Carlo Scodanibio - The Lean Enterpriise - Lean Thinking (Ltpre-1267735672145-Phpapp01)

Carlo Scodanibbio presents:
The Lean Enterprise

(Lean Thinking)
if it doesn't add value, it is waste
Lean Thinking is lean because it provides a way
to do more with less while coming closer to
providing customers with exactly what they want.
a training event organised by:
question
Which is the primary objective of your Organisation?
(one and one only)
Key-Words: lean, manufacturing, power, point, presentation, value, waste, client, service, industry, perform, performance, world, class,
operations, adding, management, productive, process, flow, processing, production, 5S, creativity, people, method, kaizen, improvement, hr,
human, resources, strategy, strategies, tei, employee, involvement, responsibilities, course, carlo, scodanibbio, thinking, enterprise, stream, map,
mapping, spaghetti, diagram, 5why, 5w1h, communication, circle, tool, project, construction, planning, last, planner, ppc, toc, quality, total, poka,
yoke, poka-yoke, excellence, pull
write it down on a piece of paper (1 minute)
Airlines...
THE STORY
STORY
the fax!!
Banks...
Car Hire...
5* Hotel...
Customer
Care...
4
LEAN THINKING: THE ORIGIN 1

Maybe you fish it
it..

maybe you farm it
it..

maybe you mine it
it..

maybe you breed it
it..

maybe you mill it
it..

maybe you brew it
it..

maybe you manufacture it
it..

maybe you construct it
it..

maybe you simply sell it
it..

or maybe you dance it
it..

You catch it, you farm it,
you mine it, you breed it,
you mill it, you brew it,
you manufacture it, you
construct it, you simply
sell it or you dance it
no matter what you do - you must generate.
VALUE
for your customers
10

Everyone that works in your organization is doing one of three things:
things:
1. They are generating value for your customers - or

2. They are creating or reshuffling waste or
3. They are doing absolutely nothing
The market leaders will always

have the majority of their people
dedicated to the first of these
in an office (or a bank, or a travel agent, or
or.) the floor
cleaner may be adding more value than most employees..
.so, you would like your enterprise to be:
??????
modern
really satisfying clients and employees
guaranteed in its future

financially sound
????
profitable
productive
efficient
11
.so, you would like your enterprise to be:
Efficient Profitable Modern

Productive Financially sound satisfying clients and employees
Guaranteed in its future
???? - ????? - ?????????????
..in a nutshell: you would like your enterprise to
perform
12
This is possible: it can be achieved
.it depends on you,

entrepreneurs and managers..
..its just your choice..

But:
there are 3 necessary steps
.you would like your enterprise to be: Efficient Profitable Modern

Productive Financially sound Capable of really satisfying clients and
employees Guaranteed in its future ???? - ????? - ?????????
THE 3 NECESSARY STEPS
1) Understand the environmental

change and manage it
2) Be prepared to abandon the
formula
3) Have a clear direction and tell
people about it.
4) .and something more
more..
13
STEP 1)
Understand the environmental
.the world has changed.
14
COMPLEXITY
clients are monsters.
15
STEP 2)
Be prepared to abandon the
formula
the formula:
the Campari syndrome
16
the formula
The secrets of success
The dos and donts
The taboo and holy cows
The how to do things
The areas of influence
The who and what is to be respected
The institutionalised values and principles
The rules
The policies
The procedures
The descriptions (jobs, tasks..)
..
the formula
EMPHASIS
On 3 key departments:
DESIGN/ENGINEERING
TECHNOLOGY/OPERATIONS
MARKETING/SALES
Emphasis on Structure, Organisation, Hierarchy,
Departments & Compartments
Emphasis on Control (the Controller..)
Emphasis on Efficiency
Emphasis on Stability
17
protect the formula!

The Formula must be protected, because it has
generated success for many years:
-- > resistance to change!

Protection = Vertical Control
preserve its integrity!

the GUARDIANS function:
Vetting/Approving amendments to the
formula or to its main parameters
18
effects of the formula

Top and mid level managers, with time, get used to the
Formula, and learn how to stick to it.
At lower levels (supervisors, shop-floor workers),
unwritten, similar rules filter down and become
applied.
Flexibility
Reactivity little.. (or none)
Innovation
The Enterprise becomes closed
People become static
the formula (after midnight)

If some indicators start showing signals of serious
inadequacy of the Formula all that may happen is a
reshuffle of the old status-quo:
Cost-cutting exercises
Increase in efficiency of less

powerful department/areas
And/or: technological revamping
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the obsession to change

(the formula
formula))
The Formula is blocked, and the whole

Organisation is slow and reluctant to learn
If signals show very poor performance,

the need to restructure the Formula and to
change may become an obsession
BUT: in the end things remain the same.....
20
homework?
..oh, yes!!!
spot the formula
21
STEP 3)
Have a clear direction in your
mind.. (and tell people about it
it.)
the vision
22
TELL YOUR PEOPLE ABOUT THE
LEAN DIRECTION
BUT!! before doing so, some check-points:
is the vision shared at top/middle level?
is everybody in your enterprise - at
top/middle level - convinced that people make
the difference between failure and success?
is the integration concept clear and
understood at top/middle level?
This is a pass the Rubicon

Rubicon situation
there is no come back it must go
right. So, make your checks before!
23
world-class,
lean
performance
performance management
performance management
4 necessary steps
1 - MEASURE PERFORMANCE
2 IDENTIFY THE GAP
3 - SET PATH TO IMPROVEMENT
4 - MAKE IT HAPPEN
24
Step 1
HOW TO MEASURE
PERFORMANCE
..know where you stand!!!
..know where you are!!!
Enterprise Performance
25
THE MAIN COMPONENTS OF

ENTERPRISES PERFORMANCE
examples
(KEY PERFORMANCE COMPONENTS KPC)
COMMERCIAL PERFORMANCE
Market penetration Market share/expansion
Effectiveness of Marketing Activities
Sales Force Effectiveness
Customer Loyalty
Rate of Acquisition of New Customers
Dealers/Wholesalers Performance
Brand Identity Level
Communication Effectiveness
Reputation Image

examples
OPERATIONAL PERFORMANCE
Operational Efficiency (Labour, Machines, Materials, Indirect Areas)
Areas)
Economical Efficiency (Labour, Materials
Materials..)
Productivity
Quality of Product and Service
Value Added
Plant/Equipment Performance
Personnel Performance
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examples
ECONOMICAL PERFORMANCE
Turnover
Profitability
CULTURAL PERFORMANCE
Industrial Culture Level/Modernity
Effectiveness of Change Management

Rather than to Functions and

Departments, Performance
Components should preferably be
attached to Processes and subProcesses
n t!
o r ta
p
y im
ve r
27

examples
(PROCESS PERFORMANCE INDICATORS)
Product Development Process Achievement

Achievement factor
AfterAfter-Sales Service Process Speed of Intervention
Intervention factor
Invoicing Process Correctness
Correctness factor
.and, for instance
Goods Returned Management Process Functionality

Functionality factor

All significant Performance

Components (KPC) should be
measured adequately
If feasible, significant and practical, a
Key Performance Indicator (KPI)
KPI
should be associated with a KPC to
monitor it
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MEASURING QUANTIFIABLE PERFORMANCE COMPONENTS
Certain Performance Components may

be mathematically measured
MEASURING UNUN-QUANTIFIABLE PERFORMANCE COMPONENTS
Any (apparently) un-measurable

Performance Component may actually be
measured with the aid of suitable
Questionnaires and Scoring Methods
MEASURING UNUN-QUANTIFIABLE PERFORMANCE COMPONENTS

examples
COMPANY CLIMATE QUESTIONNAIRE

PARAMETERS
interest in own work

physical
physical work environment
work flow and fluidity
fluidity
work information
interinter-functional relationships
interinter-personal relationships
relationships with Management
Company (internal) Image
29
COMPANY CLIMATE QUESTIONNAIRE
Year 2007
Year 2008
INDEXING METHODS
Indices - Indicators - Ratios
useful to understand and to monitor Performance

Components behaviour and trends
useful on their own and even more when put in
relationship the one to the other
possible to create an Index representing the
overall behaviour of a number of Indices
even possible to create an overall
Enterprise Performance Index
30
SOME EXAMPLES OF COMMERCIAL INDICES

Ims = Market Share Index = 100 x Sales ($)/Overall Market Value ($)
Inc = New Clients Index = 100 x number of new clients/total
number of clients
Ilc = Lost Clients Index = 100 x number of lost clients/total
number of clients
Ici = Clients Increment Index = 100 x (number of year end clients
number of year start clients)/number of year start clients
Iasc = Average Sales per Client Index = sales (quantity or $)/total
number of client
Icpc = Commercialisation of Productive Capacity Index = 100 x sales
(quantity)/productive capacity (quantity)
SOME EXAMPLES OF OTHER INDICES
Isr = Stock Rotation Index = sales (at cost)/average stock (at cost)
cost)
Ise = Sales per Employee Index = total sales (turnover)/total number

number of
employees
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GRAPHIC REPRESENTATION OF PERFORMANCE

COMPONENTS
examples

COMPONENTS
examples
32

COMPONENTS
example: Radar Chart
why enterprises dont perform...

.the root causes of poor performance date
back to over 2 centuries ago
ago..
.we have gone into the

21st century, with
enterprises designed in the
18th and 19th centuries to
perform well in the 20th..
33
Why do all traditional Management

techniques and disciplines somehow fail?
Management by Objectives, Effective Leadership, Diversification,
Z Theory, Situational Leadership, Effective Communication, Zerobased-Budgeting, Decentralisation, Team Building, Management
by Exception, Dale Carnegie techniques, Interpersonal Skills,
Quality Circles, Excellence, Restructuring, Portfolio Management,
Interactive Management, Matrix Organisational Structure, Total
Quality Management, ISO 9000..... and One-Minute Managing......
Why is communication so difficult in

many traditional enterprises?
Why is real, non-spurious improvement so
difficult to achieve in many enterprises?
Why functioning well is so awkward in
many traditional enterprises?
Why do enterprises struggle both when they
expand and when they are compelled to
shrink?
..we have to look at organisational structures
34
ORGANISATIONAL
STRUCTURES
..that support an effective
Employee Involvement scheme
and allow higher levels of
Performance
ORGANISATIONAL STRATEGIES
35
REAL ENTITIES
effective Human Resources

Management Strategies
36
effective Human Resources

Management Strategies
EFFECTIVE HR MANAGEMENT STRATEGIES
37
38
39
...the worst thing that could possibly

happen to an enterprise and its employees
is the adoption of an ineffective H R
Management strategy......
40
EXAMPLES OF MIS-MATCH
E2
M2
E1
M1
homework?
..oh, yes!!!
understand your organisational strategies
41
SCANNING AN ORGANISATIONAL STRUCTURE

area: cultural values
typical of the "technology" era with a strong "Tayloristic belief
Credo: "...products and/or technology make business..."
Competitiveness = costs reduction
typical of the "marketing" era
Motto: Max exploitation of the Market
Logics: Max yearly results (economic - short/medium term strategy)
Credo: Business is made exploiting opportunities
typical of the "quality challenge" era
Motto: Client's satisfaction ("....client is the king...")
Logics: Long-term strategy based on the Total Quality approach
Credo: Business is made improving continuously and systematically the whole productive
process in a "client-driven" mode
typical of the "World-Class" era
Motto: Total Satisfaction (client, employees, shareholders, suppliers.....)
Logics: Long-term strategy based on the VAM (Value Adding Management) philosophy (and the
"value-chain" concept of M. E. Porter: "..be in the right chain with valid/competitive
partners..")
Credo: Business is made by increasing continuously and systematically the overall value of the
vendor-vendee system and by consistent innovation
42

area: relationship with market
Market: unsaturated (demand > offer) and "stable"
Market's needs: established by "technologists", who decide on validity and "value" of products
Products are literally "thrown" into the market (PRODUCT-OUT)
Market: saturated (offer > demand) - consumer - not "mature" - somewhat unstable fierce Competition
Marketing force/abilities indispensable to locate opportunities and generate new needs in the market
Sales force/abilities indispensable to enhance competitiveness
Products developed (functional specs ---> technical specs ---> industrial/manufacturing specs) by locating
market needs (PRODUCT-IN)
Market: saturated (offer > demand) - somewhat less consumer - "mature" (capable of
understanding and rewarding quality) - unstable/turbulent
Market's needs: already established (by western industries) - product lines are well defined
(cars, consumer electronics.....)
Extensive use of QFD (Quality Function Deployment) techniques for effective/fast product development
Market sets productive parameters (quality, delivery, cost) - "...the ocean pulls the river..."
Market: rich (opulent) - very mature - featuring complexity and economic turbulence - very
high competition - rapidly changing
Market's needs: extremely personalised (mass-production coma ?)
Extrapolation/exasperation of the "market sets productive parameters" concept -----> "market sets
business parameters"

area: relationship with clients
Client is an entity that buys our products (and sometimes gives us a
lot of hassles...)
We do not know much about our Clients (we are mainly concerned with
their liquidity...)
Client can and must be known more/well
Client can be persuaded to buy our products - we have marketing and
sales dept./s that take care of that.....
Client is King and Clients satisfaction is top priority
Clients needs and expectations (explicit and implied) must be fulfilled
Exasperation of the Client is King concept --- > ..Client is our
Partner in business....
43

area: organisation & management
"Mechanical" (Scientific) system
Organisation structured in great details, and generally "static"
Decision-making process: top-down
Max attention to efficiency
Professionalism: specialised ("technical" positions are the most essential and rewarded)
Work: fragmented
Management: specialised, "per function", bureaucratic
Budget = basic tool. Great attention to "real/estimated" comparisons/analysis and to "deltas"
Max control (inspection, supervision)
Max cost control (per "cost centre")
"Mechanical" (Scientific) system
Organisation structured in great details, but somewhat dynamic
Same organisational principles as in model (A), with new, predominant functions
(Sales, Marketing), and a new predominant position: the "Controller"
Decision-making process: top-down
Inter-functional management (featuring meetings, committees, inter-functional project teams....)
MBO - Management by Objectives
Very sophisticated budgeting/control system (with EDP/IT aid)

area: organisation & management
"Organic" system
From "product" culture (models A and B) to "process" culture and organisation
"Macro" organisation, process-related to main productive parameters: quality - delivery cost
"Micro" organisation, also process-related to all other parameters
Decentralisation of responsibilities, authorities and management activities
Multi-skilled and multi-function management ("entrepreneurial" management)
Decision-making process: rather bottom-up
Profit-centres rather than cost-centres
Cost control system: from standard-oriented (models A + B) -----> to target-oriented (with performance
indicators) (Model C)
Kaizen (continuous & systematic process improvement). From "Static" standards (models A + B) -----> to
"dynamic" standards (model C). High employees involvement
Flat Hierarchy (Horizontal Organisation)
Business/entrepreneurial culture and organisation
Total decentralisation of responsibilities in respect of overall results extensive
Process Re-Engineering
Organic system featuring high level of internal "supplier/client" relationship - "inter-function" and "matrix type
organisational structures with high flexibility - value-adding (re-)engineered processes
Profit centres (ABA - Activity Based Accounting)
VENTURE = entrepreneurial management (global management + risk management), highly market-oriented
(in real time), with "intra-preneurial" examples
From MBO (Management by Objectives) -----> to MBP (Management by Policies)
Extensive bottom-up drive
Top management function: co-ordination - homogenisation - internal consultancy/coaching
44

area: relationship with employees
Man = productive resource executing planned activities
Max control (inspection, supervision)
Employees are generally performing a series of simple and/or well defined tasks
New parameters at shop-floor level: job rotation, job enlargement, job enrichment
MBO - Management by Objectives
Tasks performed according to well structured job descriptions
Decentralisation of responsibilities and authorities up to shop floor level - some
form of empowerment (total delegation of responsibilities and max
autonomy within own scope of work)
Considerable/high employee involvement at all levels (in problem solving, decision
making, and improvement activities in general)
Extensive bottom-up drive (both in decision-making and in design/change
of organisational parameters)
Empowerment and beyond: ....employees are partners in business... considerable entrepreneurial and intra-preneurial phenomena within the
Organisation result-based merit-o-cratic system, with examples of profit-sharing
and share-holding type of rewards for employees

area: manufacturing and operational strategy
Max productive volumes (limited only by financial constraints)
Max productive efficiency with high attention to costs
Investments: ----> Improvements of organisation and technology ----> R & D (product and technology)
"Make" rather than "buy"
Linked to the logics of max turnover and max profit
Short/medium term strategies driven by market researches
Product diversification
Fragmentation into business units (divisions, product lines.....)
Tendency to commercialisation "only"
Linked to the logics of "turnover consolidation & strengthening" (large volumes- lower costs-larger volumes)
Driving philosophies: CWQC (Company-Wide-Quality-Control) TQM (Total Quality Management) TP (Total
Productivity: JIT Process Improvement & Management) - TPM (Total Productive Maintenance)
Pilot tool: SEW (Systematic Elimination of Waste)
Considerable/high decentralisation of production (and responsibilities associated with design, if applicable, and production)
and high "integration" with suppliers
Internal client = external client
Linked to the logics of "profit in the medium-long term" maintaining and developing the enterprise's overall value
Protagonist: TBI (Total Business integration) [GWQC (Group-Wide-Quality-Control) - TP (Total Productivity) and
all LEAN approaches/disciplines Value Stream Management - TPM (Total Productive Maintenance)
6 Sigma Methodologies - PPD (Product-Process Development), with QFD (Quality Function Deployment) CIM (Computer Integrated Manufacturing) - SEW (Systematic Elimination of Waste) (Group-wide) TEI (Total Employee Involvement) (Group-wide) and TEP - COMAKERSHIP]
Emphasis on total flexibility and extreme attention to all lead-times: time-to-market (development - engineering) - start-up time P-time - set-up time - distribution time - information time ........ with vendors as co-protagonists
45

area: procurement & relationship with suppliers
Buy at the lowest possible price (utilising high contractual power)
"Paternalistic" style of relationship with ("subordinate") suppliers
Considerable decentralisation (buy rather than make: to cope with market demand and
peaks, differentiated in volumes and mix)
Alternative, competing suppliers (in order to achieve cost efficiency and to cope with
demand peaks) - suppliers "in parallel"
Generation of high competitiveness among suppliers
Max exploitation of suppliers -----> "disposable" suppliers - turnover of suppliers
Extensive decentralisation of production (make produce rather than make) and associated
(global) responsibilities
Creation of own, long-term suppliers network [suppliers: limited in number, well selected,
"dedicated", "married", highly involved in the improvement of common processes, ideally on
the same level of professionalism and maturity] - Motto: "let's improve together"
Vendor-Vendee relationship are seen as a starting point (rather than as a target)
Driving philosophies: Value-chain - GWQC Comakership
Permanent logistic networks integrating vendors and vendees
Few, selected, reliable, integrated suppliers - high degree of reciprocal trust - joint improvement programs
"open" enterprises
WORLD-CLASS PERFORMANCE
the lean enterprise makes no

distinction between external
and internal clients
46
WORLD-CLASS PERFORMANCE
WORLD
-CLASS PERFORMANCE
the lean enterprise

operates per process
47
UNDERSTANDING PROCESSES
CENTRAL PROCESS
(MONEY GENERATING PROCESS)
CRITICAL PROCESSES
(PRIMARY PROCESSES)
Processes that "touch" the customers and are
addressed to satisfy the 1st Supporting Group
(Clients)
SECONDARY PROCESSES
(SUPPORT
SUPPORT PROCESSES)
support the Central (money generation) process OR are
set to learn or research in specific fields
OTHER PROCESSES
invisible to customers, but essential for Organisation's
functioning and addressed to the satisfaction of other
Supporting Groups (Owners & Shareholders
Employees Suppliers Regulating Bodies like
Government, Bureau of Standards, Normalisation
Bodies.)
articulated in various Primary Processes

Examples:
Marketing process - Sales process - Orders
receiving process - Customer Relations
process - Product Design process Production process - Despatch process Billing process - etc.
Examples:
Procurement process - Production Planning
process - Personnel Recruitment process R&D process etc.
Examples:
Administration process - Accounting
process - Health & Safety Management
process - etc.
PROCESS
ENGINEERING
48
TODAY'S ULTIMATE SECRET FOR

LEAN PERFORMANCE, EXCELLENCE
AND COMPETITIVENESS:
FLOW PROCESS
FLOW PROCESS
the overall process must be
flowing and waste-less not only
internally
internally (operation side) but
also externally
externally (client side)
Example 1
Examples 2
49
FLOW PROCESS
Main features
Value delivering, dynamic, flexible, Flow

Processes (with natural sequences) built
around clients expectations and needs, and
with diversified routes accordingly
MultiMulti-function and multimulti-skill personnel
(case worker - case team)
Responsibility for the process and its output
FLOW PROCESS
Main features
Decision making autonomy within the process

--- > Empowerment
Reduction/elimination of supervision and control
One process owner as reference point
50
FLOW PROCESS
Main features
Management: from supervision to coaching

(training and support)
Flattening of organisational structures
Max (intelligent) exploitation of technology
FLOW PROCESS
THE SECOND INDUSTRIAL REVOLUTION
from
to
internal attention
attention to client
attention to task
attention to process
simple tasks
simple processes
function units
process units
51
LPM
Lean
Project
Mangmt
52
FP
Flow
Process
VAM
VALUE ADDING
MANAGEMENT
53
the VAM approach to the productive process
process
time
analysis
Source: Lean Thinking (James Womack + Daniel Jones)
FRIGHTENING.
Time = 319 days
Processing = 3 Hrs (0,04%)
54
SEW
SYSTEMATIC
ELIMINATION OF WASTE
VALUE!
55
56
SUMMARY OF THE MAIN TYPES OF WASTE

Overproduction
Stock
Un-needed processing steps
Motion
Control
Defects
Waiting/idling
Transportation
57
WASTE THE TABLE OF EXCUSES - OLD

1) That's the way we have always done it
2) I didn't know you were in a hurry for it
3) That's not in my department
4) No one told me to go ahead
5) I am waiting for an OK
6) That's his job - not mine
7) Wait till the boss comes back & ask him
8) I forgot
9) I didn't think it was very important
10) I'm so busy I just can't get around to it
11) I thought I told you
12) I wasn't hired to do that
WASTE THE TABLE OF EXCUSES - NEW

1) That's the way we have always done it
2) There is no better way, believe me
me.
3) This way we know it works
works.
4) Why change? We are already so busy
busy.
5) We have tried in the past, and it didn
didnt work
work
6) Managers and consultants
consultants. Only able to mess us up
7) You mean we are stupid the way we do it???
8) Impossible
9) We need stock: it
its a good investment
10) SetSet-up time cannot be reduced further
further.
11) We must control quality or clients will complain
12) All machines eventually give problems
58
spot the waste!
LEAN MANUFACTURING
and FLOW PRODUCTION
continuous flow
the target:
pipeline flow
59
Lean Manufacturing uses less of everything

compared with mass production:
half the human effort in the factory, half the
manufacturing floor space, half the investment
in tools, half the engineering hours to develop
a new product in half the time.
Also it requires keeping far less than half the
needed inventory and results in fewer
defects..
James P Womack Daniel T Jones Daniel Roos
(The machine that changed the world)
LOT (BATCH)
PRODUCTION
VS.
FLOW
PRODUCTION
60
LOT PRODUCTION VS. FLOW PRODUCTION
61
62
63
fake flow production

the conveyor method
64
batch production vs.

one-piece flow
batch production vs. one-piece flow
ANALYSIS
analysis
65
The role of Lean Disciplines in

developing Employee Involvement
The role of
Lean
Disciplines in
developing
Employee
Involvement
66
the SOCO (5S) approach
non-soco examples
67
a soco story
a soco factory
5S in action
a soco factory
5S in action
68
U-CELL
MANUFACTURING
ONE-PIECE FLOW
cell manufacturing
labour/machines situation
69
Lean Manufacturing and

Total Quality Management
THE POKAPOKA-YOKE DISCIPLINE
100% TESTING APPROACHES
THE 6 SIGMA METHODOLOGY
70
TOTAL QUALITY MANAGEMENT

APPROACHES TO TQM
TOTAL QUALITY MANAGEMENT
implementing a Quality
Assurance or Total
Quality Program without
considering the
Productivity aspect would
be "handicapped"
71
FLOW PRODUCTION - THE QUALITY ISSUE

The 5 QA Achievement Levels
1) Defective product is delivered to client

2) Defective product is not delivered to client
3) Defects are reduced
4) Processes do not send defects downstream
5) Processes do not create defects to begin with
Flow Production is
based on QA level 5:
ZERO DEFECTS
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Quality Inspection builtbuilt-into the
productive process: 100% inspection
PokaPoka-Yoke devices builtbuilt-into the
productive process for guaranteed quality
If defects occur, the process is stopped,
and the cause/s found and eliminated
No double check/double inspection
Inspection Department IS
the Production Department
6 Sigma methodology in extreme or
well suited situations
Flash Images of fully automated and

semi-automated calibrating and testing
lines for the Common Rail Diesel
Injection System.
Lines engineered by AEA Srl of Italy.
100% testing
73
100% testing
a world-class enterprise dedicated
to 100% quality testing
The 66-Sigma
-Sigma
Methodology
overview
74
poka-yoke
75
MISTAKEMISTAKE-PROOFING IN EVERYDAY
EVERYDAYS LIFE
EVERYDAYS LIFE
76
EVERYDAYS LIFE
POKAPOKA-YOKE APPLICATIONS
77
POKAPOKA-YOKE APPLICATIONS

The turn-this-board strategy
78

The turn-this-board strategy
HEAVY MECHANISATION /
AUTOMATION
LEAN MANUFACTURING
and TPM
TOTAL PRODUCTIVE MAINTENANCE
79
80
traditional TPM
definition
PARTICIPATIVE PROGRAMS DESIGNED TO INCREASE
EQUIPMENT EFFECTIVENESS (PRODUCTIVITY - QUALITY SAFETY) AIMING AT VARIOUS GOALS:
ELIMINATION OF THE 6 BIG LOSSES,

LOSSES IN ORDER TO
MAXIMISE EQUIPMENT EFFECTIVENESS
RESTORATION OF EQUIPMENT TO OPTIMAL
OPERATING CONDITIONS
ELIMINATION OF ACCELERATED DETERIORATION
AUTONOMOUS MAINTENANCE ACTIVITIES TO
MAINTAIN BASIC EQUIPMENT CONDITIONS
traditional TPM
goals
INCREASE IN EFFICIENCY AND COST-EFFECTIVENESS
OF MAINTENANCE FUNCTION
MAINTAINABILITY IMPROVEMENT AND DEVELOPMENT
OF A MAINTENANCE SYSTEM FOR THE EQUIPMENT
LIFE
MAINTENANCE PREVENTION
INCREASE OF OPERATION AND MAINTENANCE SKILLS
81
traditional TPM
goals
TOTAL INVOLVEMENT OF PEOPLE FROM ALL DEPTS.
THAT PLAN, DESIGN, USE OR MAINTAIN EQUIPMENT
INVOLVEMENT OF TOP MANAGEMENT
MAX. SAFETY AND ENVIRONMENT CONSERVATION/
/POLLUTION CONTROL
AND OTHERS
todays TPM
todays TPM focuses on the entire
productive process to assure that the
right equipment is part of a valueadding/waste-free series of operations
and to assure (by deploying traditional
TPM approaches) that equipment
contributes effectively to the primary
objective of value-generation
82
spot the waste!

people and machines
83
THE 6 BIG LOSSES
84
THE 6 BIG LOSSES
THE 6 BIG LOSSES
85
PREVENTIVE MAINTENANCE
AUTONOMOUS MAINTENANCE
the hearts of TPM
The new relationship between

Maintenance and Production
VALUE
STREAM
MANAGEMENT
86
VALUE STREAM MANAGEMENT

VSM storyboard
PROCESS MAPPING
87
PROCESS MAPPING
PROCESS MAPPING
PROCESS ROUTE ANALYSIS
GROUPGROUP-TECHNOLOGY
88
PROCESS MAPPING
PROCESS MAPPING
89
PROCESS MAPPING
TACKLING IMPROVEMENT KAIZEN STYLE
1. Double-check your direction

2. Understand improvement!!!
3. Rank Improvement Projects!
Create a Kaizen Milestones

Charter and manage it with the
typical Project Management style
90
FROM
A TRADITIONAL
IMPROVEMENTS
LIST.
..TO
THE MILESTONE
CHARTER
91
LEAN
THINKING
what is it?
The key to WCP: LEAN THINKING
LEAN THINKING: what is it?

Based on 5 core concepts:
1. Value:
Value: as defined and/or perceivable by
the customer (what the customers buy)
2. Value Stream:
Stream: the way value is produced
and delivered
3. Flow:
Flow: the required valuevalue-adding steps
must flow
flow the process must flow both
internally
internally (Operation Side) and
externally
externally (Customer Side)
92

Based on 5 core concepts:
4. Pull:
Pull: or making the value stream flow
flow
pulled
pulled by the market (triggering flow
from the customer needs)
5. Excellence:
Excellence: there is no end to the process
of minimising time, efforts, space, costs
and mistakes while offering a product or
service which is closer and closer to what
customers actually want, need, expect or
dream of
of.

Definitions:
ValueValue-adding activity:
activity: any activity that
contributes directly to satisfy the needs of the
customers
Examples:
Airline: actual flying
Healthcare: receiving diagnosis/treatment
NonNon-valuevalue-adding:
adding: anything that takes time or
resources but does not contribute directly to
satisfy the needs of the customers
Examples:
Airline: lininglining-up to checkcheck-in security checkcheck-in
Healthcare: sitting in the waiting room waiting for an appointment
appointment
Other examples: checking, asking, fixing, second and third contacts,
contacts, rere-doing
doing.
93

Very preliminary targets:
Reduce the steps by half

Reduce the time by half
Reduce the errors by half
Subsequent targets:
Cut the steps to VA only

Cut the time to VA-Time
Zero defects
Flow Processing in any Industry
EXERCISE???
..oh, yes!!!
scrapscrap-yard operations - 1
94
LEAN THINKING: resistance

RESISTANCE TO LEAN TRANSITION
It will feel wrong taking apart

something that has taken years
to build
Opposition thinking:
thinking:
Batch vs. one piece flow mentality
Fight fires vs. ask why 5 times
times
Push vs. pull (anticipate) mindset
LEAN THINKING: resistance
the conveyor mentality
95
the conveyor mentality
LEAN THINKING who cares?

Worker/employee:
Worker/employee: why
why should I
care?
care?
Supervisors/foremen:
Supervisors/foremen: we
we have
always done this way
way
Manager:
Manager: with
with this workwork-force,
what do you expect?
expect?
Top Management:
Management: if
if the results
($) are there, why care?
care?
Smiths circle is closed!
96
LEAN THINKING: the tools

Some of the tools for seeing waste:
and:
5W2H
Production Control Board
5WHYs
Spaghetti diagram
TRIZ
Value Stream Mapping
SOCO (5S)
Time Observation
Takt Time
Bar Charts
Flow chart
Communication circle

5W2H
WHAT?
WHY?
amplify
WHERE?
WHEN?
WHO?
HOW?
HOW MUCH?
97

5WHYs
WHY?
WHY?
WHY?
WHY?
WHY?
SPAGHETTI DIAGRAM PRESENT STATUS

telephone
motion/persons
motion/goods
motion/paper/fax

Spaghetti diagram
98

Communication Circles
issue
John
Supplier
Bill
Mary
George

Takt Time
TAKT TIME =
TOTAL AVAILABLE WORK TIME

CUSTOMER DEMAND
Takt Time sets the pace of production to
match the rate of customer demand
Example: TAKT TIME in Healthcare

If your customer demand is for 24 x-rays/day

and your x-ray tech is available 420 minutes
per day
Takt time: 420 24 = 17,5 minutes
99

Time Observation
With Time Observations you determine how long
long it takes
to do the task
Time Observations are NOT Time Studies
Studies (Time &
Motion
Motion..)
Time Observation is a tool to help you see
see waste, by
seeing the nonvalueadding
steps
in
detail
non value
Get close to the work

Video record
See in detail
See the waste
Quantify waste
Classify waste

Bar Chart
Displays Time Observation data
1) for activities performed by
an individual person
TARGET
100

Bar Chart
Displays Time Observation data
1) for activities performed by
several persons
How many
people do
you need?

The main tool:
The main Lean

Thinking tool and
the common
denominator to all
other tools
101
YEARS 2000
FACTORS OF COMPETITIVENESS
Creativity
the 6 thinking hats
102
Flow Processing in any Industry
EXERCISE???
..oh, yes!!!
scrapscrap-yard operations 2 scrap cans
scrap-yard operations 2 scrap cans
103
are Lean Thinking

and Flow Process
principles and
techniques suited
to all industries?
The answer is always:
yes!!
104
Lean Thinking in the Service Industry
Flow Processing
spot the waste!

Service Industry
A GLORIOUS WEDDING
CONVENTIONS
A FISHY EVENING
105
look at the pearls!

(Service Industry)
The pearls in the Service Industry

drop your comments
comments
to the floor!
106
Flow Processing in the Service Industry
The Service Industry offers numerous examples of good,

Flowing Processes and bad, non..
non-Flowing Processes
Processes..
EXAMPLES
EXERCISE???
..oh, yes!!!
POKAPOKA-YOKE FLOW PROCESSING
107
IDEAMATRIX
features, characteristics
characteristics. go here
P
R
O
V
O
C
A
T
I
O
idea
W
O
R
D
S

Sometimes it
its difficult to do things right the first time, without mistakes: there can be problems
problems.
(hotel room not ready. lost suitcase.)
The challenge: what is important is the Service Recovery

Process
Process (there is only one more chance to get things right!!)
the SR Process must be: top priority - extremely fast - lean and simple
simple.
The SRP intervention must care of the customer first and
then of his/her problem
Frontline Personnel empowerment:
empowerment: essential!
Target: transform a dissatisfied client into a (very) satisfied
one!
108
EXERCISE???
..oh, yes!!!
BRA-FITTING
Deploying VSM and other LT

tools in other
Industries/Processes
a) healthcare
109
Deploying VSM and other LT

tools in other
Industries/Processes
b) administration
COMPLEX PROCESSES, INVOLVING SEVERAL PERSONS

or DEPARTMENTS, OFTEN ORIGINATE ERRORS
EXERCISE????
oh, yes!!!!
a hiccup process
process
110
Lean Thinking in the Project Industry
Lean Project
Management
Lean Construction
Management
TRADITIONAL
PROJECT MANAGEMENT
basics
111
TRADITIONAL PROJECT MANAGEMENT

PROJECT PARAMETERS
112

key principles

key principles
113
the need
Typical symptoms of Projects with low

PROJECT MANAGEMENT content
Project Start : slow, hesitant, difficult
Delays on completion
Project Termination : long, painful, with hiccups
Penalties
Costs : too high, and anyhow exceeding budget
Personnel turnover within Project Team
Efforts : duplicated/doubled up
114
Typical symptoms of Projects with low

PROJECT MANAGEMENT content
Inefficient resources utilisation
Waste - Rejects and Defects
Stress, pressure, anxiety, ineffectiveness, inadequacy, lack of
readiness to take up responsibilities, lack of flexibility,
frequent misunderstandings, tendency to "pass the buck",
dede-motivation, rigidity...........
High level of contingencies unforeseen and unexpected
occurrences
Time factor and Quality standards not complied with by suppliers
and subsub-contractors
Dissatisfaction : of Client - of Consultants - within Project Team
within General Management
Likely causes:
Projects not dealt with as such
Non realistic estimation/budgeting
No person responsible for the project as a whole : no Project
Manager (or too many...)
Project Manager lacking knowledge of his role and functions
General Management and/or Functional Managers lacking
knowledge of Project Manager's role
Wrong person acting as Project Manager
Inadequate Communication
Project Manager lacking human resources managing abilities
Project Team not adequately structured by Project Manager
Project's objective(s)
objective(s) not sufficiently defined/clarified
115
Likely causes:
Project Manager lacking strategic abilities
Excessive conflicts - PM lacking conflicts management abilities
Project Manager autonomy too limited/non adequate
Project Manager lacking administrative capacity
Non integrated PLANNING and CONTROL
Non realistic Planning and/or Scheduling
Non adequate Project Cost Control System
Human resources under excessive stress
Too many and too sudden changes of any nature
Project Manager lacking commercial abilities
Project Manager lacking negotiation abilities
116
117
conventional management
and matrix management
118
never start a project unless all resources are available

available.
119
PLANNING
PROGRAMMING
SCHEDULING
CONTROLLING
120
LIFECYCLE OF PROJECT WITH POOR PLANNING
Project initiation
Wild enthusiasm
Disillusionment
Wild chaos
Search for the guilty
Punishment of the innocent
Promotion of nonnon-participants
Definition of the requirements (Planning)
EXERCISE????
oh, yes!!!!
the OWP TUBES project
121
THE BOTTOM LINE
Calculation Sheet
introducing:
LEAN
PROJECT MANAGEMENT
basics
122
Lean Project
Management
foreword
LEAN PROJECT MANAGEMENT
foreword
WHY DO SOME PROJECTS FAIL?
123

the project/construction
industry is in some ways not
completely shifted from craft
to mass production - much
less to lean production
on the other hand, the industry has followed the mass
production model in its extensive division of labour

the main consequences:
WASTE
COST OVERRUNS
DELAYS ON SCHEDULES
the 3 phenomena are strictly
interlinked and have a
common denominator: an
inadequate style of thinking
124
spot the waste!

Construction Industry 1
EXAMPLES
spot the waste!

Construction Industry 2
EXAMPLES
125
any correlation between what you have seen and your work of every
every day?
Any similitude?
Moving
Filing
Answering
Attending
Attending
Reporting
Preparing
Waiting
Observing
Check list:
Meetings spot
spot meetings in the passage
passage
Giving instructions Receiving instructions
Doing things in case

case or why not?
not?
Ordering things SettingSetting-up things Making sure..
Checking Inspecting - Supervising
Talking Clarifying Explaining Illustrating

Illustrating
Chatting - Phoning Taking this

this call
call
Putting pressure Chasing - Expediting Dealing

Dealing
Managing Authorising, approving Getting right

right
Does all this create

value for your clients?

Traditionally, project/construction works are viewed and
modelled only as a series of conversion (value(value-adding)
activities (activity/conversion(activity/conversion-centred or contractcontractcentred model)
For example,
waste activities
such as waiting,
offloading,
storing, moving
material, and
inspection are
not generally
modelled by
Critical Path
Models (CPM),
WBS (Works
Breakdown
Structure) or
other planning
or control tools.
126

analysis of traditional planning inadequacies
In project/construction works, the
effective point of intervention has
proven to be the Weekly Work Plan,
Plan,
because that is where decisions are
made, work is selected and scheduled
and commitments are made.

Generally and traditionally, a bar chart is
produced showing the durations and
sequencing of assignments by subsub-crew for
each day of the week. The barbar-chart is often
literally thrown
thrown at supervisors/foremen.
however, having such a bar chart on hand and using

it effectively may be two very different things
127

Planning (schedules, budgets, etc.) collectively tell project
personnel what they SHOULD do.
Project Management thereafter monitors and enforces
conformance of DID to SHOULD.
SHOULD.
Planning takes place before project execution.
Control takes place during/after project execution.
Scheme:
project objectives
data
information
PM Control
planning the work
resources
SHOULD
executing the plan
DID

traditional planning
Everything works fine until something
something goes wrong - then a
chain reaction takes place ---- > delays over delays
Then, more and more pressure is put on everyone in the
chain to produce more, faster
This usually makes things worse rather than better
Working under pressure results in ever more nonnon-productive
time, dede-moralises supervision, and directs energy and
attention toward fire fighting
fighting rather than learning
how to work well in the first instance
If this traditional approach to planning worked perfectly,

DID would always match SHOULD
Statistics reveal that what actually gets done differs from
what is supposed to be done at least 1/3 of the time
128
taking the lean way

taking
the lean
way

the lean philosophy
views Engineering &

Construction Projects as
fast, continuous Flow
Processes, in which only
conversions add value
129

Based on the same 5 Core Principles as Lean Thinking:
1.Value
2.Value Stream
3.Flow
4.Pull
5.Excellence
specific tools/techniques for:
the PPC and its intelligent use

the Last Planner approach
130

lean planning and the last planner
planner
THE LAST PLANNER: Should-Can-Will

SHOULD
CAN
Last Planner
(waste removal)
WILL
Last Planners are expected to make commitments

(WILL)
WILL) to doing what SHOULD be done, only to the
extent that it CAN be done in a lean fashion

lean planning and the last planner
planner
the LAST PLANNER mechanism
waste reduction/elimination from PU work
package or activity
hence: REALISTIC LOADING of PU resources
constraints & unforeseen/s elimination
hence: SOUND ASSIGNMENT
CAN BE DONE
WILL BE DONE
131

lean planning and lean control
project objectives
data
information
initial planning
SHOULD
Match:
SHOULD to
ADJ. SHOULD
status +
forecasts
ADJUSTED
SHOULD
adjusted planning
CAN
last planner
resources
PM Control
Match:
ADJ. SHOULD
to WILL
WILL
work execution
Match:
WILL to DID
(PPC)
DID

lean planning and lean control
PPC is the heart of Lean Planning/Control
the lean method consists in systematic measuring
identifying reasons for non)
non-completion (5Why
(5Why)
and tracing reasons back to root causes that can be
eliminated to prevent repetitions
Measuring PPC allows also to distinguish between failures

rooted in plan quality and failures to execute plans
Traditionally, we assume that all failures are execution
failures, whereas the vast majority of failures to complete
planned work are rooted in the quality of plans.
132

who is the Last Planner?
ideally.
everybody!
Lean Project
Management in
Multi-Project
situations
the TOC approach
133
THE BI-TUBE
PROJECT
ANALYSIS
can construction
become different?
look at this!!
134
LEAN THINKING
AND
TECHNOLOGY
LEAN THINKING AND TECHNOLOGY
Remember! In a lean environment:
1st People
2nd Methods (lean)
3rd - Technology
135
LEAN THINKING AND TECHNOLOGY
technology cul-de-sac
technology cul-de-sac
136
LEAN THINKING
PRINCIPLES
IN OTHER
PROJECT-DRIVEN INDUSTRIES
Spot the Waste!

Steel Fabrication
EXAMPLES
137
LEAN THINKING
AND
SAFETY
non-lean safety examples
138
LEAN THINKING
AND
THE CONTINUOUS
PROCESS INDUSTRY
LEAN THINKING AND THE

CONTINUOUS PROCESS INDUSTRY
Targets:
a) balance the Flow: through Continuous Flow techniques
b) pull the Flow:
Flow: relate Operations to the Market
c) assure the Flow:
Flow: through TPM & other technical
Maintenance disciplines
139
LEAN THINKING AND THE

CONTINUOUS PROCESS INDUSTRY
Additional Target:
eliminate the residual waste around the Flow
The Control Room syndrome

EXAMPLES
140
Lean Thinking
and
the Value Chain
Lean Thinking and the Value Chain

key issues
How can things be

e
structured so that the
s id
pl y
p
u
s
enterprise does nothing
but add value, and does
that as rapidly as possible?
ide
ds
n
a
d em
all the intermediate steps, all the intermediate time

and all the intermediate people are eliminated
all thats left are the time, the people and the
activities that add value for the customer
141
RELATIONSHIP WITH
SUPPLIERS IN A
WORLD-CLASS
ENVIRONMENT
pl y
su p
e
s id
142
VENDORS CLASSIFICATION
IV CLASS - "NORMAL"
SUPPLIER
CONVENTIONAL APPROACH
RELATIONSHIP Negotiation focused on price
DEVELOPMENT Minimal infos & quality specs
OPERATIONAL INTEGRATION
STRATEGIC INTEGRATION
Great attention to "total" process

Long-term relationship regularly (+- yearly)
reviewed
Open infos (including market's feed-back)
High level of trust
Mutually agreed vendor's "recovery"
procedures
Price fluctuations allowed with mutually
agreed criteria
Systematic (and jointly defined) vendor's
Kaizen programs (price-quality-process)
Open orders as a rule
Consulting/training services to Vendor
Great attention to common

business
Open doors, open "value-chain"
and open info system
Benchmarking together
Full trust: vendor thrives on
vendee's business and vendee
thrives on vendor's support to
business
Top level agreement on policies
and strategies
Proper business partnership
with some suppliers
Vendor responsible only for

conformity to specs
Systematic acceptance
Inspections/Tests
Max guarantee only on a 100% test
basis (sampling/AQL techniques
and free-pass carry high risk)
Some inspections at source
Some "formal" certification (2nd
and 3rd party) of vendor's QA
system
Extensive certification of vendor's QA

system
Vendor's rating on "absolute" quality
Start-up of "auto-certification" programs
Vendor responsible for conformity to use
Quality improvement programs imposed
to vendor
Mix tests on acceptance/free-pass
Extensive auto-certification
Focus on vendor's CWQC system
Quality guaranteed and auto-certified with
jointly agreed criteria)
Vendor's global responsibility on
consequences of non-conformities
(product liability)
Free-pass with/without bonus
Integrated improvement programs (QA
TQM)
Maintenance of autocertification
Focus on GWQC
Co-design of quality specs and
QFD
Free-pass as a rule
Vendor's globally responsible
for end-user's satisfaction
Buffer stocks: safe/necessary
Start-up of JIT supplies (mainly Kanban)

Some buffer stocks
JIT supplies (frequent/small-lots) directly

to productive areas
No buffer stocks
Some synchro-supplies
Global vendor's integration in

vendee's productive flow
synchro supplies only
Common informatics and
planning
Co-engineering & Co-design

Some common use of QFD
Some joint R & D investments
Extensive, joint PPD and QFD

Extensive, joint R & D
investments
Global involvement
QA system evaluation/audit
Rating based on "absolute" quality
Evaluation/Rating based on Total Costs of
(non-) quality
Global Process capability audit

Evaluation and rating at Total Costs
Global Vendor's Organization

audit
"Let's improve together"
"The productive process starts at

vendor's premises"
"Let's make business together"
None/minimal vendor's involvement Some vendor's involvement

PRODUCT Vendee's imposition of vendor's process
PROCESS
improvement programs
DEVELOPMENT
MOTTO
I CLASS - "PARTNER"
SUPPLIER
(Business Comakership)
Primary attention to quality/price ratio

Large infos
More reciprocal trust
Many open orders & extensive purchases
planning
Start-up of long-term relationship
Reduction of suppliers number (= selection)
Some experimental comakership
Target: vendor's improvement
Decentralization of production and
responsibilities
LOGISTICS
EVALUATION
& RATING
II CLASS - "INTEGRATED"
SUPPLIER (Operational Comakership)
"IMPROVEMENT" APPROACH
Conflictual interests
Little reciprocal trust
Governed by contractual power
Single-order purchases with little
exception
Short-term purchases horizon
Many suppliers
QUALITY
ISSUE
III CLASS - "PERFORMING" SUPPLIER
Price
Quality: compliance to specs
Reliability & Performance
Evaluation of QA system (2nd party
certification)
"Shop around for the best price"
143
comakership
the present and the future
International Lean Supply Chain - example
144
THE CLIENT IS THE

KEY:
THE NEW DIMENSION
e
s id
nd
a
d em
145
the customercustomer- and marketmarket-driven enterprise
Enterprise committed to provide excellent quality

and competitive products and services to satisfy the
needs and wants of a well-defined market segment

Traditional enterprise
Measure of
Performance
Marketing focus
Bottom-line Financial Results

Quick return on Investments
Customers satisfaction
Market share
Long-term Profitability
Level of Quality & Productivity (Value)
Sellers Market
Careless about lost customers (due
to poor customers satisfaction)
Buyers Market
Targets at achieving increased Market
Share and long-term financial growth
Attitudes toward Clients are irrational: a pain in the

neck
Customers
Basis for
Decision-making
CustomerCustomer-driven enterprise
Customers: an obstacle to
Profitability
Hostile and careless attitude
Take it or leave it attitude
Customers voice is of primary

importance
Professional treatment/attention to
clients
Courteous and responsive attitude
Empathy and respectful attitude
Product-driven
Management by opinion
Customers-driven
Management by facts and data
Short-term focus
Product and
Service Planning Reactionary Management
Planning Process: through
Management by Objectives
Long-term focus
Projective Management
Planning Process: strategically driven by
customers
146

Traditional enterprise
CustomerCustomer-driven enterprise
Provided according to Enterprises

Quality of
requirements/policy
Product/Services
Provided according to customers

requirements and needs
Targeting at errors and defects

Productive
detection
Process Mangmt.
Targeting at errors and defects

prevention
Customers, Suppliers and

Operations people have nothing in
common
Extensive teamwork practice between

Process Owners, Suppliers and
Customers
Customers can wait for products and

services
Fastest time-to-market products and

services
Orientation to
Personnel
People are an infinite source of

problems and a burden on the
enterprise
People are the enterprises greatest

resource
Improvement
Strategy
Crisis Management
Management by fear and intimidation
Continuous Process Improvement

Conscious Performance Management
Style of
Operations
Product and
Service Delivery
147
148
Lean Thinking is not only concerned with

waste elimination from processes
to the contrary, Lean Thinking is very much
concerned with conservation of value and
enhancement/increase of value to the customers
for that, we must focus on.
OPPORTUNITIES
AND THREATS
OF THE NEW
ECONOMY
the market is, as always, full of opportunities.
149
OPPORTUNITIES: 1)
OPPORTUNITIES: 2)
150
OPPORTUNITIES: 3) the longest chain
EXERCISE????
oh, yes!!!!
spot an opportunity
151
Lean Thinking
and
the Marketing/Sales Process
think like a customer!
Lean Thinking applied to the Marketing/Sales Process
drill
Marketing/Sales = process to manufacture
manufacture customers
Process output: loyal, profitable, repeat customers
the process must include only those activities which are
necessary to add value from a customer
customers perspective
PUSH vs. PULL

example: leads generation (trade shows..)
ONEONE-PIECE FLOW
market research in batch
batch --- >
continual research on a continual basis
CELLULAR MANUFACTURING
permanent, XX-functional work teams, dedicated to process
leads, QFD outputs, etc. in oneone-piece flow mode
152
Lean Thinking
and
Office Work
open debate
the deployment of TPM

principles in other
industrial sectors
open debate
153
Lean Thinking
vs.
6 Sigma
LT vs. 6 Sigma
154
LT vs. 6 Sigma: one possible LT solution
LT vs. 6 Sigma: one possible LT solution
155
Lean Thinking
principles in
developing new
products/services
a slight design mistake
156
WORLD CLASS PRODUCT DEVELOPMENT

The main StateState-ofof-thethe-Art
Art Disciplines are:
QFD (Quality Function Deployment)
FMEA (Failure Mode and Effect Analysis)
FTA (Fault Tree Analysis)
DE (Design of Experiments)
MU (Multivariate Analysis)
VA (Value Analysis)
VE (Value Engineering)
CE (Concurrent/Simultaneous Engineering)
essential: INTEGRATED APPROACH
157
CONCURRENT ENGINEERING
...another Terminator of
Adam Smith theories...
158
Lean Thinking and Software Development

Manufacturing wastes translated to software development
Overproduction = Extra Features

Inventory = Requirements
Extra Processing Steps = Extra Steps
Motion = Finding Information
Defects = Defects Not Caught by Tests
Waiting = Waiting,
Waiting, Including Customers
HOMEWORK???
..oh, yes!!!
159
LEAN STATUS
SELF-ASSESSMENT
a world-class
project-driven
enterprise
160
LEAN THINKING
THE EXCELLENCE TARGET
IMPROVING PERFORMANCE:
THE LEAN KAIZEN APPROACH
the bottombottom-up approach to Performance Improvement has a name:
161
today's KAIZEN
systematic and methodical approach, toptopdriven, coco-ordinated and supported,
to continuous improvement towards an
"excellent, lean status" target in various
organisational and operational areas;
in a "step"step-byby-step" fashion;
and with deep, active involvement of those
concerned in each improvement area
IMPROVEMENT
increase in effectiveness
and/or efficiency of processes
(all the rest might be spurious, fictitious
improvement)
through
PREVENTIVE ACTIONS
CORRECTIVE ACTIONS
162
the piers
of Kaizen
163
KAIZEN & TEI

.....the person doing the job
knows far more than anyone
else as to the best way of
doing that job, and therefore is
the one person best fitted to
improve it....
.....if he only knew how.....!
164
KAIZEN IS TEAMWORK!!!
vertically
horizontally
internally
externally
KAIZEN IS PROBLEM-SOLVING
THEORY AND PRACTICE
methodologies to approach
problems and complexity:
K-T method
Brainstorming, Lateral Thinking & other Creative P/S
techniques
Critical Examination & other "global" ProblemProblem-Solvers
165
KAIZEN IS DECISION-MAKING
ABILITY AND PRACTICE
methodologies to approach the
decision-making process:
Archer method
optimisation methods
elimination and evaluation charts
decision trialtrial-balance method
matrix techniques
EXERCISE???
..oh, yes!!!
a marketing problem
166
KAIZEN IS INTELLIGENT USE

OF THE OLD & NEW TOOLS FOR
LEAN IMPROVEMENT
Data Collection Chart, Scatter Diagram, Control Charts
Graphs, Histograms, Pareto Diagram, ABC analysis
Cause and Effect (Ishikawa) Diagram, Relations Diagram
Affinity Diagram, CEDAC, Arrow Diagram, FlowFlow-Charts
Tree (Systematic) Diagram, Matrix Diagrams, PP-M
Analysis
FMEA/FMECA Methods
Radar (Spider) Charts
and all LEAN THINKING tools and techniques
KAIZEN IS
CULTURAL
CHANGE
167
team
team
work
work
team-work
does it work?
team-work
Team-work the solution?
The principle of working in team to tackle
all sorts of organisational and technical
issues has been discovered several
decades ago
ago.
InterInter-functional Teams
Project Teams
Kaizen Teams
Improvement Teams
Quality Circles
ReRe-engineering Teams
6 Sigma Teams
Teams
and Meetings:
Meetings: Board Meetings - Management
Meetings Department Meetings InterInter-functional
Meetings Production Planning Meetings etc. etc.
BUT:
168
BUT:
not to mention
annoyed
intimidated
.do you recall at least one

meeting from which you (or
someone else) came out ununsatisfied?
satisfied? or a bit frustrated?
frustrated? or
possibly stressed?
stressed?
humiliated
irritated
horrified
exhausted
perturbed
confused
terrorised..???
angry
bored to death
Meetings and team-work are

not necessarily associated
with high involvement and
effective improvement nor do
represent the sole/best answer
to kaizen improvement
169
Team-work does it work?
EXERCISE????
oh, yes !!!!
team exercising
the nerd
Lean Thinking and PEOPLE
and: the importance of Top Management commitment

in implementing a LT program
170
PEOPLE IN INDUSTRY
Engine (train) Drivers

Doctors
Farmers
Fishermen (Hunters)
171
if a person at the top is the most important, see what

happens if a person at the bottom walks away
away.
172
HIGH (TOTAL) INVOLVEMENT

in a nutshell
TEI is everyone in the Organisation deeply involved,
using own brain power,
problem-solving,
solving, learning,,
power, in problemcontinuous improvement activities, and systematic
search for opportunities
As people's best motivations come from their own
ideas,
ideas, TEI stimulates people to release, in a
channelled mode, their own creative energy
for the benefit of the Customers, the Organisation's
and their own

in a nutshell
TEI is a system for organisational and people's
change.
change.
It is a system that improves people's working
conditions by their own actions.
TEI is a system for direct participation of people to
Organisation's success, by letting them take
responsibilities.
responsibilities.
TEI wants people to be responsible for their own
motivation and their own improvement: simply by
letting them know the score....
score....
173

in a nutshell
TEI is a system that

stimulates people to
become responsible agent
for their own security.
.responsible agent for

their own security.
the worm
174

in a nutshell
TEI represents a continuous

challenge to people, by letting them
set the path to their fulfilment at
work, enjoying the very process......
high involvement in manufacturing.
175
multi-skill, multi-function.
high involvement.
176
high involvement.
getting highly involved.
177
involvement: special cases
involvement: special cases

Retailing personnel
Service establishments personnel
Public officials
Necessary roles.
with simple job descriptions (1 2 items)
Bottom-of-the-ladder personnel
178
The IWT triumph!
a world-class example
179
a practical model for TEI
180
LEAN THINKING
and
the LEARNING
ORGANISATION
THE SECOND INDUSTRIAL REVOLUTION
and thinking
Public enemy n. 1:
brain laziness
181
thinking and other features

before midnight
after midnight
Business:
Business:
specialisation-formatted
specialisation
integration-formatted
integration
Automatic Thinking
(associated to specialised
jobs)
Hard, creative thinking
Value-generating thinking
and/or
ExternallyExternally-guided Thinking
(from Management above)
SelfSelf-integrated Thinking
Both lead to:
Leads to:
Reactive Thinking (reaction to

the ambient/work before the
person)
Projective/ProProjective/Pro-active Thinking
(controls and manages the
ambient/work before the
person)

before midnight
after midnight
Based on brainbrain-laziness :
needs external authority
to be governed
Based on own brainbrainpower : has the authority

internally
Suitable for fragmented

bits of work (work
formatted Adam Smith
style)
Suitable for
integrated flow of
work (a process)
182

before midnight
after midnight
Maintains only (it may even

destroy...)
Builds,
Builds achieves, generates
wealth
Keeps people busy at making

things going (deceiving
oneself to be working hard)
Makes people stick to value

generation (working hard for
production of Value)
Self-integrated Thinking
discouraged (dangerous !!)
Self-integrated Thinking
promoted (essential !!!)
Push functioning, topdriven/imposed
Pull functioning, market/clientdriven

before midnight
after midnight
COMPLEXITY:
SIMPLICITY:
SIMPLICITY
many people using specialised

thinking to control many
others using automatic and/or
externally-guided thinking.
fewer people using hard,

integrated thinking,
empowered to manage value
generating processes - simply
controlled (in-process and in
real-time control through basic
indicators).
Absurdity.
Based on DELEGATION
DELEGATION"
which, in the majority of
cases, is not transmission of
responsibilities, but
evaporation of responsibilities
(fresh-air effect).
Based on EMPOWERMENT
which is integral/total transfer
of responsibilities.
Empowering = transferring a
business mind to all bodies
concerned with value
generation
183

before midnight
after midnight
Leads to stagnation (unintegrated, cul-de-sac

responsibilities): people
stagnating into day-to-day
problems that get trapped with
Leads to wealth (integrated

responsibilities & areas of
purpose): people
concentrating only onto value
generation
8-5 attitude/mentality
because
attitude
of little purpose or none at all
Entrepreneurial attitude
because of areas of purpose
Personnel have little/no

purpose, therefore little/no
MOTIVATION.
MOTIVATION The typical
employee does not know,
does not feel, only has cul-desac responsibilities....
Entrepreneur's attitude,
approach, MOTIVATION,
MOTIVATION
knowledge and sensations
because of areas of purpose

before midnight
after midnight
Generally leads (in a

conscious or un-conscious
mode) to employees'
DISSATISFACTION - cul-desac responsibilities are the
best guarantee of frustration,
stress and dissatisfaction
Generally leads to employees'

JOBJOB-SATISFACTION integrated responsibilities are
the essence of real values,
happiness and excitement
Motto: "...work is a necessary

evil..."
Motto: "...work is a gymnasium

in which people can practise,
test themselves, evolve,
develop, learn, grow, and be
happy and proud of the value
they produce..."
184

before midnight
after midnight
Knowledge, associated to
specialised work, is the most
valuable asset: it must be
maintained, preserved and
protected
Knowledge is not as
important. The ability to
"learn" and the opening to
"learning" and perfecting
knowledge are most
important.
Traditional, static
Organisation
Dynamic, Learning
Organisation
ENTERPRISE MANAGEMENT
in a lean environment
simple is beautiful!
small is beautiful!
185
small is beautiful! - 1
Paulaner Bruhaus
Clock Tower
Cape Town Waterfront
186
187
188
Bakeries today
189
190
2 small SA enterprises
191
william
william
192
edith
edith
193
Beyond TEI
TOTAL EMPLOYEE
PERFORMANCE
TEI and beyond - TEP: TOTAL EMPLOYEE PERFORMANCE
Why do all traditional HR management and

motivational techniques somehow fail?
Management by Objectives, Effective Leadership, Diversification,
Z Theory, Situational Leadership, Effective Communication, Zerobased-Budgeting, Decentralisation, Team Building, Management
by Exception, Dale Carnegie techniques, Interpersonal Skills,
Quality Circles, Excellence, Restructuring, Portfolio Management,
Interactive Management, Matrix Organisational Structure, Total
Quality Management, ISO 9000..... and One-Minute Managing......
194

the philosophy
It is not a matter of applying

fine psychology, or of following
pipe-smoking top notch
consultants refined theories.

the philosophy
..it is just a matter of

understanding that time is due to
go back to basics: few, but clear,
core concepts - few, but well
identified, values and, most of
all, simple, basic methods......
195

the philosophy
Give a chance to people to perform, to be jobsatisfied, and to re-gain professional dignity,

by empowering them to be totally responsible
and accountable for a complete process, of
which they can understand the entity, the
parameters, the importance, the inputs, the
outputs, the client, the associated value, and
the performance measuring criteria.

the philosophy
.give people a chance to be

craftsmen in their workshop,
or traders in their shop, in
strict contact with their
customers....
196

the philosophy
give people a chance to be

proud of the value they
generate, of the wealth they
create for themselves, and for
others......

the philosophy
let people be responsible..
Value Producers
197
let people be responsible..
Value Producers
why world-class enterprises

do not suffer from the
absenteeism plague?
open debate
198
.shift
TEI and
beyond - TEP: TOTAL EMPLOYEE PERFORMANCE
from: TGIF
to: TGIM!!
a practical model for TEP
199
are there any examples of

TEP actually operational?
is the TEP scenario only suited to small businesses?
200
The growth of an Enterprise does not

increase the number of valuegenerating processes nor the
number of basic responsibilities.
It is the way we have changed and
manipulated industry that has
created an enormous number of
dummy, fictitious responsibilities
(and functions).......
If the business volume grows, there are

various ways of dealing with it rather
than building pyramids. For instance:
one or more replica of the original business
parallel, horizontal processes
a manufacturing enterprise without a factory
a company without a company
201
a company without a factory
Replicas, Parallel Processes,

Companies without a Company, and
other similar, new business styles have
one very important feature in common:
they are
untouchable by
Smiths virus
202
.so, you would like your people to be:
?????? Dedicated to their work

Responsible
????
Committed to improvement
Serious and reliable
Cost-conscious
Accountable
Efficient
.so, you would like your people to be:
Efficient Responsible - Costconscious - Dedicated to their work Serious and reliable Accountable
Committed to improvement ???? - ????? - ?????????????
203
..in a nutshell: you would like your people to
perform
This is possible: it can be achieved
.it depends on you,

entrepreneurs and managers..
..its just your choice..

But: there are 3 necessary steps
204
.you would like your people to be: responsible accountable

efficient - dedicated to their work committed to improvement
improvement
THE 3 NECESSARY STEPS
1) Understand the environmental

2) Be prepared to abandon the
formula
3) Have a clear direction and tell
people about it.
4) .and something more
more..
Mc Gregor and the X-Y theory
the Pygmalion effect

BELIEVE IN
PEOPLE!
205
Lega del filo doro

http://www.legadelfilodoro.it
Non-profit Organisation Osimo Italy
Assisting the blind, deaf and dumb.
Communication: MALOSSI
206
.so you would like your people to be: responsible accountable

improvement
THE CHOICE IS YOURS

YOURS
traditional
high
limited
little/none
methods
waste
responsibilities
involvement
Job Satisfaction??
.so you would like your people to be: responsible accountable

improvement
THE CHOICE IS YOURS

YOURS
Job Satisfaction!!
involvement
responsibilities
value added
methods
high
high
high
lean
207
Lean Thinking
A course presented by Carlo Scodanibbio
Organised by:
CREDITS
The documentary material of this course is based on papers and works
works of:
and on personal experience and development by Carlo Scodanibbio
MUSIC BY
Bach Barry - Beethoven Grieg Haydin - Mozart Muffat Paganini - Ponchielli
RimskyRimsky-Korsakov - Rossini R. Strauss - Verdi - Vivaldi Wagner & others
Copyright Carlo Scodanibbio 2009
Lean Thinking
a cultural revolution
208
THE LEAN ENTERPRISE (Lean Thinking)

Power Point Presentation by Carlo Scodanibbio
Copyright: Carlo Scodanibbio 2008/09 All rights reserved

A simple copyright statement: you are authorised to install this presentation in one computer station only.
You are authorised to print this entire presentation and copy it for exclusive use by employees of your Organisation.
You are not authorised to distribute this presentation - by electronic or other means and supports - outside your Organisation.
http://www.scodanibbio.com
209

Carlo Scodanibio - The Lean Enterpriise - Lean Thinking (Ltpre-1267735672145-Phpapp01)

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Carlo Scodanibio - The Lean Enterpriise - Lean Thinking (Ltpre-1267735672145-Phpapp01)

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Carlo Scodanibbio presents:

The Lean Enterprise

(one and one only)

write it down on a piece of paper (1 minute)

LEAN THINKING: THE ORIGIN 1

LEAN THINKING: THE ORIGIN 1

LEAN THINKING: THE ORIGIN 1

LEAN THINKING: THE ORIGIN 1

LEAN THINKING: THE ORIGIN 1

LEAN THINKING: THE ORIGIN 1

LEAN THINKING: THE ORIGIN 1

LEAN THINKING: THE ORIGIN 1

LEAN THINKING: THE ORIGIN 1

LEAN THINKING: THE ORIGIN 1

LEAN THINKING: THE ORIGIN 1

LEAN THINKING: THE ORIGIN 1

LEAN THINKING: THE ORIGIN 2

1. They are generating value for your customers - or

The market leaders will always

.so, you would like your enterprise to be:

really satisfying clients and employees

guaranteed in its future

.so, you would like your enterprise to be:

Efficient Profitable Modern

..in a nutshell: you would like your enterprise to

This is possible: it can be achieved

.it depends on you,

..its just your choice..

there are 3 necessary steps

.you would like your enterprise to be: Efficient Profitable Modern

THE 3 NECESSARY STEPS

1) Understand the environmental

.the world has changed.

clients are monsters.

protect the formula!

-- > resistance to change!

preserve its integrity!

effects of the formula

the formula (after midnight)

Increase in efficiency of less

the obsession to change

The Formula is blocked, and the whole

If signals show very poor performance,

TELL YOUR PEOPLE ABOUT THE

This is a pass the Rubicon

THE MAIN COMPONENTS OF

(KEY PERFORMANCE COMPONENTS KPC)

THE MAIN COMPONENTS OF

(KEY PERFORMANCE COMPONENTS KPC)

THE MAIN COMPONENTS OF

(KEY PERFORMANCE COMPONENTS KPC)

THE MAIN COMPONENTS OF

Rather than to Functions and

THE MAIN COMPONENTS OF

(PROCESS PERFORMANCE INDICATORS)

Product Development Process Achievement

Goods Returned Management Process Functionality

THE MAIN COMPONENTS OF

All significant Performance

MEASURING QUANTIFIABLE PERFORMANCE COMPONENTS

Certain Performance Components may

MEASURING UNUN-QUANTIFIABLE PERFORMANCE COMPONENTS

Any (apparently) un-measurable