brutal fax to motivate 00:02:57.18 --> 00:03:00. change where people draw their own conclusions from 00:03:00.31 --> 00:03:03. the data we don't we don't tell him I always say it's 00:03:03.81 --> 00:03:06. kind of like sands reporting live from san francisco 00:03:06.92 --> 00:03:10. here the brutal facts I'm not expressing an opinion 00:03:11.32 --> 00:03:14. I'm not calling anyone's baby other you can conclude 00:03:14.82 --> 00:03:20. that we took fourteen and a half minutes to deliver 00:03:20.98 --> 00:03:24. two good units out of sixteen delivered to our client 00:03:26.58 --> 00:03:29. that's a fact and I'm not calling it ugly 00:03:30.52 --> 00:03:31. I'm a carny 00:03:32.82 --> 00:03:35. problem that we have a lot of times is we don't think 00:03:35.87 --> 00:03:38. that way and we confuse opinion with fact we started 00:03:38.91 --> 00:03:42. expressing opinion you know I think this is a stupid 00:03:42.13 --> 00:03:45. way to run the business I think this is uh this is 00:03:45.07 --> 00:03:49. all wrong this is this this should be different translation 00:03:49.01 --> 00:03:51. you call my baby ugly you called my department ugly 00:03:51.19 --> 00:03:53. have twelve my company but ugly called me ugly that's 00:03:53.99 --> 00:03:56. the translation a lot of times when we're not clever 00:03:56.85 --> 00:04:00. about the facts so this is about let's get the facts and let him speak for themselves we left off in the last segment with just a kind of a high level architecture of a value stream map here the value street map said all right if we were going to draw one of these from scratch we had a big white board or big you know piece of brown paper rolled out on the wall which is how we do a lot of these and these post its and such first thing we'd put up here thinking with the first principle in mind is specify value in the eyes of the customers so let's put a customer box up here and then let's lay out what what exactly is it we're getting paid for what the customer needs okay well I need thirty units in ten minutes oh all right expectations diamonds red yellow you get you know from before you you remember that the critical two qualities no tails things like that all right now how are we going on how do we currently go about doing it? We could map the current state or if we're starting up a business and we want to figure out what's the best way to deliver that value okay would we separate but we're going to need a diet somebody's good at diamonds and we're going to need some buddies gonna have to put down some red dots we probably ought to do and in process check because if it's not right we don't want it to keep going so let's do it in process check we got to get some yellow dots down there so we could design it just the way it was designed and that's not unusual okay or we could say we could design it a totally different way but in this particular case this is how we did it we created these activities he said now we're gonna have to make sure these folks you know get stuff to work on so requisitions gotta like fill the pipeline and we've got to make sure we have dots and we have sheets and we got something to work on and then that same department requisition susan you might actually be coordinating with play what happens when you run out of dots you gotta order you've got order more dots for these guys what about when you run out of forms we've got to get more forms so somebody's coordinated all that but that's a very high level picture of ah value stream or a small business all right so we draw a picture of it because a picture paints a thousand words so let's let's look at that and then let's populate it with some data so this is blending the define and measure now we've defined it now let's populate it with some measures I mentioned toyota uses a tombstone to represent inventory but oftentimes in these maps it's just a triangle that says this is where our our inventory ous so we look at that we go while we got a big pile of inventory right there way we've got inventory all over the place so inventory is we recalls one of the seven wastes it's a form of waiting that's something waiting to be worked on just sitting there and if it's waiting it's possible the customers waiting all right it's cash too by the way inventory is just another word for cash so he had all this cash tied up in the system you know so ah mmm all right, well what else do we want to know what other metrics to that question about what are some simple metrics cycle time's almost always one of them so c t here stands for cycle time so how long does it take us tio draw two diamonds do we know let's measure it how long's it take us tio stick the red dot down inside the the diamonds all right we can measure that it's a cycle time how long's it take us to review it how long's it take us to do the yellow dots so what if we said well to draw two diamonds takes us twenty seconds that's a typical number with the ruler and yellow dots are the red dots is usually it's in the neighbourhood of six to eight seconds to do two dots on a sheet review this is per sheet not per batch per sheet to review it that takes under five seconds and sign off typically yellow dots I'm more in the neighborhood of fifteen to eighteen seconds is a typical cycle time for that activity all right then what? Well then we review it again we you know, we we approve it that takes assuming it's good. So that takes about five seconds and then we've got unstable it that's non value added but we still have to do it and then we have to deliver it but if we add all of this time up let's just call it twenty seconds and die well in requisition we've got to check the box sign the name okay and it takes a couple of seconds most of the time though from the sheets perspective what's it doing nothing sitting there doing nothing what are we getting paid for the scene that's doing nothing most of the time this is a radical shift in the way people think about business because they don't necessarily think that way they think about the people and they're all busy and we need to make sure they stay busy but while they're all busy and by the way we could have fed we could have piled up inventory in between so and you come in tomorrow and you come in the next day you got plenty of that in you never get ahead you got stacks and quotes and stacks of work to do because we've designed that right into our business model so now we've got all this stuff out there that we got a manage and everybody is kind of like going free because all they hear is with customers mad at us because we're behind so something something's crazy but this inventory is all a form a waste it's clogging things up here's something interesting if we had the system fully loaded right now with stacks of stuff okay and then we were going to do a time study on a new order coming in so now a new order is coming into the simulation but we're using a first in first out fi foh accounting method or or processing method so before we can work on that one we have to work and all the other first ones that came in ahead of it how long is that order going to take to get through this same system we just observed think about that a minute how long will it take now we have traffic on the highway where is in the first round we don't have any traffic on the highway it open road it's good take longer isn't it could take a lot longer so all of a sudden now we've got oh my we've got a big traffic jams we gotta we gotta for uh eighteen wheeler appeared it's flipped over me sit here for a while it's going to take a lot longer so inventory is actually just made it worse and the really clever companies figured this out and they learn how to turn that inventory fast and service the customers better which is a paradigm shift because a lot of companies think well the best way to serve the customers to have lots of inventory you know that's that's a paradigm shift right there because it's an expensive lesson for a lot of companies all right, so along the bottom here is weak. We we put together a little display because what we're trying to do here with a picture like this is make the data interesting and meaningful whether we're trying to sell it to a fine answer or a banker or sell it to a boss so we use images and charts like this all over the place to gain credibility and convince leadership teams or investors to agree to the change mathis and to put this critical data in if you're the leader it's to convince yourself and teo teo to give yourself something to eat sure could be and if you want to start a new business and you write off on a business plan and you actually could do your homework, you get your research you could very likely talk yourself out of that business idea I was like, well, this is just a lot more than I thought it was going to be so I mean they're gonna have to get help which I will continue to talk about or I'm gonna have to figure out all of this or I'm just going to throw the idea out and just keep doing what I'm doing a lot of people have dreams and they have ideas around starting up a business but where the rubber meets the road is in the detail, it takes a lot to really build and sustain a healthy business and again, you're not going to do it alone. All right? So now look at this timeline here's the line takes in this particular example sixty days from start, if you will, to finish sixty days. That's, the synonymous in this case, with fourteen and a half minutes, sixty days of that sixty days. How much of that time was value added activity? That would be the green bar. Across the top ninety seconds here maybe ninety seconds here it's shockingly low okay less than five percent of the activity time is value added and virtually every every business on the planet with some exceptions of course now the mature lean companies have been after this for a while um it's a lot more but look at that and then look at the non value added activity which is the red so that's activity that's not adding value but what do you see the most of and the answer would be white white space yeah it's nothingness so we pull one end into production you know we we do something of value and then we adjust we moved the ruler with whatever then what well we it says it sits while we flipped the pages and work on all the other buddies and then we move it so that's it that's not an unusual looking time value map alak along the bottom they're not come back to the time value map in just a little bit as well but that that's just just a characterization of a current state if we have one or we could characterize a future state plan like a business plan in the same way to say this is what it looks like a very powerful tool because it gives us ah perspective than of the landscape the oral landscape so the time analysis team which I tapped in the very first segment session one was, if we had, you know, if it people at home and you wanted a task, you could do a time analysis task. When we run, this inn in large workshops will actually take people right from the room, and I'll do time studies. We'll time the diamond depart, how long it takes getsem data. Well, time, uh, the sheet from start to finish all the way through, and we'll get times on. Each of the value had non valueact activities, so we can characterize it in a value stream app like that were like we did. Okay, so this is a critical piece. Make sure that you think in terms of time, whatever business you do, how long's it take to order stuff, tio, receive it to test it, to install it, to do whatever it is you d'oh. Those cycle times become critical. So the time value map this is essentially what we saw across the bottom of that value stream map this example here's one hundred in eighty days two d'oh whatever but when we look at the ratio in this case of the value add non value add okay it's about fifty fifty here so half of the stuff we're doing is value at half the stuffs non value add but once again most of the opportunity is where that's the nothingness so be careful with that because you know I run into it a lot I got to run into people they want to argue about is this that I really value added activity or non value added activity that you go back and forth and back and forth on you're splitting hairs get out of the weeds pay attention to some of the bigger action all right here's here's where it is so this is a very powerful tool to display how abusive we can be about time and not really understanding how we use time it's a very valuable resource all right this one of my favorite tools actually because whenever I'm going to go do an analysis on a on something I'll pull out a process analysis chart very simple since fifth grade stuff a lot you know, a lot of folks it's all right? You know susan, I want to do a study on what you're doing in requisition I don't know a thing about it you know, so step one what? What? Step one. And you might come back to me and say, well, here's, step one is ah, check a box. All right? Is that value added and on value added, I don't know because the only way I could know is if the customers told me they have to have that box checked. Honestly, a lot of people don't know so let's just say we want we talked to the customers and said, you know, that little box that susan had a check the beginning is that is that, like, critical to quality? Is that critical, too? And you might hear me say what box? I don't know what box that that bottle. I mean, I don't know. I don't even look at that that's. That's, some internal thing you guys do. What about that? Her signature that's. The next step, she signs her name. You need that. No, you don't. I don't need I don't need that. So what do you need now? It gets interesting. I need diamonds that don't have tails. I need red dots. I need yellow dots that's about it. And I need some form of traceability or visibility. Oh, what about the staple? What staple you're stabling it and then unstable in it I don't that's this replicating a batch I don't I don't I don't need a staple matter of fact I wanted to talk to you a little bit about those little holes fromthe staples that there that bothers me I don't like that okay that's annoying all right so I was suddenly start to take this right down to take uh take curtain the diamond departments that curt step one what do you do well I load the ruler loading the rulers that value added or non value added non nothing's changed then what do you do draw lines that's value added then what I just the ruler oh just ruler non valuable next draw a line to do one sheet you're making a adjustments and eight lines so it's about a fifty fifty ratio of value at non value add and then after that you're flipping the page flipping the pages and value added so we've got waste all throughout the system but we don't really know it because we aren't asking the right questions you're not aware and we could measure distance if there's distance traveled actual task or cycle time okay if there's anything in q you know inventory waiting we can measure yields right first time yields so this is just another little example of a simple tool to really characterize a current state and then from this too we can map it deacon analyze it we can really gain intelligence from it so simple step is attach yourself to the delivery ble whatever it is it in this case the game form record all of the steps take it all the way through if you want collect available data and then figure out a clever way to display it make it interesting okay this is often called the spaghetti chart it's a physical process map we would use this to teo to simply display the fact that we take fourteen miles tio make a vitamin tablets what in and out of warehouses over the course of six months back and forth back and forth fact in that example we did something interesting we brought the executive team out tio we brought the executive team out to actually walk the value stream with us and the value stream idea was we want you to experience what happens to the product that we make that we get paid for we want you to actually be the product is like undercover ceo kind of be the product that we get paid for so here's what that's gonna look like we're going to start out in the receiving department because that's where all the raw materials come in and we're going to stay there we took the hundred and eighty days to make the tablet down teo one hour tour with the same kind of ratio of time so we're going to start out here were the raw material that we just paid a lot of money for. And we're going to be here until we get pulled into production. That's actually going to be in twenty three minutes so well. Imagine run, having a group of executives and a multi billion dollar companies standing for twenty three minutes in a warehouse, doing nothing because that's, what the materials doing? That's emotional. It's emotional, but it's, factual. This is this is these are the brutal facts. Then we're going to go toe to the lab, because now we're going to go get tested in the lab, because, that's, what happens that mao in the lab for seven minutes? Where do you suppose we want it? After we were in the lab? Back to the warehouse, and we waited some more. This was painful. This was one of the most painful hours they went through, but it haunted them to, so to speak, to the point where we have to make provocative changer, this is this's, eat us up. By the way, when we got to the first value at operation, it looked kind of like this. Okay, we're going to now go through. Ah, department, called compression or not compression yet, but granule ation. This is where they're mixing the powders and things before they pound him into a tablet. So let's, go let's, go through this first value at operation. There it is. And we were back to the warehouse it was that it was like five seconds so on the scale the time scale it was like a five second walk through and it got to the point we went through the lab about five or six times before it was finally done and then when we hung out in the warehouse at the very end until they've it was finally shipped but that relative time really made us appreciate that that which we're getting paid for in this case a vitamin tablets or pharmaceutical tablet of some sort most of the time it's in our possession it is nothing of value has happened into it we need to change that this company's made astonishing gains but it's these tools that really brought it all to life so this is the spaghetti chair what does it look like how much distance we could get this day to right off our process observation chart that we had before another task would be swim lane so let's let's organize this is a great tool so when we have a lot of different functions involves we've got a diamond department you know a requisition department of diamond apartment we can put the customer on here so this is these are the different functional silos turn ninety degrees what is each task of doing? Because now we can step back and we can look at the way this this flow is the has organized and say look at all the handoffs which which are opportunities for fumble so to speak look at all of the look at the time because we could put a time line across the bottom of it any time there's a diamond like this this is a uh yes go this way no go back you know like a review approval so how many times do we go back and forth we can load this up with cycle times weaken but this is the kind of thing where we start to look at if we were going to build one of these out on the on the lanes sigma round one we'd see over one hundred tasks and you'd see this very complicated current state that has no reason to be that complicated but it's it's current state and its its baseline it's the brutal facts I highly recommend it because this is what alliance is what gets people aligned about change once we start to map this stuff out and we start to look at it together think about it this way if we got the diamond department who works in its own building its own separate department we got them together with requisition who's working out in the field we got him together with the quality department it's always been really kind of tough to work with. They reject everything kind of an attitude and you got all these finger pointing at dudes that wow what if we got him altogether in a room for a couple of days or a week and we did it kai's an event we said let's define measure analyze and improve what used a mac this process together and break down some of these walls and a lot of this finger pointing this is the most powerful way to change culture fast that I know it's it's called kaizen let's let's let's get these folks to get its principal number for involve a line enable and empower the team to come up with a better way won't be perfect but it certainly be better and be better lot fast so this is this is a tip a technique to get people aligned by the way we've been customers into these guys and events they got us one lane bring a vendor in or two they get swim lanes wherever there's inner and interaction there's a swim like and let's uh let's let's characterize the current state let's learn about the seven wastes and then the other waste and then let's go after it and it's it's again it's a way to get people focused aligned and highly productive all right there's a swim lane chart just a couple more there's a logical process map this is just another way to display a process using different legends or images or even color sometimes we just use different colors on post its so this is a transport you know, color or symbol and if we've got a process with a hundred steps and twenty of them are transport, by the way. They're twenty nine and the example I gave earlier with the with the vitamin twenty nine different transports, really, that makes sense. So we start to look at that, um, we we would lay out, maybe, with one color, the value add steps. What if we had a hundred steps in the process and only five percent value at? We've represented that with the color. The idea here is to bring the data toe life, make it emotionally compelling, intriguing, and really tell an interesting story. And you can lead all kinds of change when you're armed with these kinds of tools. And you can build all kinds of successful business practices when you know the difference between value had non value added how to lay out something in a in a way that flows. Pereda is one of my favorite tools because peredo simply says look you can't boil the whole ocean all the ones you can't self world hunger world peace all at once so where do we start what do we start with so you know what prado think pie chart for example prado take something and says well let's break it down what are the top three complaints you get from customers top two so you get one hundred complaints in a month no forty percent of them you know are related tio department a or they're a type of complaints things like that another thirty percent our department b let's not waste a lot of time working on this over here well let's start with this start with the top complaints it's just that's where the action is we have safety issues we have people getting hurt well give me the top three reasons were they show me the data it's back to show me the data so with peredo we identify the critical few what are we gonna work on so for example uh say what are the top complaints from the customer let's think about the best way tio display that and peredo is a great way to do that. So with prado where I just identifying the greatest potential for improvement the critical few if you will all right and and displaying it in a way that says here's how we're gonna eat the elephant one bite at a time, trying to take on too much is a sure recipe for for disaster and frustration. Okay, we define the unis, so alright, we've collected all this data. We've mapped it out. We looked at it, sliced and diced it from different ways. What are the top beauties? All right and let's, let's. Remember, it's got to be factual, it's got to be measurable. It can't be an opinion or a on assumption. Think about customer, think about financial. Think about employees challenges. They have time wasted, material wasted. There's, no shortage of of opportunities to find the beauties in any in any business, let's, find those and let's. Remember something that vince lombardi once said, he said, you know what? If you're not keeping score, you just practicing so high performing organizations, just like high performing sports teams. They pay attention to what they pay attention to. Okay. They measure what matters. And we want to make sure that whatever business were in, whatever we set up, that we measure, what matters. And that starts with a customer. And it also starts with the, uh, shareholder, so to speak, with the financial community, the investors got to make sure we pay attention to the to the investors. And and, of course, the associates, the people.

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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