Lean Transformations Group

How to Find a Business Performance Problem Before It Happens

For the last 20 years I have been teaching teams at organizations large and small to use the information they generate (good or bad, especially “bad”) as feedback to improve their processes. It’s harder than you might think.

In manufacturing and service, here are some examples of information gold mines of useful information that too often get ignored:

  • Warrantied products returned by customers that are sitting on the shelf waiting for analysis
  • Paperwork (Applications, orders, invoices, documentation, records, etc..) with missing, incomplete, or wrong information
  • Drawing defects found and corrected by designers / engineers
  • Parts, supplies, paperwork, documentation, orders, assemblies, schedules, etc. that get reworked
  • Customer calls coming into call centers (more rework of broken processes)
  • Everything that’s in the scrap bin
  • Employees who leave
  • Customers who leave

The list goes on.

Learning to see a defect as “abnormal” (thus requiring continuous improvement or Kaizen), developing methods that detect defects as close to the problem as possible, and having a person on the team who is responsible for the defect (who is treated with respect)—these are all ways to start working with these sources of precious information that will make your work processes stronger. They also happen to be some of the most important attributes of a true “lean thinking” organization, whatever your sector. (By respect in this context, I mean respecting a person’s ability to solve the problem and giving them the responsibility to run experiments to solve the problem effectively.)

Here’s an example.

It was three years into my own lean learning journey, and I was starting to feel pretty proud about my understanding of lean thinking and methodologies. Around this time, I was also invited to visit the Denso alternator and fuel injector plant in Tennessee (Denso is a global automotive components manufacturer headquartered in Japan). While touring the shop floor, we stopped to look at a machine that was producing a small part, a simple bushing for the alternator line. As the parts dropped off, they went into a second machine that 100% inspected the parts for three critical dimensions: length, outside diameter, and inside diameter. From my understanding, this was definitely not “lean”, so I asked my guides from purchasing and plant management to explain why 100% checking was even acceptable.

I was totally thinking I had arrived at a “Gotcha!” moment! The response that followed was so revealing that it forced me to reevaluate many of the assumptions I had for myself as a leader.

First, my guides acknowledged that this was an interesting question. This made me feel respected. Then they let me know that there was a process owner for the operation—although it had been running unattended at the time—and that they would defer to the person who owned the process. In short order, the process owner (let’s call him Sam) came over to the machine and asked me to repeat my question. Sam also said, “That’s an interesting question,” and told me he would explain.

Sam reached into a drawer close to the machine and removed a 2-inch thick notebook. “10 years ago, the process had many problems,” he said. “There were many, many defective parts every day, so we added the machine to check parts and stop the process when a defect was found.” Sam continued, “We needed to see how and why the process made bad parts.” Next, walking me through several A-3 problem solving documents in the same notebook, he said, “Kaizen, Kaizen, Kaizen.” A few pages later and now it was only a few bad parts per month. Again, more Kaizen. Then it was only a few bad parts per quarter and so on. Then he arrived at their current state: No bad parts for last two years.

“Please understand. The machine’s purpose is not to sort out bad parts,” Sam said. “Its purpose is to stop the process right away so that we can see cause of defect and improve the process!”

Time and time again, Lean has taught me to be humble! Here was a team that knew how to work with the information it generated.

I had a lot to think about at my hotel that night…

  • How many places did my own organization sort, rework, or discard parts? (A lot).
  • How many times did we really see this as an opportunity to improve our process? (Not often. Sure, we did corrective action reports and root cause analysis when it got really bad, but not with the mind of true continuous improvement).

Then more questions occurred to me…

  • Do we show respect for people who question the way we do something?
  • Do we also show genuine respect for the process owner and let them answer questions about their process?
  • For every process owner, how many other processes does this person also manage?
  • What level of defect does our organization just totally ignore?

My head was ready to explode thinking of all of the opportunities for improvement in my own organization that as leaders, we were essentially choosing to ignore as well as the opportunities for new learning and knowledge that we were just letting slip by. The focus of process ownership and the drive this gives the entire team—both of these things were missing in our current organizational structure.

20 years later and I realize now as I realized then, these are fairly simple concepts, too…

  • “Pass no defect forward.”
  • “Detect defects as close as possible (time and location) to where they happen.”
  • “Create ownership so that someone does something when a defect is found.” (both in terms of short-term containment and corrective action and in the long-term to address root cause)

Building an entire team of people who have the will to live by these concepts every day, however, is hard work. This requires team members to transform many of their basic assumptions about how work gets done and how things actually improve, especially leaders. When I returned home, I knew I needed to change as well.

What did I do as first steps to transform my own organization?

First, we moved quality checks to be time-based, not quantity-based for production. Every hour, every process would have a quality check by both the operator and an inspector. The inspector came to observe the process and if a problem was found, team members would immediately work on short-term and long-term corrective action processes. Each process also had a process owner who would be notified of an abnormality. This person owned coordinating and documenting the problem solving. In engineering, we created better and more frequent quality and process checks which then triggered problem solving on the tooling design processes. Most importantly, I changed my own thinking as a leader about what I accepted as normal, including how I wanted to engage the workforce to create a sense of pride in process ownership.

If all of this feels like too big a jump from the current thinking going on at your organization, talk to us at Lean Transformations Group. Maybe we can help you get started. We enjoy helping teams learn how to work with gold mines of valuable information that are available to them in their organizations upon closer inspection. And even the best teams need a good coach.

Significantly improving your
operational performance.

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