Run a Better, Faster, Leaner Business

 

Run a Better, Faster, Leaner Business

 

Lesson Info

Summarizing Your Current State

Then we summarized the current state said all right well here's where we are today terms a market you're a couple of sound bites process flow couple of sound bites here's our map here's are here our maps plural here's what organization looks like touchpoints summon your client facing touch points how many how many people is the client got to deal with because a lot of times clients will complain about that 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 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 decommission so it...

just keeps getting more and more and more complicated so alright summary of our financial state so and this is where we then sorry what are the critical you tease and what are the brutal facts 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 they're there bring him out and incidentally when you bring brutal facts 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 I don't I put together a story of the brutal facts to my boss, okay to help with the, uh, shake things up a little bit, they have to be facts though we call these sometimes in business the ugly babies reason we call it that is because if you tell somebody their baby is ugly, you know what kind of reaction you're going to get, you know, you got two problems if you got the original one now you got an emotional warfare going on treat the brutal facts like they're ugly baby, so to speak, meaning you don't call anyone's baby ugly, you don't express opinion or judgment, you simply reveal the data. So did you know we take one hundred and eighty two days and to make a vitamin tablets by the way we cover about fourteen point two miles to do that? Did you know that that's shocking that can't be right? We'll hear the fax so we use this baseline process to bring up the brutal fax to motivate change where people draw their own conclusions from the data we don't we don't tell him I always say it's kind of like sands reporting live from san francisco here are the brutal facts I'm not expressing an opinion I'm not calling anyone's baby other you can conclude that uh we took fourteen and a half minutes to deliver to good units out of sixteen delivered to our client that's a fact and I'm not calling it ugly I'm akani problem that we have a lot of times is we don't think that way and we confuse opinion with fact we started expressing opinion you know I think this is a stupid way to run the business I think this is uh this is all wrong this is this this should be different translation you call my baby ugly you call my department ugly you've told my company but ugly called me ugly that's the translation a lot of times when we're not clever 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 so the value street map said I 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. All right. Uh, expectations. Diamonds, red, yellow. You could 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 can 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 to diet somebody's good at diamonds and we're going to need somebody's gonna have to put down some red dots. We probably ought to do it in process check, because if it's not right, we don't want to keep going so let's, do it in process check 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 going 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've got something to work on and then that same department requisition susan you might actually be coordinating with supply what happens when you run out of dodge but you gotta order you gotta 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 small business all right so we draw 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 is this is where 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 uh 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 to uh draw two diamonds do we know let's? Measure it how long's it take us tio stick the red dot down inside the diamonds. All right, we can measure that that'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 the yellow dots are the red dots is usually it's in the neighbourhood of six to eight. Second is to do two dots on a sheet review. This is per sheet not per batch per sheet to review it takes under five seconds and sign off typically yellow dots somewhere 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 way approve. It takes, uh, assuming it's. Good. That takes about five seconds. And then, uh, we've got unstable. It that's non value added, but we still have to do it. 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 gotta check the box. Sign the name. Okay on. Um, 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 sheet 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 to do. 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 uh manage and everybody is kind of like going free because all they hear is what the customer's mad at us because we're behind so something something's crazy but this inventory is all a former waste it's clogging things up here's something into you seen 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 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 had open road it's gonna take longer isn't it would take a lot longer so all of a sudden now we've got oh my we've got big traffic jams we gotta we gotta for ah eighteen wheeler appeared it's flipped over 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, uh, leadership teams or investors to agree to the change mathis and to put this critical data and if you're the leader to convince yourself and t give yourself something to eat sure could be and if you want to start a new business and you write all about 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 so I'm just going to throw the idea 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 in 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 that nothingness so we pull one in tow into production you know 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 mapping alak along the bottom they're not come back to the time value map unjust law all that 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 or a landscape so the time analysis team which I tapped in the very first segment session one was if we had you know if you 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 elder time studies we'll time the diamond department how long it takes get some data well time uh the sheet from start to finish all the way through and we'll get times on each of the value and 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, um 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 app. This example here is one hundred eighty days to do 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 this stuffs non value add but once again most of the opportunity is where nothing this so be careful with that, you know I run into it a lot. I don't 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 fourth on you're splitting hairs, get out of the weeds and 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, alright 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 s o step one what what step one and you might come back to me and say well you step one is ah check a box all right is that value added or non 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 went we talked to the customers said you know that little box that susan had a check at the beginning is that is that like critical two qualities that critical too and you might hear me say what box I don't know what about that that 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 do you need that no you don't I don't know 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 your stabling it and then unstable in it I don't that's this replicating the batch I don't I don't I don't need a staple a matter of fact I wanted to talk teo er little bit about those little holes from the 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 line that's value added than what I just the ruler oh just ruler non value at next draw 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 it and then after that you're flipping the page flipping the pages in 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 were not aware and we can measure distance if there's distance traveled actual task or cycle time okay if there's anything in queue 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 tool, we can map it, weaken, analyze it. We can really gain intelligence from it. So simple step is attach yourself to the delivery ble, whatever it is 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 sharp physical process map. We would use this to shoot to simply display the fact that we take fourteen miles teo, make a vitamin tablet. What in and out of warehouses over the course of six months. Uh, back and forth, back and forth fact, in that example, we did something interesting. We brought the executive team out, tio uh, 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 it, 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 a 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 imagine, uh, having a group of executives in a multi billion dollar company standing for twenty three minutes in a warehouse doing nothing because that's what the material is doing that's emotional it's emotional but it's factual oh, 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 my were in the lab for seven minutes? Where do you suppose we went 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's 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 now go through ah uh 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 uh 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 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 tablet or a pharmaceutical tablet of some sort most of the time it's in our possession is nothing of value is happening toe 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 start 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 involved we 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 handoff uh, 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 we can, 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, uh on the lean 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 its current state it's the it's, the 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 that's always been really kind of tough to work with they reject everything kind of an attitude and you got all these finger point in attitudes that uh wow what if we got them all together in a room for a couple of days or a week and we did it guys an event we said let's define measure, analyze and improve what used to make this process together um 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 kaisa let's get these folks together principle number for involve online 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 got swim lanes wherever there's inner and interaction there's a swim lee 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 a 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 just use different colors on posters 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 vitamin twenty nine different transports really that makes sense way start to look at that way would lay out maybe with one color the value add steps. What if we had one 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 and treating 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 enough 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 solve world hunger world peace all at once so where do we start what do we start with so you know what? Um 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 a hundred complaints in a month? Well, forty percent of you know are related tio department a or they're a type of complaints things like that another thirty percent department b let's not waste a lot of time working on this over here well let's start with us. Start with the top complaints it's just it's where the action is we have safety issues we have at people getting hurt. Well give me the top three reasons what 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 parade it was 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 uh 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 all right we've collected all this data we've mapped it out we looked at it and sliced and diced it from different ways um what are the top beauties all right and that's that let's remember it's got to be factual it's got to be measurable can be an opinion or a uh assumption think about customer think about financial think about employees challenges they have um time wasted material wasted there's no shortage of of opportunities to find the udi's in any in any business let's find those and let's remember something that uh vince lombardi once said he said you know what if you're not keeping score just practicing so high performing organizations just like high performing sports teams um they pay attention to what they pay attention to okay uh 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.