The Continuous Improvement Primer

THE CONTINUOUS IMPROVEMENT PRIMER

- an introduction to Basic Lean, Quality Management, Environmental Management and other Management Systems MICHAEL ABILDGAARD

The Continuous Improvement Primer - an introduction to Basic Lean, Quality Management, Environmental Management and other Management Systems © Michael Abildgaard Pedersen, Copenhagen, Denmark 2017 Second Edition 2018 Self-published and Printed by CreateSpace, an Amazon.com Company ISBN-13: 978-1985895720 ISBN-10: 1985895722

TARGET GROUP

Students at entry level in business-oriented University Colleges. The Continuous Improvement Primer is being used in my classes at the BA in Media Production and Management, at The Danish School of Media and Journalism (University College).

DISCLAIMER

Where there are no apparent quotes from the literature, the various comments, recommendations and interpretations is the author's personal views and recommendations. All photographs are either taken by the author or found on pixabay.com

TECHNICAL SPECIFICATIONS

Total number of words: Approx. 60,050 Total number of keystrokes: Approx. 370,184 Fonts: Cover: Aller, Aller Light and Aller Display Interior: Aller Display, Times New Roman and Calibri The original document was created in Microsoft Word, “printed” to PDF/X-1a (CMYK) using the ICC-profile: PSO_Coated_300_NPscreen_ISO12647_eci.icc (FOGRA43) This pdf file was created on December 12, 2018

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TABLE OF CONTENT 1 – INTRODUCTION

COMPANIES AND ORGANIZATIONS – why do they exist? CONTINUOUS IMPROVEMENT – how to strive for perfection OPERATIONS MANAGEMENT – how companies operates SUPPLY CHAIN MANAGEMENT – how companies collaborates Becoming a Lean Company is very hard

2 – LEAN: BACK TO BASIC

INTRODUCTION TO THE ORIGINAL LEAN LITERATURE

1988, Ohno: Toyota Production System – Beyond Large-Scale Production 1988, Krafcik: Triumph of the Lean Production System 2003, Womack and Jones: Lean Thinking – Banish Waste and Create Wealth in Your Corporation 2003, Liker: The Toyota Way – 14 Management Principles from the world’s greatest manufacturer 2003, Rother and Shook: Learning to see – Value stream mapping 2003, Martin and Goldman: Lean Advertising – How to Get Breakthrough Work Faster and Cheaper 2011, Eric Ries: The Lean Startup.

JIT: Just-in-time (Push vs. Pull) KAIZEN – Continuous Improvement Summing up – What is Lean?

3 – TO SEE OR NOT TO SEE, That is the Quest (Value vs. Waste) WASTE (muda)

Waste of overproduction - some examples Waste of time on hand (waiting) - some examples Waste in transportation - some examples Waste of processing itself / too much machining - some examples Waste of stock on hand (inventory) - some examples Waste of movement - some examples Waste of making defective products - some examples Waste of design of goods and services, which do not meet the users need - some examples Waste of unused employee creativity - some examples

WASTE in everyday traffic – an example VALUE Value and Waste in Intellectual Work

4 – LEAN + SIX SIGMA = LEAN SIX SIGMA Six Sigma

George, M. L. “Lean Six Sigma: Combining Six Sigma Quality with Lean Production Speed” ISO 13053 Quantitative methods in process improvement, Six Sigma

5 – THE LEAN SIX SIGMA TOOLBOX

DMAIC: Define, Measure, Analyze, Improve, Control DMAIC: 1 DEFINE the problem The Flowchart – provides an overview Spaghetti diagram – a visual track and trace tool SIPOC: Supplier, Input, Process, Output, Customer

8 12 18 22 29

33 34 37 39 40 42 44 45 46

47 48 52

53 55 62 64 66 68 70 72 74 76 78

80 82 85

89 90 92 93

95 96 97

98 100 101

DMAIC: 2 MEASURE the current performance DMAIC: 3 ANALYZE the process

102 103

DMAIC: 4 IMPROVE the process

114

DMAIC: 5 CONTROL the improved process

123

The Value Stream Mapping – provides an insight 5 x why? – a tool to finding the root cause to the problem Brainstorm: Ishikawa’s FISHBONE diagram – a Problem Solving Tool Kaizen-events / Kaizen-blitz SMED: Single-Minute Exchange of Dies – a tool to reduce changeover time OEE: Overall Equipment Effectiveness – a tool to calculate lost capacity 5S: - a tool for bringing order in the workplaces TPM: Total Productive Maintenance – a tool to keeping the equipment fit VISUAL CONTROL / VISUAL MANAGEMENT – you see? KANBAN: Reorder or fill-up the shelves, NOW!

4

7

104 112

115 116 119 121 124 134 136 139

Lean Six Sigma – Black Belt certification LEANUS – Lean without stress

140 142

6 – QUALITY MANAGEMENT SYSTEMS – ISO 9001

149

7 – GMP: Good Manufacturing Practice 8 – ENVIRONMENTAL MANAGEMENT SYSTEMS

184 185

9 – CSR: CORPORATE SOCIAL RESPONSIBILITY

194

10 – INNOVATION MANAGEMENT – how do we improve our products?

197

11 – CHANGE MANAGEMENT – how do we handle all those changes?

204

12 – KNOWLEDGE MANAGEMENT – how do we manage what we know? BIBLIOGRAPHY ABOUT THE AUTHOR

215 218 220

The content of ISO 9001:2015 An Activity is a Process DEVELOPING a Company-specific ISO 9001 System IMPLEMENTING a Company-specific ISO 9001 System MAINTAINING a Company-specific ISO 9001 System CERTIFICATION of the company's Quality Management System ISO 9001 & LEAN – similarities and differences ISO 9001's suitability for the inclusion Lean

ISO 14001 - Environmental Management System EMAS – The Eco-Management and Audit Scheme Nordic-Eco-Label (The Swan) EU-Eco-Label (The Flower) PEFC – The Program for the Endorsement of Forest Certification FSC – Forest Stewardship Council CO2Neutral Websites UN Global Conduct ISO 26000 – Guidance on Social Responsibility

Continuous innovation / Incremental innovation – Steady-state change Discontinuous innovation / Radical innovation – Radical change Disruptive innovation – Radical change Open Innovation – user driven innovation Ten Types of Innovation – Larry Keeley

Resistance and support in a Business Psychological perspective (Kotter) Resistance and support in a Sociodynamic perspective (Fauvert) Resistance and support in an Organizational Culture perspective (Schein)

154 157 162 171 175 176 179 181

187 188 189 190 191 192 193 195 196

198 199 200 202 203 205 209 213

5

The Value Stream Mapping – provides an insight When talking about The Value Stream there is a risk of confusing it with a Process Flow, Workflow or Process Flowchart as described in the previous. But there are major differences. • • •

•

The Flowchart focuses on sequences of processes (Process A, Process B, Process C,) The Flowchart focuses on WHAT is happening within every process The Value Stream Map is focusing on what is happening WITHIN and BETWEEN the processes, how information flows through the company and how the work is performed within a process The Value Stream Map is focusing on the time aspect. The total Lead Time (L/T), the Cycle Time for the process (C/T), the Changeover Time (C/O) and the Value Adding Time (V/A) and it also promotes the handling of non-value adding activities

The Value Stream Mapping focuses on the identification and managing of customer values in all activities, while the Flowchart focuses on sequencing the processes. As an alternative to the Process Flowchart drawing described in the previous section, it’s also possible to show each activity or process in a chronological list like the coffee brewing example presented earlier. EX.: a workflow for the production of a printed matter: 1. Prepress 2. Press 3. Postpress

Here is the same workflow, a bit more detailed: 1. Order Receipt 2. Order Processing 3. Production Planning 4. Purchase of raw materials 5. Receiving digital file from client 6. Pre-press activities 7. Plate Preparation 8. Set up the printing machine 9. Printing 10. Finishing (die cutting, UV varnish, sizing, Hotfoil etc.) 11. Cutting 12. Folding 13. Stitching 14. Packing and distribution

These two examples give us an insight into how the product flows through the workflow. This workflow can be unfolded into further details for at least 30-40 processes, which in fact tell us the same. But what we DON’T see in these workflow descriptions is HOW the product flows between the processes.

What is happening between process 12 and 13?

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In the Flowchart or workflow description, we cannot see if there are any "bottlenecks" or whether the next step in the process is ready to receive the next job. It gives us no idea of what happens between individual sub-processes and how the communication is across these stages. In the value stream analysis you can see all this. The value stream shows all the details, for example: • • • • •

For how long do the plates wait before they are picked up and used? For how long does the paper wait before the printing process begins? For how long do the printed sheets wait before they are sent to the bindery? For how long do the raw materials lie between processes as “work-in-progress”? How long does this process take and what percentage of this time adds value?

Each of these questions are aimed at the key elements of Lean and especially at the waste that occurs in the value stream. When you begin to make a Value Stream Map it will prove to be difficult to SEE the value stream and to map it out. We are accustomed to carry out the work in a certain way – a way that seems natural and right (because we have become used to it?). What is needed is a new perspective, a new set of eyes that goes through the entire company and observes and documents all activities (as the earlier example of coffee brewing). It can be difficult to "step out of yourself" and look at familiar surroundings with new eyes. But that's what it takes to see the value and the waste. Here it will help if colleagues from other departments follow the activities in your department, watching and asking “stupid questions” and then document it all. The Value Stream analysis is about documenting what happens to the information and materials as they are converted into a product. To sum up, it’s hard to see any "waste" when you observe the work in progress. But by mapping the entire value stream you can later return and evaluate it based on the question, "does this create value for the customer?" A value stream describes all the activities and processes required to produce a product (or service). Because there are many different types of products there will also be many different value streams. In principle, there is one value stream for each product or service. This also means that if the company offers 7 products then the company will have 7 value streams. They might share some processes along the way but if the products are different then the value streams are different. Lean is basically about creating flow in all activities and between all activities. The Value Stream Mapping identifies if there is flow and whether there are detours, obstacles and stops along the way. Therefore, the Value Stream Mapping is all about finding and removing those stops, detours and obstacles – the non-value adding activities (muda). This will eventual shorten the time from the moment the customer has ordered a product (or service) to the moment this product is delivered. 105

Even though the concept of Value is essential in Lean Thinking (Womack and Jones 2003) “Value Stream Mapping” mainly focuses on the time aspect – the overall lead time (L/T) and the identification of wastes along the way. ORDER

TIME LINE

CASH

(Reduce by removing non-value-added wastes) ”All we are doing is looking at the time line. From the moment, the customer gives us an order to the point when we collect the cash. And we are reducing that time line by removing the nonvalue-added wastes” (Ohno 1988, p. ix)

A complete value stream includes all stages in the creation of the product, including suppliers, sub-suppliers, and contractors and to any other companies that might continue working on the product after your company has completed the delivery. Thus, a value stream is equal to a supply chain. However, if we are to analyze the value stream within our company by making a Value Stream Map, it would be impossible to include all activities and processes in just one Value Stream Map. We have to choose a specific slice of the total value stream. This could be the proofing process, the order processing, the billing process, the production process (the whole production process or a partial production process). The Value stream mapping must be carried out in practice, by physically walking through the whole flow from sales to distribution, where, for instance, you follow an order's way through the company. Make a note of how information flows from the customer, through the sale, calculation, order planning, production planning, procurement of materials, prepress, plate production and all the way to the finished product delivered to the customer. Take time on the various activities such as transport of plates from prepress to press take time on a setup, and notes how the Press Operator works and how far he should walk to pick up ink, paper, plates, etc. The goal is to get a totally objective overview of how information and material flows through the company. At this stage there must be no defensive discussion about why things are performed in just this way. The activities must ONLY be observed and recorded. When the entire value stream is mapped you should hold a meeting with all the involved employees where the value stream map is presented and analyzed. The aim is to achieve consensus of "this is how it’s done" There will likely be disagreements, dissatisfaction, criticism and defensive argumentation. There will be explanations (defense speeches) from individuals; "Well, it was because the apprentice emptied his Cola in the machine." But this is part of the learning process you may call "learning to see". It’s possible that we have to go back once again to observe an activity or to record it on video, to achieve consensus.

106

At the same time, we must remember that there will be many different value streams, depending on the product type and involved processes. Thus, it’s possible that we need to make two or more value streams to identify our assumptions.

107

How to begin the Value Stream Mapping The idea is that you start by defining the customer and the product (or service). Since the value stream mapping primarily focuses on the time aspect (delivery time, the time of each activity and the time between activities) and defining where the waste is hided, you should only use this VSM-tool if your goal is to reduce the time line and reduce waste. When you are about to draw a value stream, it’s important that you use the current de facto standards for icons, systematic and structure in the value stream drawing. Otherwise, e.g. professional Lean consultants or experienced Lean employees cannot obtain an overview and therefore cannot understand how this value stream is structured.

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L/T

Lead Time. The time it takes one product to move all the way through a process or through the value stream.

C/T

Cycle Time. How often a product is completed in a process, as timed by observation. Also the time it takes an operator to go through all their work elements before repeating them.

C/O

Changeover time. The time it takes to switch from producing one product type to another

V/A

Value-Adding Time or Value-Creating Time. The actual time within a process and within the lead time where the value is created. You might use 85 minutes in this process but the actual processing only takes 13 minutes.

(VCT)

This is an external company. The customer, the supplier and the sub-supplier. The customer symbol shall be placed in top-right and the suppliers at the top-left This shows the transport from the external companies to your company and it shows your delivery to the customer. If this transport is by ship or plane, then you should change the symbol to a ship or plane. This is an internal process/activity. You will need one “Process box” for each process. If a process consists of more than one activity and if these activities is going on in an continuous flow then you can keep it in one box. But every time there is a stop you will need a new Process box. This is a symbol for Inventory, including the ”work-in-progress” between the processes This show one employee / one operator. If a process has two or three operators then you will have to draw two or three of these operators. This shows physical/manual information. This could be orally from one person to another, a telephone call or some kind of physical order form, letter, printed mail or other. This shows an electronic information. This could be the same as above but in an electronical form. This shows movement of physical goods to the customer or from the supplier to your company. It symbolizes that the goods are moving due to a Pull-function. Because someone has asked for it. This shows movement of physical goods between processes. The work-in-progress that is pushed to the next process before they have asked for it. This symbol is called ”go see” or “go see scheduling” It’s only used where visual and informal data collection can be used. E.g. a visual count of inventory or other things. This symbol shows a shelving with shelves symbolizing a ”Supermarket”. It’s to be used between processes when a “Just-in-time” / “Pull-function” is established. The supermarket is used in connection with Kanban (See Rother and Shook 2009, p. 40) This is a Kanban-card. (See Rother and Shook 2009, p. 40) Withdrawal (See Rother and Shook 2009, p. 40)

109

Beside most of the symbols from the previous page the drawing of the Value stream must contain four other central elements: •

• • •

An Order Reception box / Production control box (Placed in the top-center). This is the internal control room in your company A number of Process boxes A number of Data box A Time Line, that shows the Lead Time and the Value-adding time (in minutes)

You begin by taking a large sheet of paper or a whiteboard. 1. 2. 3.

In the upper right corner you place the customer. In the upper left corner you place your suppliers and subcontractors In the upper center you place the sales function and Production planer function

PROCESS BOX 1

PROCESS BOX 2

PROCESS 3

You start by renaming When someone picks up the Process Box with the the work in progress you name of the activity to be The triangle symbol- start a new Process box. performed. izes the Work In You then give a short Progress (WIP) description of the inventory and the process that is performPush-arrow symboling this specific task. izes that Process 1 You put in a symbol pushes the WIP on describing how many to the next process employees engaged in before they are this activity. ready to continue. If the processing or the work stops then this The total amount of Process Box stops and time that the WIP you move on to the next. waits here is written below. 1 1 This includes, nights, weekends and holydays.

DATA BOX 1

C/T: C/O: L/T: 240 min. V/A: 120 min Lead time: Value time:

240 min 120 min.

If the WIP is placed here on Friday at 4 PM and the next process picks it up at Monday at 10 AM it’s a total of 66 hours or 3960 minutes

3960 min.

PROCESS 4

1

DATA BOX 2

1

DATA BOX 3

DATA BOX 4

C/T:

C/T:

C/T:

C/O:

C/O:

C/O:

L/T: 180 min.

L/T: 365 min.

L/T: 30 min.

V/A: 25 min

V/A: 0 min

V/A: 0 min

180 min.

1000 min.

25 min.

365 min. 0 min.

1650 min.

30 min 0 min.

Figure 26a: The Value Stream Map

The total lead time is 7,425 minutes or 123.75 hours. The total value-adding time is 145 minutes or 2.4 hours. Thus there are only 1.9 % value-adding activities and therefore 98.1 % Muda (waste or non-value-adding time). Here there’s really something to work on. The largest room on earth is the Room for improvement. To learn more on this topic, read Learning to See by Mike Rother and John Shook. 110

Figure 26b: Principle sketch of the Value Stream Map made in Microsoft Excel

111