How Does Shop-Floor Lean Compare to Lean Product and Process Development (LPPD)? A Q&A with Matt Zayko

I have 15 years of lean experience on the shop floor. Recently my organization’s product development leader was let go and the very next day they told me I would be taking over for him. I’ve never experienced the work that goes on in that department, so all I have to go on is my lean experience. Is my knowledge of shop-floor lean enough for me to get by in product development?

Absolutely. The approaches are different, but the concepts are the same.

The first step in grasping the situation for a customer is to define the purpose for a product that you provide for them. This will also help determine the actual “unit” that you’re going to use later to track your value stream effectiveness. In both approaches, that usually comes from identifying the value from the customer’s perspective. In traditional lean we will look at all the steps involved in creating and delivering a specific product, from raw materials to shipping. In LPPD it’s a little trickier at first, because there are steps that we as engineers know will create useful knowledge for value, but the customer (or other internal functions/areas) may not understand. For example, consider doing multiple learning cycles early on to determine the best parameters and process for developing the specific product; the learning cycles could be viewed as waste or re-work if we are not careful to understand the output value of the process. But what it all boils down to for both approaches is identifying the value from the customer’s perspective, whatever it may be, and designing a value stream that best delivers that value.

The next concept is, “What is the actual work to provide that value?” That’s where you look at the value stream. The value stream in product development is very different, but follows a similar pattern as for manufacturing. The difference for LPPD is that you may have to account for numerous functions spread across multiple locations and time zones, a timeframe of a year or more, knowledge flow, experiments, etc. In LPPD, there are typically two high level phases within the value stream: learning and execution. The learning phase is about generating useful knowledge as you converge to an optimal design concept, and may have multiple learning cycles. The execution phase is about configuring and detailed engineering. An LPPD value stream map will be much more detailed than a manufacturing map, since the timeframe for the latter might have a range in days or weeks instead of years. The framework for value stream mapping in LPPD that Jim Morgan pioneered in early 2000s, is very close to what we use for mapping in manufacturing, and that is what Jim based his method on for LPPD mapping from the 1998 LEI workbook, Learning to See.

Once you actually understand the work, the next question is how do you make that work flow? That’s rather straightforward in shop-floor lean. We shrink batch sizes. We get rid of inventory. We reduce process times. We get rid of any distractions or interruptions to the value-add flow. We add standard work for stability. In LPPD, we do similar activities, but to the flow of knowledge and information. We do staggered release of information. We focus on moving the information faster between process steps with minimal delay. We avoid handoffs, where possible. We aim for repeatable routines at process steps at a standard cadence.

Once you’ve identified how to get the work flowing, you need to figure out how the work should be done for maximum quality and efficiency. An important concept in this step is standard work, which again is very straightforward in factory lean. In LPPD it’s another story, because experiments and tasks are traditionally done at the engineer’s discretion. It’s tough to hand an engineer standard work and say, “This is the known best way to make this prototype” when the given prototype has never been conceived. But the underlying questions in establishing standard work are the same for both factory lean and LPPD: What’s the sequence of work? What are the critical quality points? What are the important safety points?

The last question is really, what’s the best management system to improve and manage the work? Between factory lean and LPPD the available tools and techniques are similar, but the timelines will be different. You might have a visual tracking board to record data on a cycle-to-cycle or hour-by-hour basis in the factory; in LPPD that same visual management board might record data on a daily, weekly, or monthly basis to reflect longer cycle times of work tasks. A dedicated obeya or “big-room” space is recommended for a LPPD team as a critical enabler for a cross-functional team to visually manage their process in order to highlight normal from abnormal.

So in conclusion, it is a logical progression for a person who has deep experience in lean transformation on the factory floor to move upstream in the LPPD space using concepts and thinking that were honed on the production floor. This person will have a higher chance of success if he or she is able to have a flexible approach for applying the concepts, as well as an appetite for learning in a very challenging (yet highly rewarding) LPPD environment.

Innovative Companies Continue to Learn from Each Other: Fall 2016 LPPD Learning Group Event

What do a sub-sea oil and gas firm, a household-name appliance maker, a premium sound company, and an iconic industrial and contemporary furniture design organization have in common? With a combined 386 years of existence, FMC Technologies, GE Appliances, Bose, and Herman Miller all have a mutual desire to learn and improve for long-term survival and success. And one shared area of interest for these leading companies is improving the value that they provide each customer starting with new product and process development.

LEI’s Lean Product & Process Development (LPPD) initiative was formed to bring together forward thinking organizations like FMC Technologies, GE Appliances, Bose, and Herman Miller to accelerate the spread of lean thinking and practice in product and process development across very diverse industries. These organizations engage in the LPPD Learning Group partnership with the purpose of transforming their product development systems by changing the way new value is created. And a valuable aspect of the Learning Group is the ability for each of the organizations to come together and meet two times per year with one of the companies acting as host.

Recently, the Learning Group convened their Fall 2016 experience at FMC Technologies in Davis, CA for one and half days in mid-November. Twenty-four people from the four companies actively participated in the session.

Andy Houk, Vice President of New Product Development for FMC’s Schilling Robotics Division, welcomed the learning group to Davis, the headquarters for the division. The Schilling Robotics team designs and manufactures world-class remotely operated vehicles (ROVs) and manipulators for some of the most isolated locations on Earth, serving the critical energy sector for deep-water productivity.

After introductions, LEI LPPD Senior Advisor Jim Morgan stated that this was the fourth LPPD Learning Group event. The group is diverse but has common challenges, and learns from sharing and discussing the failures and successes in an open and safe environment. The theme for this learning event was “people.” As Jim stated, “processes don’t develop great products, people do.”

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Jim introduced the agenda with the following conceptual and experiential activities that were planned for this learning group meeting:

  • LEI’s Lean Transformation Framework (LTF) in LPPD with John Shook
  • The Leader’s Role as a Coach and the Chief Engineer with John Shook
  • Gemba visits to FMC’s Rapid Prototyping Area, Valve Subassembly, and Testing Area for Gemini
  • The Concept Paper and its role in LPPD with Jose Ferro
  • Concept Paper examples from FMC Rio and FMC Schilling
  • Obeya Concept for LPPD with Jim Morgan
  • Gemba visit to FMC Daily Product Huddle Obeya Area
  • Obeya learning discussions from Bose, Herman Miller, and GE Appliances
  • Obeya examples for New Product Issues Management and Strategic Planning
  • A3 Thinking and Management with Eric Ethington
  • Gemba visits to Multiple Product Development Obeya Areas at FMC Schilling
  • The Importance of Leadership Mindset & Basic Thinking with John Shook

Below are highlights from select portions of the learning session.

Learning Topic: LTF & Leader’s Role for People Development from John Shook

John Shook, LEI’s CEO, led the discussion of the LEI Lean Transformation Framework (LTF) in LPPD and the leader’s role as a coach. The Lean Transformation Framework was developed based on his 35 years of direct experience working in this area.

shookltf

The leader’s role in the LTF is to develop people. And the best way to develop a person is while actually doing the work. John stated that the Toyota Chief Engineer system was leading without power, but by skills of true leadership.

Go & See: FMC Gemba Areas, Round 1

In the rapid prototype area (RPA), teams were able to see three levels of prototypes that FMC Schilling Robotics used for fast learning on Manipulator Arm design.

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Learning Topic: Concept Paper Sharing by FMC Brazil & FMC Davis

Jose Ferro of LEI Brazil and Fernando Rodrigues of FMC Rio led this discussion of an important LPPD tool used by the Chief Engineer—the Concept Paper (CP).

ferropaper

Jim Morgan reminded the team that “lots of conflict goes in to making a great product,” and the CP can help to focus the challenges and discussions for development teams. Fernando Rodrigues shared his learning with writing a Concept Paper and using it as a “game-changer” for the new Connector Program at FMC Rio. John Drogosz (LEI LPPD Coach) facilitated a concept paper reflection.

Learning Topic: Obeya Concept with Jim Morgan & Organizational Sharing

Jim stressed that obeya was about driving better collaboration and communication by bringing people together with use of this tool to support visual management. The entire learning group took a gemba visit to the Gemini testing obeya site to experience the daily performance-to-plan review in that area.

obeya

Learning Topic: A3 Thinking and Management

On day two, the group started with a business case and exercise related to A3 Thinking and Management from Eric Ethington, LEI LPPD Program Manager. Each participant had been asked to bring his or her own A3 to the session. In pairs, the participants practiced both sharing and coaching A3’s. This reinforced key learnings of the A3 as a process to develop people, on the job, while effectively engaging others to solve problems.

a3

Go & See: FMC Gemba Areas, Round 3

The participants had a great opportunity for three more obeya visits for Gemini product development in these FMC areas: Gemini Obeya, “Spinal Cord” Hardware/Software test bed, and the Software Simulator. 

Learning Topic: Leadership Thinking & Mindset with John Shook

John focused on basic thinking of leaders. The power of the Toyota Production System is that it forces people to see problems quickly and solve them immediately. This basic, underlying thinking that is clearly understood and is critical for consistent values and actions throughout an organization.

In closing, Jim Morgan encouraged the group to continue to reach out to each other individually across companies to share more specific learning.

The next Learning Group meeting is tentatively scheduled for the spring of 2017. For more information on joining the LPPD Learning Group, contact Eric Ethington, LPPD Project Manager and Senior Coach at eethington@leanpd.org.

You Can’t Manage a Secret

Takeshi Uchiyamada had a problem. He had just been named Chief Engineer for arguably the most revolutionary product in Toyota’s history. The goal for this program, initially identified as G21, was to achieve nothing less than 1.5 times the fuel economy of Toyota’s best small cars and develop it on an extremely compressed timeline. To make matters worse, Mr. Uchiyamada lacked the technical depth required to develop and commercialize the advanced hybrid technology that would be required. In fact, no single person at Toyota did. He quickly realized that he would need an unprecedented level of collaboration, transparency and speed of decision making to make this program a success.

Consequently his first pathbreaking innovation had nothing to do with engine technology. Recognizing that his job would be to effectively integrate the efforts of diverse experts and keep the project on track to achieve no compromise targets for performance cost and schedule, he created the “obeya management system.” In this system he met every two to three days with all required technical experts in a room in which all pertinent information was posted on the walls. This information was available to everyone on the team at any time. The G21, which the world has come to know as the Prius, went on to revolutionize the auto industry, dramatically raising the bar for fuel economy and leaving competitors years behind. And the obeya system, credited with making a major contribution to the Prius success, became a development staple at Toyota.

I first heard this story nearly 18 years ago while meeting with Mr. Uchiyamada during my research at the University of Michigan. At the time he was working with a team of Toyota engineers who were tasked with standardizing and teaching obeya throughout the Toyota development community. Obeya, of course, is a Japanese word for big room referring to the large open room required to house the functional technical experts required on the Prius program. Obeya, of course, is a Japanese word for big room referring to the large open room required to house the functional technical experts required on the Prius program.

The challenge to the Toyota team was to capture this powerful system for collaboration and transparency without the ability to co-locate all program teams.

They described the system basics as:

1) Engineers are not co-located. The Functional Engineering Staff Leaders meet with the CE on a varying cadence.

2) Paper-based visual management is the key to effective communication. The walls are plastered with important program information including information on design alternatives, test results, status to attribute performance targets, cost status, status to schedule, and supplier readiness levels. The team walks the walls at regular meetings and sub-teams meet there often between meetings.

3) The obeya location moves with the program. Starting in Engineering, moving to prototype and finally to the plant for launch, the cadence of meetings also change as the program progresses. Typically increasing in frequency to daily meetings as the program moves to launch. For a fuller treatment of both the Prius program and obeya history you can reference the Toyota Product Development System.

During my visits to Toyota City earlier this year I saw that obeya at Toyota has continued to evolve through careful PDCA. There were innovations such as adding CAD and simulation capability in order to facilitate real-time design discussions. But the heart of the system remains visual management and the intent to improve communication, transparency and cross-functional integration in order to quickly identify and solve problems.

Transparency and collaboration were also the essence of Alan Mulally’s message at Ford when he said, “You can’t manage a secret” (and I would add, “…and you can’t solve a problem you’re not aware of.”) He challenged us to increase honest, fact-based communication and improve cross-functional collaboration across the enterprise. One of the ways our team responded was with an “obeya system.” Obeya was not only used to manage program performance, but also to integrate cross-functional teams, as well as to help manage the global functional engineering business, in the creation of the global product development system (GPDS).

I was reminded of these experiences when our LPPD Learning Partner companies came together to learn and share their outstanding work in Davis, California last month. While experience levels and specific practices varied across companies, each company was experimenting with obeya and all reported performance improvement. Several teams reported “best ever” results. In our subsequent discussions we learned many nuances of how they were each leveraging the power of obeya. However, all of them found that the real benefits of obeya were in transparency, speed of problem resolution and team engagement.

So the next time you are tempted to get drawn into circular arguments about what metrics or graphs to share, where they should be placed in the room, or even if obeya should be spelled with one O or two (yes, I have actually heard that). Think about Takeshi Uchiyamada, Alan Mulally, our learning partner companies and the real purpose and power of obeya. Consider: how can you best leverage obeya to better engage your entire team and dramatically improve your performance?

PS:

 

Join us at the 2017 Lean Transformation Summit in Carlsbad, California! Eric Ethington and I will be sharing a variety of LPPD experiences as well as details on how the learning partnership works to accelerate your progress at a pre-conference Open House. Also, FMC Technologies, one of our learning partners, will sharing their experiences with LPPD in a breakout session.

We had a fabulous day at the University of Michigan Hospitals last week. Together we identified many opportunities to apply LPPD to improve patient-centered care and deliver ever-better value. This promises to be an exciting frontier for LPPD.

It was great to see the teamwork developing across our partner companies at our most recent learning event. Each company was sharing openly and supporting the progress of the others. Topics included our Chief Engineer concept paper, enterprise transformation, obeya and A3 for developing people. Our LPPD learning partner model continues to evolve and become more powerful. LPPD senior coach Matt Zayko will be writing up and sharing the event more fully on our site leanpd.org.

When Lean Gets Personal

I was dreading the next eight weeks. Multiple surgeries at the University of Michigan Cancer Center had finally rid me of most of the sarcoma cells whose discovery had so worried my family and completely upset my intense and demanding life as a Ford executive. But treatment wasn’t over yet, and I just knew the worst was yet to come – eight weeks of daily radiation treatments. In addition to normal treatment concerns, I envisioned forty very long days of searching for parking spaces, repeatedly filling out mind numbing forms, wasting away in crowded waiting rooms, inexplicable appointment delays and generally more frustration than Windows Vista.

But I couldn’t have been more wrong. My initial consultation put my mind at ease and I sailed through appointments experiencing a precise, efficient and ultimately successful treatment regimen that was patient focused and professional through every step. And this was no accident. It was the result of many months of lean work by Department Chair, Dr. Ted Lawrence, Director Kathy Lash and the rest of the Radiation Oncology team.

Together they used value stream mapping to improve flow and significantly reduce lead times. Their teams used rigorous A3 problem solving leading to root cause-based countermeasures and powerful standards and checklists that helped to create a consistent, high-quality experience for each patient.

And perhaps most importantly, they had leaders like Ted and Kathy who lived and consistently communicated patient-centered care from the patient’s first consultation to the department wide applause as patients ring The Bell celebrating the conclusion of their treatment regimen.

Following my cancer experience I had the privilege of participating on a team commissioned to further enhance the Center’s performance through a “patient centered care” initiative. Through this work we were able to support the dedicated professionals who worked tirelessly to find a “better way.” This experience allowed me to learn about all the great work going on more broadly in lean healthcare. But perhaps most importantly it enabled me to meet with other visionary health care leaders like Dr. Jack Billi, who gave the best advice possible to an engineer newly diagnosed with cancer (N=1) as well as incredibly talented administrators like Linda Larin, whose excellent book, Inspired to Change, is impacting the way medical professionals think about health care.

Additionally I learned that the very best health care organizations are thinking about how to be “lean” from the very start of facility and process design. Identifying how they can make step change improvement in patient-centered, health care performance through the application of LPPD principles and methods from concept development forward. In some cases, like Baris Lostuvali and Cathedral Hospital in San Francisco they are applying LPPD to the management of new facility construction. Others like University of Michigan, Akron Children’s Hospital, Stanford and Virginia Mason are going even further by involving both staff and patients through basic 3P techniques and designers in “seven ways” exercises up front in facility design and construction.

While much progress has been made, recent visits and discussion with health care professionals made clear, there is still tremendous opportunity.

Rapidly changing technologies, new interventions, shifting demographics, and constraining regulatory requirements are combining to create an ever more challenging and dynamic operating environment for health care providers.

An environment in which facilities designers, clinical designers and health care leaders will increasingly find themselves with significant product and process design challenges where the decisions they make may resonate for many years to come. One in which concepts, methods and tools from LPPD like improved design reviews, front loading, compatibility before completion (CbC), rapid learning cycles and the creation of new patient-centered value streams will be invaluable.

Will LPPD enable health care providers make the kind of dramatic improvements that it has done in other industries? I guess we’ll see. We intend to do the experiment. Because in addition to all the macro reasons that it is crucially important, in the end, healthcare is intensely personal.

I remain cancer-free, and my family and I are forever grateful to my surgeon Dr. Sybil Biermann, Dr. Ted Lawrence, Kathy Lash, Dr. Jack Billi, Dr. Kuzan and so many others at UMHS not only for their incredible professional skills, but for their willingness to explore, experiment and work to continually improve performance for the patients sake. And while my experience turned out well, remember here too N=1. There is still so much more to do and the work is so important.

How Do You REALLY Put Yourself in Your Customers’ Shoes? A Q&A with Eric Ethington

I’ve read about auto engineers driving their companies’ newest vehicles for months seeing how many heads turn, what passersby think of its features, etc. My company doesn’t make cars, so what are some non-product-specific ways of REALLY putting yourself in your customers’ shoes?

Good question. This isn’t so much about what you make or the service you provide; it is more about either:

  1. Experiencing your product in the same manner your customer does, or
  2. Observing your customer experiencing your product in its intended environment

and then recording the experience in terms of useful data. You should pay particular attention to the motion of the customer’s eyes and hands as they interact with the product. Is this interaction simple and elegant, or frustrating and clunky? Write down what you observe, both good and bad. Then later on you can look over your notes and try to understand WHY things did or did not go well (Hint: if your answer involves a perceived deficiency in your customer’s skills you are on the wrong path!)

Let’s look at an example. Most all of us have used those point-of-sale credit-card scanners. They should be easy to use, right? Just swipe, sign and hit “OK” – or something like that. But if someone were to observe the customer using them they might notice:

  1. Repeated swipes (the card was in the wrong orientation)
  2. Swiping when the “chip” should be used – or visa versa (not clear which is functional)
  3. Having to sign twice because the signature was accidently cleared (some devices have the OK button to the right of the signature and the CLEAR button to the left; others have these reversed; the first scenario is more intuitive as the pen is on the right side of the display at the end of signing

pos system

If YOU are experiencing your CURRENT product versus observing the customer, be sure to avoid any “perks” or “favoritism” that you usually enjoy.  If you work for a bank, you’d want to go to a branch where people do not know you so that Joe doesn’t compensate for that form you filled out incorrectly. If you make computers, obtain yours through the sales channels your customers use, not through the employee benefits program that comes with special pre-installed software. Or if you work at a medical center, rather than going to your colleague to schedule an appointment, call the general phone number someone in the public would and experience what happens.

One final point of observation that applies to physical products, but even more so to services: Are there a lot of labels and signs? Question the need for every sign – or better yet, perform a 5-Why on the sign and use what you learn to improve your service or product.

At my gym, for example, there are labels on the bottles of hairspray and deodorant that say, “Do not throw away, we refill.”  Unfortunately, the management at my gym is not asking the question you just posed about the need for signage. There is a simple solution to their problem – and it is not a sign. If only the management actually worked out at the gym…

Get Leaner, Greener Value Streams from Product Development

The principles of lean product and process development (LPPD) take companies to a higher level of cross-functional collaboration that creates the very best product and end-to-end value stream possible, rather than just completing a development project on time and on budget, according to James Morgan, PhD, senior LPPD advisor at the nonprofit Lean Enterprise Institute (LEI). Click here to read his new article on this topic, as published by the Society of Automotive Engineers.

Kelly Singer

Kelly Singer is managing editor of the blog, LeanGreenInstitute.com and is based in Paris, France. She is passionate about harnessing lean thinking to help both industry and the planet to flourish. Recognized as one of the leading experts on Lean and Green, she conducts workshops, presentations, and research around the world. Previously, she was an entrepreneur in the health and environmental sector and director of operations in Seattle.

Green from the Start

Kelly Singer: How do lean and green companies approach sustainability differently?

James Morgan: Lean and Green companies think about their impact on the environment from the start.  Instead of just thinking about an end “green” goal – like a recyclable or biodegradable product, they think about how the entire value stream can become green.   They realize that not thinking green from the start will result in unnecessary rework, additional expenses, delay going to market and worst of all – missing an opportunity to minimize their environmental impact by waiting until it’s too late in the process.  But I think most importantly, lean and green companies are acutely aware of their impact on the environment – and know how much more effective they can be with better cross-functional planning.
KS: What is cross-functional planning and how does it relate to lean and green?

JM: An important lean principle that helps improve cross-functional planning in the development process is “compatibility before completion,” and it is a critical part of lean product and process development (LPPD). In fact, it is fundamental to creating lean and green value streams.  This is the practice of building compatibility checks into your development process to ensure that designs are compatible with all system requirements right from the start.  These requirements often include interdependent parts, manufacturing requirements, quality, serviceability, and of course, environmental impact.  And these requirements must be met before moving forward in the process to production.

It’s about moving beyond just a focus on “how do we complete this project on time and on budget” to “how do we align our individual processes and systems to create the best product – in fact total value stream possible”.  And it’s about collaboration not siloed work.  It results in minimizing the rework of late changes, reducing workload, and shortening overall lead-time.  This creates less waste and optimizes your value stream – and that means less impact on the environment. When you consider the impact that the waste of many current products and processes have on the environment … it’s kind of scary … and it should make us all eager to change because that waste is preventable.
KS: During your tenure as Ford’s Global Director of Body Exterior, Safety, and Stamping Engineering, you were a leader in Ford’s historic turnaround. One of the key accomplishments was the new, aluminum F-150 with eco-boost engine. How was Ford able to create the world’s most successful eco-truck?

JM: I was indeed privileged to be a part of the historic turnaround at Ford during which CEO Alan Mulally rallied the company around a simple goal: create new products that our customers want and will buy. During this time the company delivered both the products and the system that fueled a transformation that not only made Ford profitable again, but an innovation leader in the automotive industry. I was at Ford for more than 10 years and it had a big impact on my thinking and development as a leader – largely due to the outstanding leaders I worked for.

When you think of environmentally friendly vehicles, trucks probably aren’t the first thing that comes to mind. And we wanted to change that. Bill Ford’s commitment to the environment is well known. Trucks are an integral part of life in North America and a critical part of Ford’s product portfolio. So this was a very big idea – and even bigger challenge. In order to replace the huge eight cylinder behemoths that usually powered competitor’s conventional pickup trucks with the super efficient, award winning, six cylinder eco-boost engine and deliver the same or better performance for our customers, we had to take massive amount of weight out of the vehicle. This required innovation and collaboration on a massive scale – and a very big dose of Compatibility Before Completion … and we were successful. Not only does the new F150 have significantly improved mileage (the F150 EcoBoost still has the highest EPA-estimated fuel economy ratings of any gas-powered light-duty pickup), it is also best in class for many critical truck performance attributes – and consequently is the best-selling vehicle of any kind in North America.

What’s more, it is the only truck on the planet to achieve the highest possible safety rating. But there is another important part of the story.  Our team thought about more than the product – we thought about the entire product value stream collaborating between design and manufacturing to make our material utilization some of the best in industry – and also worked with our aluminum suppliers from the very beginning of the development process to create an efficient recycling strategy so the aluminum can be melted down and re-used.

Our vision of success was bigger than just creating vehicles that people would buy. It was about progress and innovating a product in ways never before thought possible to create an ever better total value stream.
KS: You recently toured Toyota headquarters in Japan to learn more about how the company is adapting and improving their LPPD Systems.  How are they applying LPPD to meet their big environmental goals?

JM: Jeff Liker, with whom I co-authored “The Toyota Product Development System,” and I spent about a week at Toyota HQ, their test facilities, engineering center and manufacturing plants. Toyota’s commitment to the environment is just incredible – and it shows up throughout the organization. Waste of any kind is abhorrent to them – it is part of their DNA so to speak. Whether it’s in smaller projects like reusing old Prius batteries for power storage in their facilities or massive, long term projects like the Mirai fuel cell vehicle and working with various governments to create a “hydrogen powered society,” Toyota is constantly thinking green from the start and taking a total value stream approach to protecting and improving the environment.

A more typical example I saw during our visit to Toyota was how they went about their effort to reduce vehicle weight to increase fuel efficiency. This is called light-weighting, and it’s a growing trend in the industry. The interesting thing at Toyota is not just that they’re making lighter vehicles but their standard process for doing it.

One of the typical ways to reduce weight is to utilize thinner, high strength steels. By doing this, companies are able to not only reduce the individual part’s weight, but often reduce the number of parts required. The problem with this strategy is that these materials often have to be formed in a superheated state that requires enormous gas fired ovens that work in very large batches and require loads of time to heat the material. This process also produces an oxide residue on the parts which must be shot blasted off after forming.

None of this was acceptable to Toyota – so design engineers, manufacturing engineers and Toyota suppliers collaborated in order to deliver both a lighter, more fuel-efficient vehicle and a much better value stream. The result was not only a better product, but a remarkable joule heating process that requires only two meters of space instead of more than 30, can heat material one blank at a time in five to 10 seconds instead of huge batches, delivers a two-thirds reduction in CO2, and does not produce any residue and needs no extra operations.

I think this is an excellent example of what LPPD is all about: cross-functional collaboration, learning, and innovating product and process development to deliver solutions that maximize value to the customer and the environment.
KS: What makes an effective lean and green leader?

JM: I believe that leaders get the culture they exhibit and tolerate. I saw this with Alan and other great leaders I had the good fortune of working with. And often their priorities become clear to the team not so much by what they say – but what they do. How they spend their time. I can tell you that one of an executive’s greatest challenges is to find time. You are under tremendous time pressure. The only way sustainability will work is if it’s an inseparable part of their company’s processes and products – and a leadership priority. I always try to remember that time will make the decision if I don’t. Sustainability is not something we can be passive about anymore. It is not a “sometime thing” – it has to be part of the way we do our work every day.

It’s like Compatibility Before Completion – it has to be embedded in the way work is done. Leaders must live their values and align their team and business practices. Effective lean and green leaders never lose sight of the big picture because anytime you create a product, you are literally creating the future. Certainly for your company, if not for millions other people. A leader has to ask themselves – what kind of a future do I want it to be?

Focus Your Operating System To Bring Your Strategy to Life

While I hear a great deal from companies these days about how their latest initiative will create greater “organizational synergy,” what I actually find is nearer to “organizational antagonism” where the performance of the whole does not equal anything near the sum of talent of its individuals. Well-intentioned leaders add new initiatives in the hope of tapping into unused human potential but then find themselves facing greater entropy because of the increased chaos the initiative creates in the system.

This was certainly the case when Alan Mulally arrived at Ford in 2006. At the time, there was no shortage of sophisticated initiatives designed to improve organizational performance. Nor was there a shortage of incredibly talented and hardworking people to carry out those initiatives. But those things together were somehow not enough to keep Ford from steadily losing market share, boatloads of cash, market cap and experiencing a chaotic downward spiral.

So what was the problem?

Every functional organization, every geographical organization, and even every program team seemed to have its own unique plan to fix the company.

In part, it was a lack of organizational focus. Every functional organization, every geographical organization, and even every program team seemed to have its own unique plan to fix the company. What’s more, we also lacked a comprehensive methodology for leveraging the capability of the entire organization to effectively move the company in the same direction. We lacked a focused operating system.

What’s more, we also lacked a comprehensive methodology for leveraging the capability of the entire organization to effectively move the company in the same direction. We lacked a focused operating system.

From his first day, Alan worked with his senior executive team to develop “One Ford” – the product-led revitalization plan that would align the entire enterprise. He initiated global functional organizations to better leverage capability around the world, he divested brands to increase leadership focus, and he worked to enroll each and every employee in the plan through effective strategy deployment and tireless communication. He consistently urged the team to take a “laser focus” on creating products our customers would truly value.

But he did much more than talk. He also created a powerful operating system that breathed life into the One Ford plan, leveraged the talent, changed the culture and moved the enterprise forward together. It was the operating system he created that animated the strategy and brought the company together to deliver.

In this context, an operating system is the cadenced management activities that move an organization toward its objectives in order to accomplish its mission.

Further, the system is a single, integrated system made up of interdependent parts. It is not a hodgepodge of departmental plans that do not hang together, or a string of episodic management interventions. An effective operating system is purposeful, transparent, multileveled and cascades throughout the organization, establishing clear, aligned roles and responsibilities in order to deliver the plan. It knits together, and drives, critical organizational value creating activities such as strategy deployment and continuous improvement, new product delivery, people development and working environment, manufacturing and supply chain. Finally the operating system provides its own performance feedback on how you are doing.

At the heart of Alan’s operating system was his Business Plan Review (BPR). Every Thursday Alan brought together all functional and regional leaders to review the business environment, progress on the plan and status of key objectives. Only new issues and changes from the previous week were reviewed. Alan worked hard to get issues out in the open by telling execs “We can’t manage a secret” and making it safe by assuring them that “You have a problem, you are not a problem” and setting the tone by saying, “The neatest thing about this process is that we are going to get back together next week and I know you will make progress by then.”

He also utilized Special Attention Reviews (SAR) for deep dives on particular issues. One example of this was during the Great Recession when a number of our suppliers (and two of our North American competitors) declared bankruptcy. We used SARs to align and coordinate activities across the enterprise in a rapidly shifting environment. For a fuller treatment of BPRs and SARs see Bryce Hoffman’s excellent book “American Icon.”

But to stop at Alan’s BPR level is to miss the point. The system was not limited to a small circle of the most senior executives – it permeated the entire enterprise. While my boss, John Fleming, EVP, attended Alan’s BPR, my colleagues and I attended his. In turn, my chiefs attended my version and their managers attended theirs throughout the company and around the world. We had the same plan, focused on aligned priorities and utilized the same format. If I had to attend Alan’s BPR to talk about an issue, I did not prepare new slide decks. I utilized the same thing we all used every week – just my level of detail was different. Tightly coupled with other key mechanisms such as design reviews, development milestone reviews and Matched Pair meetings, we created a powerful and cadenced operating system that brought us together and moved us forward as a global team.

I believe that this system was one of the most important elements of Ford’s historic, product-led turnaround. It clarified our priorities and focused initiatives, leveraging their interdependencies toward a common set of goals, (in our case, around creating products our customers would value). And most importantly it enrolled everyone in the effort.

An effective operating system brings strategy to life. It synchronizes critical activities, enables the organization to respond quickly to a changing environment and allows plans and teams to move together. What’s breathing life into your strategy, or is it just a collection of lifeless documents hanging from a wall?

Best Regards

Jim Morgan

 

PS:

LEI held their annual global meetings last week with their Lean Global Network (LGN) affiliates. Thirty-one people from 18 countries came together in Cambridge to plan their strategy for making the world better through lean in the upcoming year. We dedicated an entire day to LPPD and innovation by sharing developments in our LPPD Learning Partners and our fast-growing LEI LPPD community as well as planning for future LEI-LGN collaboration. We also visited with our friends at MIT D-Labs and the Cambridge Innovation Center. We have two large, joint LEI-LGN global projects underway with excellent partner companies and several more in the works. Energy and enthusiasm for LPPD continues to build around the world!

The folks at MIT D-Lab continue to do amazing work simultaneously educating students and bringing innovative products to underserved markets. Evaluation Manager and Researcher Kendra Leith shared with us how lean principles and methods are helping them to accomplish their crucial mission.

img_6025_720 kendra

We plan to further leverage the LEI-D-Lab partnership to both educate and deliver ever better value to all our customers.

Save the date! LEI is planning much more LPPD content in their annual Lean Transformation Summit in 2017. The event will be in Carlsbad, Cali. on March 7-8. Stay tuned for more LPPD-related details.

Orchestrating Your Product Development Process with Milestones

Effective milestones are an important part of a company’s development process, especially in today’s era of team-based sprints and stand-ups. Yet many companies struggle to successfully create and employ milestones; and some don’t even understand their relevance beyond updating senior leadership. In fact, the topic comes up so frequently in my travels that I thought it would be worth a slightly longer discussion than usual.

Well-designed, thoughtful milestones do a great deal more than just mollify senior leaders. Milestones can and should be like the sheet music that, along with a skilled conductor, aligns and guides your development orchestra. To that end, I’ll share some thoughts on the purpose of milestones, how to create useful ones, and a few tips on holding effective milestone reviews.

Milestone Purpose

Milestones, as the name implies, provide important information to the development team to guide them on their development journey.

1)  They provide a reference to determine normal from abnormal conditions: Milestones tell the team if they are on track so that they can decide how best to proceed, like the lines on the floor of an assembly-line workstation. In these stations, a set of yellow lines can indicate the percent of work to be completed at that point in time. If the worker is at the 50 percent line, and only 25 percent of the work is complete, he or she can pull the andon to signal for help. The

Milestones tell the team if they are on track so that they can decide how best to proceed

team leader can then come over to help fix the issue in station without disrupting the rest of the line. Of course, this system is worse than useless if the team identifies abnormal conditions but has no signaling mechanism, or if leadership does not provide real help to the team. (One example of leadership help in this regard is the cadenced design reviews discussed in my previous e-letter. However, the goal is ultimately to identify and resolve issues early and effectively – to shorten management cycle time and keep the project on course.)

2)   They act as key integration points: Milestones are an important part of synchronizing work across functional groups.  They should be designed to recognize key interdependencies between disciplines like software and hardware or design and manufacturing and provide common reconciliation points. To do this effectively you must understand both the tasks, and sequence of tasks, within each functional discipline. This detailed knowledge allows you to sync up work across those functions. This in turn lets you maximize the utility of incomplete but stable data to optimize concurrent work. The better companies get at this, the faster they can go. In fact, this synchronization is far more effective in shortening lead-time than attempting to reduce individual task time.

3)   Milestones are a critical component of a company’s development operating system. Senior development leaders typically have many different programs to manage simultaneously. They must have the ability to recognize issues, respond quickly and effectively to struggling project needs and make adjustments as required in the rest of the development factory. A project-health dashboard built from milestone feedback can be a powerful tool to enable this work if you have properly designed milestones.

Creating useful milestones

My experience here is that milestones, like most things in life, are just about as effective as you make them – both in terms of design and adherence. I’ve found that useful milestones share these qualities:

1) A real purpose: Start by asking yourself, “Why do we have this milestone?” You need to be able to create a clear, concise, product-oriented purpose statement. If you can’t, you should question the need for the milestone. Another way to think about this is, “What problem are you trying to solve with this milestone?” Milestone purpose statements should optimally be linked to the Chief Engineer Concept Paper and reviewed in the program kickoff event. It is also crucial that you align cross functionally on the milestone purpose statement.

2) Clear Quality of Event Criteria (QECs): Many companies create milestones based on activities or events.  While this may be necessary it is not usually sufficient. Just completing an activity does not tell you very much about the program status or health. For example, you may complete an early prototype build event, but have done so with component parts that are not the correct pedigree for design or manufacturing process level, thus rendering subsequent testing and learning spurious. You have not closed the required knowledge gap nor reduced risk to a sufficient degree.

By establishing QEC for the milestone, the team gets a more realistic picture of where they are really at in the development journey.

However, because the team completed the prescribed activity, they and their leadership might be lulled into a false sense of security. By establishing QEC for the milestone, the team gets a more realistic picture of where they are really at in the development journey.

Four things I like to think about in evaluating QEC: A) The QEC should be the critical few predictors of project success, not a wish list of every possible failure mode you can brainstorm. B) Is the requirement binary? C) If it can’t be binary, is there a quantitative range that can be established and measured, and D) If it can’t be binary or quantitative, is there clarity about who decides?

3) Clear roles and responsibilities: It is important that participants are aligned on who is responsible to do what at each milestone. The time to align on this is at the start – not when you reach the milestone.

4) Scalability: Not all programs are alike. Levels of content, complexity and risk can vary significantly across projects. Well-designed milestones can be reconfigured to best fit the program without losing their basic intent or effectiveness.

Milestone Reviews:

1) The first principle in milestone reviews is to support the team. Updating leadership is important, but the primary intent should be to provide help and guidance as required.

2) It’s okay to be red, but it’s not okay to stay red. “What’s your plan to green?” was a question I first heard from Alan Mulally while I was at Ford. While you want to drive fear out of these reviews, you don’t want to eliminate accountability. The team must deliver on commitments.

While you want to drive fear out of these reviews, you don’t want to eliminate accountability.

3) Define who should attend each milestone review. Some reviews require senior leaders, functional representation or particular specialists – others not. Consider the milestone purpose for guidance here.

4) Milestones are an opportunity for the team to regroup, align and sync up on the way forward. They should energize the team; not demoralize them. Leaders should look at them as a chance to “turbo charge” the team like the old Hot Wheels spin stations. The cars come out with much more energy than they came in with.

5) Hold the reviews at the gemba whenever possible.

I hope that you found at least a few of these ideas useful. So at the risk of overextending the orchestra metaphor, even the best musicians can sound like screeching cats if they are not playing from the same score. Can better milestones help your team play sweeter music?

Best Regards,

Jim

 

PS:

  • Our friends at the Lean Product and Process Development Exchange (LPPDE) will hold their North America 2016 conference on September 26-29 in Philadelphia. The agenda has been designed to create EXCHANGE and learning around key questions in the evolution of Lean Product and Process Development. Learn more at lppde.org.
  • Our next LPPD Partner Learning Event is scheduled for November in Davis, California at FMC’s Schilling Robotics Center. We are looking forward to another incredible learning experience. Stay tuned for details.
  • The 2016 Lean Process Innovation Summit was held at Mackinac Island on August 16 – 18. A great event at a fabulous location that shows the rapidly growing interest in LPPD! Can’t wait until next year.