The source of the stream

by Mark Gooch, Simpler Consulting

During a candid meeting with a group of executives of a company that has been doing Lean for three years now (with, to their view, “spotty” results), a division president asked, “Is there a point that a lot of activity is just too much?”

I sat there for a minute trying to evaluate if anyone in the room had an idea, but no glimmer of an answer appeared in anyone’s eye, nor could any hope be perceived on anyone’s face. So, I began my journey, first delving into the “spotty” results question.

1. Have you completed a value stream analysis for your business?
   Answer: Yes.

2. Are you doing events/activities inside your plants or businesses that are not on the value stream or you cannot tie to the value stream?
   Yes again.

3. Pause for a moment, again looking for the epiphany I hoped would come.

4. Do I need to respond further?
   Yes! (I assumed this was a rhetorical question, as I thought that some of my past work might have lasted a little longer than last month’s meetings, or that it might resurrect itself now. It did not.)

Value stream levels
Let me dig a little deeper into my first article on the topic of value streams and the four to five primary levels. As a quick update, there are four or five primary levels of value streams to be considered:
    1. Enterprise level
    2. Business unit level
    3. Plant level
    4. Product line level
    5. Operating unit or cell level

As these value streams are analyzed (VSA) and a transition plan developed, very focused actions need to be identified, scheduled and carried out. These actions, usually Rapid Improvement Events (often called Kaizen Blitz events), must be tied to the value stream (VSA) via metrics and prescribed outcomes.

As an example, a manufacturing RIE may be focused at reducing the in-house manufacturing cycle time 50 percent, improving productivity 20 percent and reducing WIP inventory 75 percent.

A second event focused at production scheduling may target reducing the number of handoffs required to change or approve a schedule update by 90 percent, reduce cycle time required to produce and publish the new schedule 60 percent and eliminate 50 percent of the schedule generations annually. (These numbers may seem very large, but not unreasonable for a typical event.)

Metrics and goals are tied directly to the improvement of the value stream that has been developed and targeted for improvement. They are the contributing factor that will deem the transformation successful or not. As these events are identified, they should also be evaluated to their connection to multiple, cross functional value streams competing for the same limited resources.

Where is your focus?
The next thing to consider is what level in the company this VSA is focusing on (note the five levels above). If all VSAs are focused at the cell level, that cell may experience great improvement, but they are not coordinated within the total organization. In other words, the cell may be performing better to the new direction and performance metrics, but the company has been sub-optimized.

In fact, cells that may receive shipments or parts from the improved cell may be far worse than before since they now are getting parts in a single piece flow delivery, yet they are still operating in batches. Now they are constantly shutting down, waiting on “batches” of parts so they can produce in their existing world. What was good for cell No. 1 has created havoc and negatively impacted performance in the receiving cells.

Where’s the customer?
A second issue about value streams that intersect but are only viewed from a lower level in the organization is losing the customer-through-supplier connection. If just the lower level cells are being dealt with, as improvements are made in flow (single piece flow is introduced inside the cell and parts begin to flow with no interruption; continuous flow), the supplier may be left in the cold — not tied to the progress.

When this occurs, the improvements inside the cell are not realized for total inventory improvement since the ordering methods remain unchanged. The cell is not producing daily requirements daily, yet forgings or raw material is still arriving weekly, monthly or perhaps quarterly. Total gains are not recognized or reached.

Worse yet, if the supplier is still being measured to MRP dates and original PO dates, they may well be rated as delinquent, expedite fees may be invoked and premium transportation authorized or demanded to get material to the plant that in reality is not needed for weeks or months. Larger material storage areas are still required, surplus and excess material is being generated and longer introduction dates for engineering changes are still required. What a missed link!

This highlights the need to focus and use the VSA at the proper levels of the organization. As a business matures in the transformation process, the move to higher levels of Value Stream Analysis is required.

How much is too much?
A second look at the question is directed to, “Is there a point that a lot of activity is just too much?”

My answer is activity for the sake of activity is very seldom productive. What do you want, activity or results? I hope that is indeed rhetorical for you.

Once the question is addressed as to what the activity is tied to and how is it being gauged or measured, I focus on determining if the activity or the results of that activity are being sustained. There is usually a myriad of reasons for not sustaining performance, but most often it is because the organization has not yet adopted Lean as the new way of doing business and there is no follow up to the standard work that should have been developed and implemented in the event week.

I will deal more with this later, but in short, the application of (1) standard work, (2) the use and monitoring of production boards which gauge results and point to the need to adjust or maintain the course of action, and (3) the cause-effect and corrective action methodology are the three primary, (and in my experience) most effective drivers to sustaining the gains in any transformation. 

Mark Gooch has held senior level positions with GE Aircraft Engines, Goodrich Aerospace and Williams-International. He has worked with operations ranging from 15 people to organizations of 30,000. Contact Coach Gooch at ; E-mail: . 

This article appeared in the April/May 2006 issue of MRO Today magazine. Copyright, 2006.

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