Visual Controls Make "Cents"

As many of you know, in addition to consulting, I am an adjunct professor at a college with a large number of international students. Normally I teach statistics, but recently I had the opportunity of familiarizing newly arrived international students with U.S. cultural and business communications.

As part of the workshop for new international students, I engaged the class in a discussion about what they have found to be problematic since their arrival in the United States. Surprisingly the one reoccurring topic that challenged the students, was our coins.

At first I was stunned. Of all the things in this country, the most challenging to newly arrived foreigners was our coins? After considering this for a moment, it made perfect sense. How?

Think about it, the designed system lacks visual clues; it relies almost entirely on the tribal knowledge of the user. It is hardly intuitive; the smallest coin, the dime, is worth more than the larger penny and nickel! Now combine that with the fact that none of our coins have large, easy to read numbers denoting worth; we can “cents” and understand how this combination can pose problems for newly arrived foreigners.

Given the lack of effective visual controls on the coins, it’s easy to comprehend why the newly arrived find this challenging and frustrating.

Now ask yourself, what in your business is not visually intuitive and causes problems? Simply put, are problems going undetected because the visuals controls in your workplace are ineffective? Can you walk into a material storage location and see what needs to be reordered? Can the leaders tell the status of the business simply by walking through the facility and observing?

Excellent examples of effective visual controls are the arrival and departure boards at an airport. First of all, these boards are easy to use, clearly labeled, and very intuitive. Even if you have never been in an airport before, you can look at the board and obtain the information about your flight. Not only does the board display the information, it will provide visual alerts by flashing when flights are changing status.

This information is not closely held and limited to only the airport’s managers. The status of every flight into and out of the airport is readily available and viewable by all. Just as importantly, the board provides only the necessary information and doesn’t overwhelm the traveler with unnecessary details. The required information is freely placed into the hands of those who need it and problems are easy to see.

Now expand on that concept and apply it your business. Does your staff know the status of inventories, deadlines, and other critical information? Are your visual controls improving information flow and process control?

More importantly, what benefits can you experience from an effective visual workplace?

• Higher job satisfaction – Individuals experience less stress because they have the required information to perform their jobs

• Safer work environment – Walkways are clearly labeled keeping individuals at a safe distance from moving vehicles and machinery

• Higher quality – Fewer defects/errors as problems become easy to see

• Greater efficiencies - Required information/material is readily available resulting in less downtime

• Improved appearance – Workplace is neat and orderly

• Improved Bottom Line – Reduced errors plus greater efficiency equals a better bottom line.

A visual workplace, which is often times associated with a 5S program, should be self-ordering, self-explanatory, and self-regulating.

If your business is experiencing problems because you can’t tell the status of the business simply by walking through and using tools deployed as part of a visual workplace, then I encourage you to consider launching a lean sigma program. It makes “cents.”

Please leave your comments or email me directly at royce.williard@gmail.com

Learn more about the author by checking my LinkedIn profile at http://www.linkedin.com/in/roycewilliard

 2009, The Williard Group

Photo Source:

Figure 1: Public Domain Photo of U.S. dime. Source: Clipart Graphics

http://www.freeclipartnow.com/money-business/coins/

Economist hypothesizes the “deflationary meltdown has past.”

The Governor’s 3^rd Annual Utah Economic Summit was held in Salt Lake City on Monday, March 30, 2009. The Summit featured some amazing speakers including Governor John Huntsman, Wells Fargo Executive Vice President/Economist Dr. Kelly Matthews, and Pixar/Disney Animation Studios President Dr. Ed Catmull. While all had great speeches, Matthews’ message was particularly impressive and it was reassuring hearing good news about the economy as he put forth his hypothesis that the “deflationary meltdown has past.”  Matthews went on to make a compelling argument to support his hypothesis.  

 

Matthews proceeded to ask what has changed in the economy that would account for the approximate 20% growth in the S&P in recent weeks?  He then answered his own question by stating that the growth in the S&P could be explained with three events.

The first significant difference he offered was the fact several major financial institutions (i.e. Citigroup and Bank of America) operated at a profit during the first two months of 2009 (4 & 7).  This dramatic turnaround came after both institutions had received an infusion of federal bailout money in late 2008. Citigroup received $25 billion in October and $20 billion in November (3).  While Bank of America was the recipient of $15 billion (6).  Matthews contends the positive news of profits posted by Citigroup and Bank of America is creating some expectation among investors and the public in general; that the worst has past.  Please note, Matthews was not implying that the bailout funds were responsible for the institutions posting a profit.  He was simply stating the fact that by generating a profit for the first two months of 2009, the positive impact on the morale of investors has been significant.

 

The second point Matthews offered in support of his hypothesis is that consumer spending has leveled off in the first two months in 2009.  Matthews was careful to say that consumer spending had not increased; rather he indicated that it was no longer continuing to decrease (2 & 8).  While Matthews said that he expects more job losses in coming months, he also stated he expected the job losses would end as soon as consumer demand and the existing supply reaches equilibrium.

 

The third significant event Matthews offered was the action of the Federal Reserve on March 18, 2009.  By purchasing $1 Trillion dollars in Treasure Bonds and Mortgage Securities, the Fed’s action reduced the cost of long-term debt (1).  According to Matthews, these actions had directly aided in the edging down of long-term interest rates as evidenced by drops in the 30-Year mortgage rate to 4.85% and 10-Year Treasury note yield to 2.72% (as of March 27, 2009).  The 30–Year mortgage rate is now at the lowest rate in approximately 50 years (5).

 

Many in attendance commented that Matthews’ message was both uplifting and well thought out.  After returning to the office after the Summit, this author and Lean Sigma Champion set out on a mission to independently verify the items Matthews put forward as fact.  The references and citations included in this post are the sources located which collaborate facts set forth in Matthews’ hypothesis.

 

So is Matthews’ hypothesis correct when he proclaims the “deflationary meltdown has past”?  Only time will tell, but after researching the facts offered in support of his hypothesis I agree with him and believe that the “deflationary meltdown has past.”

 

 

 

References

 

1.     Andrews, Edmund L. (2009, March 18). Fed plans to inject another $1 trillion to aid the economy. Retrieved April 3, 2009, from The New York Times Web site: http://www.nytimes.com/2009/03/19/business/economy/19fed.html?_r=2&hp

 

2.     Jake (2009, March 27). Personal consumption holding steady. Retrieved April 3, 2009, from Economopicdata Web site: http://econompicdata.blogspot.com/2009/03/personal-consumption-holding-steady.html

 

3.     Lagorio, Juan (2008, November 26). Citigroup bailout slammed by New Yorkers. Retrieved April 3, 2009, from Reuters Web site: http://www.reuters.com/article/marketsNews/idUSN2636427520081126?pageNumber=2&virtualBrandChannel=0

 

4.     Lepro, Sara (2009, March 10). Dow ends up nearly 380 on Citigroup profit news. Retrieved April 3, 2009, from The Huffington Post Web site: http://www.huffingtonpost.com/2009/03/10/stocks-shoot-higher-on-ci_n_173459.html

 

5.     Lewis, Holden (2009, March 26). Mortgage rates drop to lowest since the '50s. Retrieved April 4, 2009, from Bankrate.com Web site: http://www.bankrate.com/finance/mortgages/mortgage-rates-drop-to-lowest-since-the-50s.aspx

 

6.     Snow, Mary (2008, December 23). Where's the bank bailout money. Retrieved April 3, 2009, from CNN.Com US Web site: http://edition.cnn.com/2008/US/12/22/bailout.accountability/

 

7.     Unknown, (2009, March 13). Bank of America expects 2009 profit - Lewis. Retrieved April 3, 2009, from Ub News Web site: http://ub-news.com/news/bank-of-america-expects-2009-profit-lewis/1338.html

 

8.     Unknown, (2009, March 27). Savings rate continues to be high. Retrieved April 3, 2009, from The Wall Street Journal Web site: http://online.wsj.com/article/SB123815632294556303.html

 

 

 

 

 

Post Author: Royce Williard

copyright 2009, The Williard Group

 

When are you done with Continuous Improvement?

 

Recently an individual who just witnessed several lean sigma project reviews asked, “When are you done with continuous improvement”?  The discussion that followed is worth summarizing to reinforce the idea that continuous improvement is just that, continuous.

 

My initial response was that not only must a company change; it must change faster than its competition.  Most everyone would all agree that companies are competitive and all want to be number one in their field.  Assuming that as a fact, the non-field leading companies are striving to improve to over-take the leaders.  Should the up and coming companies change and improve faster than the leaders, they will eventually over-take them. Without change, even companies that are number one in their field will eventually be surpassed. 

 

One person in the discussion likened this to a scene in the 1990 movie “Days of Thunder”, starring Tom Cruise and Robert Duvall.  The individual described one scene in which the pit crew chief (Duvall) was talking via radio to the racecar driver (Cruise).  The pit crew chief was complaining to the driver that he was going too fast and abusing the equipment.  The driver responded that he had not sped up, but everyone else had slowed down. By simply going a little faster than the competition, he finally passed all of those in front of him to become number one; winning the race.

 

Continuous improvement is a marathon and this marathon has no end, simply minor course adjustments as you continue in the race. 

 

We are in a changing and challenging time.  Many companies will be tempted to retrench and cut expenses by blindly cutting costs including eliminating their continuous improvement activities.  This is not the time to be timid, this is the time to aggressively attack waste by pursuing continuous improvement.  Less non-value added waste equals more profit.

 

For a company to be successful, they must have a strong culture that promotes continuous improvement.  They must strive to be better than they were six months ago while realizing that they are not as good as they will be six months from now.

 

I’ll close this post as I closed the discussion, with one of my favorite business quotes. “When the pace of change outside the organization is greater than the pace of change inside the organization, the end is near.”   John R. Walker

 

 

Post Author: Royce Williard

Copyright 2009, The Williard Group

Begin Each Day By Going To The Morning Market

These turbulent financial times require decisive and bold action.  Earlier this week, Brad Heitmann reminded me of the quote “Fortes Fortuna Adiuvat” which is Latin for “Fortunes Favor The Bold”.  I urge you to be bold and not accept the status quo.

 

One of my first experiences with lean involved a concept known as Morning Market.  This concept challenged my existing notions of what occurs in and how daily meetings operate. Many departments in different companies around the world begin their day with a review of the current day’s schedule and the prior day’s performance, but Morning Market takes that daily ritual and improves upon it.      

 

Morning Market is a daily process that makes the defects visible and creates a sense of urgency to resolve the issue.  A defect in this case, is anything that disrupts the flow of material, information, or product into the customer’s hands. A properly executed Morning Market will enable the organization to start every day by focusing on the business objectives, customer complaints, and in-process quality issues. This increased focus will enable immediate resolution to begin via corrective action tasks.

 

Morning Market improves the daily planning process by moving out of an office or conference room and to the operational area.  The meeting takes the cross functional team that represents all areas of the process and moves them to the location where the work is performed and where the truth is found. Additionally, because the meeting is no longer in a conference room, it has become a meeting where the participates stand throughout the discussion. Thus, the participants never become too comfortable and the meeting remains focused. This concept can be applied in all areas including factories, call centers, accounting areas, schools, hospitals, construction sites, etc…

 

Typically, the Morning Market meeting will take approximately 15 minutes after the concept matures in the organization.  The short meeting covers safety issues, metrics from the previous day, quality, current day schedule/forecast, action register review, and announcements.

 

Meeting attendees should be encouraged to bring examples of quality issues to the meeting.  The quality issues are separated into the following three classifications:

 

• Customer complaints
• In-process defects and abnormal conditions to flow
• In-process defects related to waste

 

Keys to a successful Morning Market meeting must include a strong facilitator, full engagement from all areas, preparation, and follow through on assigned tasks.

 

I have personally seen Morning Market transform organizations from passive and tolerant of defects, to an organization that aggressively attacks and eliminates quality problems. 

 

Be bold and decisive. If you don’t have a lean enterprise program, start one. If you currently have a lean enterprise program, push it to the next level. Remember, “Fortes Fortuna Adiuvat”.

 

 

Copyright, The Williard Group, 2009