Today's blog is written by lean process expert Paul Critchley, President of New England Lean Consulting:
Fall is always a busy time for folks. Kids are going back to school, people push to get their work projects completed before year end, and it’s a popular time for conferences.
We attended one of these conferences in Boston a couple weeks ago, and it always impresses me how many attendees there are and how passionate their Lean spirit is. It is energizing, really, to see so many people who care so much about making things better.
There have been occasions (and that conference was no different) when folks will stop one of us and ask us where to begin their Lean process journeys. They know they have issues that Lean can solve, and they believe in the methods that Lean teaches, but they are being pulled in so many directions, they just can’t decide where to begin. They often get caught deciding between “easy and fast, but not impactful” and “harder and slower, but bigger impact”. They know they need to build momentum (which bodes for easy and fast), but also that Lean, and they, will be judged by business impact (which bodes for harder and slower).
To help, we start by asking them a lot of questions in order to help funnel their efforts toward the right area. We start with questions like “How customers and products do you have?”, then move through their value stream as we ask “How many products use the same equipment?” and “How long does each process take on each product?” The answer to their initial question usually reveals itself as we move through this “Q&A” session (which takes only minutes), and they can move on with a plan of what to do immediately versus what can wait a bit and what can be left alone altogether.
One item to note as a common theme we have seen over the years is that data collection and analysis are often at the core of the uncertainty about where to begin lean process development. Folks tend to believe that they know where to start, but they also know that they don’t have as much of the necessary information as they should.
In these cases, we guide them toward two things: develop a solution that can feed you the data that you need, and adopt the 40/70 rule. Those two things, working together, will help feed your continuous improvement pipeline.
We can only make decisions based upon the data that we have, and therefore it is imperative to any continuous improvement initiative to have a method for data collection. In the case of a machine shop, you must know the percentage of time that your machines are running parts versus being setup versus being down for maintenance or breakdown in order to focus your efforts in the right area. For instance, there is no sense in spending time/energy/resources perfecting a PM plan if the biggest issue in the shop is lengthy setup times. Solve that issue first, then move on to other, less impactful ones. You can only know that if you have a data collection method that gives you that information. Otherwise, you’re guessing.
The 40/70 rule was popularized by retired four-star General and Secretary of State Colin Powell, and it teaches that we need between 40% and 70% of the applicable information in order to make a decision on any one issue. Whether you specifically need 40%, 70% or something in between is inversely proportional to what level of failure risk you want to assume. Obviously, the less information you have, the more failure risk you are assuming. Some issues can assume more risk than others based upon the implementation effort they require and possible worst-case scenario outcomes. What we really like about this rule is that it recognizes that having less than 40% of the required information is not acceptable, but also that having more than 70% of required information is likewise non-beneficial. Secretary Powell puts it this way: “Use the formula P=40 to 70, in which P stands for the probability of success and the numbers indicate the percentage of information acquired. Once the information is in the 40 to 70 range, go with your gut."
Honestly, we couldn’t put it any better.
Paul W. Critchley is the President of New England Lean Consulting. He is a Board member of the Northeast Region of AME, and he is co-author of “The Whole Professional, A Collection of Essays to Help You Achieve a Full and Satisfying Life”. He can be reached at www.newenglandlean.com.
New England Lean Consulting
New England Lean Consulting
Twitter handle: @NELeanguy