Lean principles & practices applied during an SAP roll-out (Part 1)

It has been quiet over the last year on my blog. Supporting the implementing of an SAP system has been keeping me really bussy at my pevious employer. Now, time has come to share some reflections. Three years ago, I was hired as a lean manager, a year before the company went life on SAP. Little did I expect that this event would offer so many opportunities for applying lean thinking and practices. This is what I'll be sharing with you in the next couple of articles.

In this first article, I will share how 1) "Process Thinking" was reflected in the roll-out approach, 2) how weekly whiteboards huddles made problems visible and engaged cross-process cooperation, and 3) how agile techniques helped us esp. in the testing phase.

The company subsidiary where I worked, was the second one to go live on the SAP system. Previous implementation experience had shown that major disconnects occured in the processes especially between departments. In an integrated ERP system, all processes are linked: a simple mistake in product master data can cause products not to be orderable from customers, not to purchaseable from vendors or not to be received in the warehouse. Hence, the way of looking at the organisation was enhanced from a solely departmental perspective to a process perspective as well. The additional conceptual layer, the process model, was put on top of the functional silo's. This layer introduced a new language -a new standard- e.g. Order to Cash covering the activities from creating a quotation and an order (sales), credit checking (finance), calculation of estimated delivery date, billing (finance) and collections (finance). This reflects the essence of the 2nd Lean Principle, that customer value is created by a value stream.

In theory this sounds logical and simple. In practice this had major consequences. The entire project organisation, for design and implementation of the SAP processes and solution, was organised in Process Teams e.g. Order to Cash, Procure to Pay, Receive to Ship. Supply chain folks were now teaming up not just with their own peers but also with the accounts payable folks and with the teams maintaining vendor master data. Process owners, supported by process leads, were assigned to own the design and functioning of the main end-to-end processes. In the design of an EPR functional solution, few decisions can be taken in isolation. [By the way, after dissolvement of the project organisation, the value stream specialist role remained.  It proved to be a challenge for these specialists, who always belonged to one functional organisation as well, to focus their efforts on the end-to-end proces they were responsible for. For example: a sales specialists was required to master the billing and credit processes as well.]

When replacing your existing processes and systems with an entirely new one, and the existing solutions in SAP are known to be incomplete, how do you keep overview of all issues and dependencies whilst preparing for a go-life. We introduced weekly boardwalks, where the process team leads were updating eachother on progress, were issues were raised to sponsors and dependencies between team and processes were managed.

PMO board

Project board - Order to Cash

Project board - Product Life Cycle

We experimented with some agile development practices, without having the true agile in place. Development was done in sprints, which allowed for better tracking of deliverables on time and useability. Burn down charts revealed that no development ever went according to plan. In some area's daily scrum meetings made problems visible between teams and had multi-disciplinary teams work together much better. During testing, simple visual management methods were used track the testing progress. Here are a couple of pictures.

Testing - Daily Production Board 

Example of testcases

Issues raised on today's tests.

Backlog of testscripts to be done

Scripts with defects

Data objects "in use" and hence reserved for ongoing tests. 

A visual plan with all milestones and activities was filling the wall.  Progress or delays were immediately visible with green and red dots. The visual plan helped us to "see, learn and act together as a team".

Visual Plan for SAP roll-out

Visual Plan detail - green = started / red = overdue / blank = not to be started yet.

 In the next articles, I will share e.g. how Lean principles were introduced in the "Training Approach", how "Standard Work" was introduced and how visual management techniques supported Incident Management.

Purpose of Kaizen Events

Kaizen Events are bursts of improvement activity, where typically employees from different departments participate in a one- or multiday workshop to solve a business problem.

In my experience, the purpose of these events is not limited to just solving a problem. By solving a problem together we also aim at building capabilities and trust.

What capabilities are we developping during Kaizen Events?

First, we develop process understanding; i.e. understand how my work relates to that of my colleagues and eventually to the customer.

Second, we train people in problem solving methods and lean practices such as A3, fishbone, process mapping, 5 why's.

Why and how do we develop trust and relationships during Kaizen Events?

Cooperation and trust between people (esp. from different departments) are at the foundation of continuous improvement. Without trust and teamwork, there can be no autonomous kaizen. In my experience, people who have solved a problem together during a Kaizen Event have build relationships. They have a betting understanding of eachother's work and concerns. Consequently, I find that whenever a new problem occurs, they'll contact eachother much easier.

Go See - understand the process at the gemba

Here are some tips that can help you work towards this purpose of Kaizen Events:

• Plan time to train employees in problem solving tools, before applying them
• Allow time for participants to share views and opinions. The benefit is in the dialogue, not in rushing to the solution.

Taking time to reflect with the team

It wasn't until reviewing this article, that I realised the summary of this article is the same as my slogan "Improving Performance, Growing Together": improve your process and business while developping people and fostering teamwork.

Lean appeals to mind, hands and heart

I just love lean! It appeals to my mind, my hands, and my heart. Somehow, since working from the lean source, I feel a more complete and balanced person.

Clearly, lean is a holistic management system, an integrated approach on how to run a company. But for today, I would like to zoom in on how lean is holistic in the way it engages people. My deep rooted belief and daily experience is that lean management appeals to the minds, hands, and hearts of people.

First, lean's preference for the scientific and socratic method appeals to our brain. Many of the traditional lean tools help in addressing business challenges from an analytical perspective, such as Value stream maps, SMED, KPI's, level scheduling, designing the ideal state value stream based on lean prinicples. The predominant lean school of thought in the West has been very much the analytical en technical one.

Secondly, lean has a strong preference for experiments and for incremental improvement action, especially in comparison with other improvement methodologies such as TQM or LSS. Lean emphasises the gemba where the action takes place. It's at the gemba that we learn by doing. A famous quote in this context is: "Learn with you hands, and see with your feet."

Thirdly, lean addresses the heart: respect for people is a core value of lean management. Lean is about developing and engaging people, about giving them a meaningful purpose (e.g., serving the customer, serving society, personal mastery), and about belonging and contributing to a team. It is also about giving people a sense of dignity and ownership, and about creating a physically and mentally safe workplace where people can develop to their full potential and experience a mental state of flow.

I'd love to hear if you have had similar experiences with lean practices addressing mind, hands, and heart.

Understanding complex problems with causal diagrams.

Some problems are just more complex than others. In some cases multiple causes and effects are re-enforcing or smoothing eachother. Typical tools such as 5why's or fishbone don't offer sufficient support to understand and visualise these problem. In my experience, this is when a causal diagram really helps out. A causal diagram is a graphical tool that enables the visualisation of causal relationships between multiple variables in a causal model.

Here is an example of a causal diagram I once made to understand challenges in a complex SAP development and roll-out program, where milestones were systematically not met. The white circles describe causes and effects, where the arrows indicate how one topic has a causal relationship to another. For example, running many projects in parallel causes competition for scarce resources.

Let's have a closer look at how this works using the above example, starting at the bottom right: running many interrelated projects in parallel is increasing the complexity and dependencies in each of the projects. This increased complexity made it hard to make a reliable overall plan. Furthermore, all these projects were competing for scarce resources. When an issue or delay in a high priority project pulled for more scarce resources than planned, other projects where these people originally were planned to work on, were delayed. As a quick fix, it was as a rule agreed that critical resources would only be allocated shortly in advance and for a short period of time; in other words to allow them to work on where the biggest fires were. Consequently, since nobody knew whether critical resources would be available as planned, the quality and relevance of (short term) planning of projects was getting poorer. Basically, people were thinking: "Why bother investing time in making a serious planning; I never get the people I need for my project anyway." As a result, there was no real commitment for any of the timelines of the projects that were on the table. Also, challenging project managers on not meeting their deadlines, systematically resulted in the answer: "I'm not getting a response or availability (from the critical resources)". Gradually, the local roll-out management stopped challenging their local project managers. So, the incentive for good planning and execution slowly diminished. All in all, this resulted in a self enforcing mechanism of constant project replanning, with deteriorating quality of planning, poor commited project managers and nobody who was really following up on realisation of plans.

It took me a while to understand what was really going on. Mapping the interdependencies in a causal diagram helped in analysing the problems and finally defining the countermeasures.

Characteristics of work instructions

Have a look at these work instructions posted at a work station in the picking area.
What stories about standards does it tell us ?

Here's what I found interesting :

- they are posted at the workstation and visible for all, not filed away in a folder.

- work instructions (left) are supported with pictures

- employees working at the station must sign for accepting the new standards (right)

- work instructions have a limited validity (on the picture 17-8-2010) and must be reviewed by the station owner at fixed intervals.

- should the work instruction be removed, the label above signals the missing document

Use problem solving boards to monitor Lean culture

Recently, I visited the Scandinavian Solar subsidiaries and came across an interesting way to monitor the progress of lean culture throughout the company.

Traditionally, the adoption of the Solar Lean Way is measured in the annual employee survey. The survey measures the Lean awareness and employees' belief that the Solar Lean way contributes to serving the customers better and achieving the company's goals. Furthermore the survey includes questions on the lean leadership style of management. These are great measures at the start of a lean journey. However, these measures do not reflect the extend to which improvement activities are taking place throughout the company.

Let me describe how Solar is tracking the amount of continuous improvement activities as a proxy for "lean culture". Incremental improvements or point-kaizens take place on the gemba during meetings at the "lean problem solving boards". Here, teams discuss performance gaps and improvement opportunities on a weekly basis. Performance is measured and compared against goals. Any deviation from target (1) is addressed with rootcause problem finding and/or improvement suggestions (2). As the problem solving progresses (3,4,5), the boards keep track of the number of improvement actions in progress and the number of improvement actions closed (6,7).
( The number between brackets, refer to the numbers on the image below )

On a monthly basis, the number of improvement actions implemented (6) across all departments are aggregated on the regional lean board or country management lean board. Thus, an overview of the overall continuous improvement realisation is made visible and compared to target. On the image below, the red indicates that the continuous improvement goals within a particular location are not met. Hence, they are subject of a problem solving cycle on this board.

I'd love to hear if you have similar or other examples on how continuous improvement culture is tracked.

How to use influence to get things done

I enjoyed reading this article by Strategy+Business on how to use influence to get things done.
http://www.strategy-business.com/media/file/sb62_11104.pdf

Here are the five factors to use influence well:
1. Build up the courage to raise difficult problems
2. Leave your personal agenda at the door
3. Rise above the game, but don't ignore it
4. Engage the group using emotional intelligence
5. Be tenacious, because decisions do not guarantee actions

Should managers know the content of work?

In a reaction to my previous post "No Problem is problem", Marco van Katwijk asked if  “a manager should have (the skills to acquire) an understanding of the actual work content, with the purpose of learning to see if problems are hidden?”  Marco, thank you for your question! I believe managers absolutely need an understanding of the actual work content. Here are my thoughts.

First, managing based on facts and observation is a key competency for supervisors and managers. This means managers go and study (genchi genbutsu) facts on the workfloor to support the team's problem solving processes. In my opinion, this behaviour requires an intrinsic interest in the actual work. By practising genchi genbutsu, a manager's understanding of the actual work content will naturally increase over time.

From my personal experience as a manager, I have always dug into the actual work content of problems critical to my team's performance. I kept involved in the actual work content to verify that my team members were building:

1. understanding of their work and how it relates to that of others
2. the capability to see problems
3. skills to find true root-causes
4. skills and discipline to verify that countermeasures were working

I believe that digging into the actual work content together with a team member during problem solving, is an opportunity for teaching and coaching them on these competencies. As over time, team members gradually develop these competencies, my involvement with their actual work content decreased.

The purpose of understanding the actual work content is to support the problem solving process and develop the competencies of the team. 

Secondly, by showing an interest in the actual work of the team and their problems, a manager demonstrates respect, builds a mutual understanding and a basis for trust. Building a work environment of mutual trust and support is probably the most important element to prevent people from "building walls to hide problems".

Showing interest in the work content builds mutual understanding and trust.

In summary, for a manager it is essential to understand the actual work content to a sufficient level of detail. The purpose of understanding the work content is one of supporting the problem solving process, developing competencies and building mutual trust.

Characteristics of effective goals ( in Dutch )

Source and background reading:
http://123management.nl/0/070_methode/a720_methode_06_doelen.html

No problem is problem

I just love the following image !  It's great for discussing some lean concepts with your team: e.g. the role of the manager, the mental model of "problems are gold", the importance of visualizing problems, the importance of continuous improvement.

Here are some questions to trigger people's thinking:

1. Why does the person on the right (R) say there is no problem ?
2. Why does the person on the left (L) accept his 'No problems!' answer ?
3. Assuming that (L) is the manager, what does he do right ?
4. What happens after the third image ? What culture and behavior are fostered ?

Here are some possible anwers:

1. The wall hides (R)'s problems; (R) cannot see his problems. Maybe (R) has learned that it is better to hide problems because e.g. the messenger usually gets shot or gets instructions on what to do about ( i.e. get more work).  Maybe (R) even built that wall for that purpose ?
2. (L) has no way of verifying that there no problems, as the problems are not visible.
3. (L) is at the gemba and inviting (R) to talk about his problems. ( Note: Consider asking "What are your problems?" instead of  "Do you have any problems?" The first questions sets the expectation that there always are problems. )
4. Everybody is firefighting everywhere, everyday.  Consequently, there is less and less time to prevent problems by eliminating root-causes.  The prevailing mindset becomes:  "our hero's are the firefighters" instead of "our hero's are the fire prevention team".

What additional learnings do you find in this picture ?

Source of image : unknown - pls. inform me if you know the author.