Journey To World Class How Lean Implementations Succeed: Bob Forshay, Transformance Advisors Inc

Journey To World
Class
How LEAN
Implementations
Succeed
Bob Forshay, CPIM, CIRM, CSCP, CLM

Vice President
Transformance Advisors Inc.
CRO@apicsnoco.org
SAPICS 2008 – TITLE; PRESENTER Page 1

Who Am I?
• Transformance Advisors Inc
• CRO – APICS NoCo (Colorado, USA)
• APICS Certification Instructor
• Adjunct Faculty - FRCC
• Metal Fab & Electronics products
– Flow Meters & Custom Engineered prod
• High Tech OEM Program Mgmt
– SAN products
• Proj Mgmt, Mfg Plan, Mining, Retail

Today’s Objective
• Identify key aspects of a successful
world class LEAN initiative
• Understand elements of defining a
Value Stream and Business Case for
LEAN
• The opportunity to evaluate your
progress on the LEAN journey to
world class performance
SAPICS 2008 – How LEAN Implementations Succeed; Bob Forshay, Transformance Advisors Inc. Page 3
World Class - Two Perspectives
• “We Suck Less” from Feld’s blog, Boulder

Colorado, USA
OR
• Continued growth and profitability

over time with exceptional value for
stakeholders winning in a globally
competitive market
The World Class Imperative
75%
Market
Business Supply
Chain Leadershi
Profit Higher
Strategy Capabilities p
Advantage
Profits
*
Total Supply Chain Management Cost Best

15.0 Avg
13.1
12.2
11.3 11.5
10.9
10.3
10.0
% Revenue
7.1 6.7 7.0

6.1 6.5
5.8
5.0
0.0
C omputers Industrial Telecom C hemicals Packaged Overall
Goods
*Supply Chain Management Review, Survey of 110 companies in five sectors
The Lean Journey
Lean
Current
Supply
Position 5 Principles of Lean Chain
Developing leadership skills through

Seek
education, application, and coaching Perfection
Leverage
Pull
Create
Identify Flow
Value
Specify Streams
Value Systematic elimination of WASTE!
Case Study
• Looking back on 30+ years of learning
• Micro Motion Inc, Div. Emerson Electric
• APICS NoCo Chapter
• Transformance Advisors Inc.
©2003. Micro Motion, Inc. All rights reserved.
SS Fab & Electronic Processors
©2003. Micro Motion, Inc. All rights reserved.
Case Study
Before Now
• 55% On Time Del • 98% On Time Del

• 6-16 Wks Lead time • 4 Hrs Lead Time
• >20% Rework/Scrap • <1% Rework/Scrap
• Growth constrained • Unbound WW Growth
• 1.1 Inventory Turns • XX+ Inventory Turns
• No Competition • 14 Competitors
• Exceptional Quality • Exceptional Quality
• Slow Serv Response • Quick Serv Response
• $.25M – 1977 • $500M – 2008
• Expediting Skill • Employee Involvement
30 Yr Growth History
Sales
500.00
2008 Projecting $500M
400.00
$Million
300.00
200.00
1987 $39 M
100.00 1977 $.25M
0.00
1977 1979 1981 1984 1994 2000 2008
Year
Leadership Comes First
• Jim Collins, ‘Good To Great’ author;
– ‘You need executives, on the one hand,
who will argue and debate, sometimes
violently – in pursuit of the best answers,
– yet on the other hand, who unify fully

behind a decision, regardless of parochial
interests.’
Silos = Not Well Integrated,
Lack Cross Functional Leadership
Competing departmental
goals
Chaos
reigns
Unhappy
customers
Defining Value – Best Practices
Accounting
Add Cost = Value
Manufacturing & Supply
Chain Management
Remove Cost = Value
Our View of Value
Value Added: Activities necessary for meeting

customer requirements.
Business Value Added: Activities not involved

with meeting customer requirements, but are
necessary.
Non Value Added: Activities not necessary for

meeting customer requirements.
Three Approaches
VA BVA NVA
Current State
VA BVA NVA
Typical First Action - Hammer on Direct Labor
VA BVA NVA
LEAN = Eliminate Waste in Non-value Added Activities
Total Cost
Seven Steps To Success
1. Select the value stream
2. Document the current state
3. Map the current state
4. Identify and prioritize changes
5. Craft the future state
6. Time phased implementation
7. Continuous process improvement
1. Select the value stream
Value Stream:
Prepared By: Value Stream

Date: Definition Form
A. Select a value Value Stream Start:
Value Stream End:
stream Scope:
Owner/Manager:
B. Assemble team Participants:
C. Value stream Customers:
definition
Outputs:
Suppliers:
D.Define value as Inputs:
best you can Value*:
*Defined by the customer.
2. Document the current state
Conduct an upstream walk of the value stream.
Observe and document:
 Cycle times (people, equipment, and software)
 Changeover times
 Resource availability
 Available time
 Inventory queues
 Batch sizes
 Number of operators
 Package or container sizes
 Scrap rates
 Variations
3. Map the current state
Planning Scheduling Supervisor Customer

Service
Process: Process: Process: Process:

Operators: Operators: Operators: Operators:
Output: Output: Output: Output:
Value Added Time: Value Added Time: Value Added Time: Value Added Time:
Cycle Time: Cycle Time: Cycle Time: Cycle Time:
Value Added Ratio: Value Added Ratio: Value Added Ratio: Value Added Ratio:
Changeover Time: Changeover Time: Changeover Time: Changeover Time:
Inventory Comments: Inventory Comments: Inventory Comments: Inventory Comments: Inventory
XXX units
per week
Time
Capture the Right Information
the details that happen between inventory
Process:
Operators:
Inputs Outputs
Output:
Value Added Time:
Cycle Time:
Value Added Ratio:
Changeover Time:
Priorities:
Inventory Comments: Inventory
Step 3 Using Flow Charting
Information
Materials/Products/Services
Funds
Product/Materials Returns
4. Identify and prioritize changes
 Take the quick fixes ASAP!
 Dream about perfection
 Education on the appropriate best practices
 Gain an understanding of technology enablers
 Determine the organization’s ability to change
5. Craft Future State
What would
‘Ideal’ look
like?
6. Implementation
Time phased
Implementation plan
7. Seek Perfection
Continuous
Process
Improvemen
t
Over and Over again

Business Case Outline
the business case provides key decision makers with a compelling
reason and supporting data to make an informed decision
A. Current Situation E. Benefits/Objectives

B. Trends/Best Practices F. Cost/Resources
C. Statement of Need G. Justification
D. Scope H. Success Factors
+ Executive Summary of the above with an

emphasis on the benefits and costs.
Strategic Alignment
Predictable
Performance Strategic
Objectives
Supply Chain
Initiatives
Implementation Tactics
Most Important Key
Lean Management System
• Leader Standard Work (focus)
– Effectively links vision with execution
• Daily Accountability Processes
– Dashboard of accomplishment
• Visual Controls
– Tracking actual vs. plan, ties to daily plan
• Discipline & Diligence
– To execute as designed and intended
Behavior Drivers
Non-Lean Lean
• Self paced • Process paced
• “leave me alone” • “work as part of
• Do whatever it takes, team”
“I know who I can • Defined process for
depend on in a most everything,
pinch” “we follow process”
• Improvement is • Improvement is job
someone else’s job, of everyone, take
not my responsibility personal initiative
• Managed by pay or • Managed by perform
bonus system to expectations
Obstacles to Overcome
• Jim Womack, LEI, Lean Enterprise
Institute – Top Obstacle =
• Middle Management is obstruction
– Lack of leadership focus driving change
– Not motivated properly – fear of change
– Compensation not tied to proper metrics
– Lack of charter to become change agent
– Reluctance to empower people
– Culture, Ego, organizational inertia
Failure Symptoms
• Lack of visible progress early on
• Too long for team to embrace change
• Lack of visible cheerleader – leader
• Too many ‘Concrete Heads’ left in place
• Not dealing with obstacles early
• Deliberate stonewalling
• Trying to change too much too quickly
Plant GM as Change Agent
• Personal interaction daily with factory
• Communication on firm’s performance
• No complacency allowed
• Time allowed to learn, experiment
• Training for management and labor
• CPI as way of life – ‘from now on’
Training - Case Study
$10000/emp
•All New Hires – Focused skills

Lean
•More non-Manufacturing roles
•Integrating WW Operations Ninja
and Supply Chain elements
•2004 = Director Global Lean BIP
Enterprise hired
•12 World Wide Lean Business CIP
Process Managers, 1 FT
Problem Solving
$1000/emp
1988 2008
Learning to Change
• Group/Team Training
– All employees
• Culture - from Dictate
to Delegate/Coach
From:
To:
Learning To Change
Biz Imp Proc
Design of Experiment
Cont Imp Proc & Statistical Proc

Control
LEAN Success
• Decisions enabled at lower levels
• Involved employees
• Communication and more
– Company WINs & performance
• Breakdown silos
• Continuous pursuit of perfection
– Never satisfied
– Way of life every day, all employees
Motivation – Case Study
• Business Improvement Program
• 1st year
– 244 ideas submitted, 123 evaluated
– 37 implemented for $798,000 savings
– $2325 Cash awards first cycle
• 2007
– ~150 ideas implemented annually
– Annual CIP Fair – Celebration of
ideas/gains
Examples of Gains
• Standard work procedures documented
• SPC charting established process control
• Inventory record accuracy doubled – on-
going
• BOM inaccuracy issues eliminated
• Dramatically improved 1st Pass Yield
• Through-put increased by over 50%
• Average OTD = >80% improved within 1st
year
• Internal schedule performance dramatically
improved
Uncover and Eliminate Waste
Kaizen Blitz teams require

skills that most companies
(and schools) don’t normally
teach employees.
Working Problem
Together Solving Tools
7 Types of Waste
Includes
management-decision making
Poor Processing
Defects Over
Production
7 types
of waste
Waiting Inventory
Movement Motion
Root Cause Analysis
5
Whys? Occurrence
Attribute
Data Drives Change – Remove Emotion

Reducing Variability
Plan Do Check Act
Histogram – Sample Grades
How Many
Patterns?
Control Charts
UCL
Process Measurement
LCL
Time
Inaccuracy is Cumulative
Master Bill of
Forecast Inventory Resources
Schedule Materials
80% 95% 85% 95% 90%
.80 X .95 X .85 X .95 X .90 = 55%
Evaluate – Assessment
1. Standard Work defined
2. Visual Controls
3. Daily Accountability
4. Process Definition
5. Disciplined Adherence to process
6. Root Cause Problem Solving
7. Process Improvement On-Going
Assessment
1. Pre-Implementation
 Structured plan, funded and resourced
2. Beginning Implementation
 Awareness, Education Plan in play
3. Recognizable Gains
 Daily accountability
4. Systems Stabilizing
5. Sustainable System
 Improvement becomes routine
Summary Review
• Identify key aspects of a successful
LEAN initiative – Lean Leadership
Management
• Understand elements of defining a
Value Stream and Business Case for
LEAN
• Evaluate your progress and
commitment to the LEAN journey to
world class performance
Appendix
• Sample Business Case
• Sample Assessment
• Available on www.apicsnoco.org -
see links to CLM (Certified Lean
Master) project examples
Bibliography
• Certified Lean Master program - ISCEA
– APICS NoCo www.apicsnoco.org
– Transformance Advisors Inc, Mike Loughrin, Bob
Forshay, Mark Lindberg, Mike Sheahan
www.transformanceadvisors.com
• ‘Creating A Lean Culture – Tools to Sustain
Lean Conversions’ by David Mann
• Lean Transformation by Bruce A. Henderson &
Jorge L. Larco
End of Presentation
Beginning of the LEAN Journey
Bob Forshay, CPIM, CIRM, CSCP, CLM
Vice President
Transformance Advisors Inc.

bforshay@emailta.com & CRO@apicsnoco.org
720-244-0579
Skype: bobf4553 (Bob Forshay)

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Journey To World

Bob Forshay, CPIM, CIRM, CSCP, CLM

SAPICS 2008 – TITLE; PRESENTER Page 1

SAPICS 2008 – TITLE; PRESENTER Page 2

• “We Suck Less” from Feld’s blog, Boulder

• Continued growth and profitability

Total Supply Chain Management Cost Best

7.1 6.7 7.0

Developing leadership skills through

©2003. Micro Motion, Inc. All rights reserved.

©2003. Micro Motion, Inc. All rights reserved.

• 55% On Time Del • 98% On Time Del

– yet on the other hand, who unify fully

Value Added: Activities necessary for meeting

Business Value Added: Activities not involved

Non Value Added: Activities not necessary for

Prepared By: Value Stream

Value Stream End:

B. Assemble team Participants:

C. Value stream Customers:

D.Define value as Inputs:

best you can Value*:

*Defined by the customer.

Planning Scheduling Supervisor Customer

Process: Process: Process: Process:

Over and Over again

A. Current Situation E. Benefits/Objectives

+ Executive Summary of the above with an

•All New Hires – Focused skills

Biz Imp Proc

Cont Imp Proc & Statistical Proc

Kaizen Blitz teams require

Data Drives Change – Remove Emotion

80% 95% 85% 95% 90%

.80 X .95 X .85 X .95 X .90 = 55%

Transformance Advisors Inc.

SAPICS 2008 – TITLE; PRESENTER Page 61

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