Lean Value Solutions

Guest was Tom DeForge of Lean Value Solutions International

Business901 Podcast Transcript

Tom has an extensive background in helping organizations develop and implement Lean Manufacturing principles within a variety of production settings. Tom has served in management positions with United Technologies, Pratt & Whitney, where he was an operations Business Unit Manager, and Site Manager responsible for implementing Lean Manufacturing in both the Supplier base and Internal Business Units. Over the past 20 years, Tom has been featured in several articles and seminars on the subject of Lean Manufacturing implementation. Tom has also studied Lean Principles in the United States and Japan with the originators of the Toyota Production System and has facilitated numerous Improvement workshops in the United States, South America, Europe, Mexico, Middle East, and Central America. Tom applies the disciplined approach and analysis tools taught to him during his 8 year tenure by the Shingijutsu consulting group, who are considered 2nd tier consultants to the father of The Toyota Production System, Taiichi Ohno . Lean Value Solutions International (LVSI) is the destination for organizations seeking results-based partnerships that require rapid results - whether the assignments are strategic or tactical in nature. Regardless of the size of your organization, the fundamental obstacles to implementing a Lean strategy are fundamentally the same. LVSI provides the expertise and infrastructure necessary to help you implement strategy and align culture, processes and execution to achieve a series of quick results along a roadmap that is focused on achieving sustainable competitive advantage.

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Joe Dager: Thanks everyone for joining us. Participating in the program today is Tom Deforge, the President of Lean Value Solutions International. Tom has an extensive background in helping organizations develop and implement Lean manufacturing principles within a variety of production settings. Tom, could you explain your company to us and your areas of expertise? Tom DeForge: Good morning, Joe, and thank you. Our company was started about 14 years ago as a result of several of us being in a Kaizen promotion office under the tutelage of the Shingijutsu consultant group for about six years. We specialize in Lean implementation enterprise solutions throughout a global scenario. We've been doing this, again, not only for the 14 years at our company, but also in our previous life for about 10 years. So, we do the typical Kaizen stuff and the Lean Six Sigma training and certification. Of course, we're working on our new platform of assessments and monitoring. Joe: You've been working with the software company for the past two years. Could you explain that a bit to me? That seems like a big direction, a big thrust for your company right now. Tom: One of the things that we've noticed in our approach to Lean is the ability to get data off the shop floor quickly, cleanly, and with a great degree of accuracy. Back in the days when the Japanese Sensai would send us to the shop floor, we would go out there, and we'd see several assets. We'd see these assets running across three shifts. There were several part numbers there to observe. We were trying to do this, manually. It was very static in nature. We'd take these observations, go back to our rooms to analyze it and understanding that 10 minutes later, down on the shop floor, things were changing rapidly. A few years ago, we got approached by a software company that had a very good idea relative to capturing that data in a real time setting. It kind of intrigued us because it solved the problem I just discussed.

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So, we entered into two and a half to three year collaboration with them to get the Lean tools integrated into this system. As we worked through this, what we noticed is that we were able to set some parameters with that. Such as the workers, giving us that data off the shop floor in four seconds or less, being able to help customize that feedback data as well, relative to what they're doing everyday and have it tied into the financial returns. So that as we make improvements, it shows throughout the entire organization to a dashboard type scenario, exactly how that impacts the financials. It shows how we integrate the entire organization into that process. Again, its a simple easy-to-hook-up, easy-to-use feedback mechanism. It takes the continuous improvement group to quicker and faster action with more integrity. Quite frankly, it shows us where to go and what to do faster than any manual system thats out there today. Joe: Theres a lot of software out there nowadays. Who is really your target market for something like this? Tom: Well, we are going after the discreet market, actually, where people are either running machine tools or doing assembly, those types of things, with the operator. We like to call it, really, the voice of the operator. You're right, Joe, there are tons of software out there. The unique thing about our package is that the software is tied to actionable items. So, therefore, when we install it into our client base, we monitor what the employees are feeding back to the system. Which helps link us to their continuous improvement office and their executives, and collectively, together, we form a game plan. Then more, importantly, our group will go in, in conjunction with the continuous improvement group of that company. We execute the events relative to what the employees are telling us is wrong with the process. So, software, in and of itself is, absolutely, nothing unless you have an executional piece behind it. So, our model really is to collect that data and then execute on that data so that the needle, from a performance standpoint, moves forward.

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Joe: Most lean practices and most lean practitioners will come in and say, "You have to get next to the operator. You have to listen to what he has to say." Lean software doesn't play that big of a role at the beginning of implementing Lean tools. Do you agree with that? I mean, do you implement the software in lets say, maybe, stage two? Tom: Actually, it is implemented in stage two. The first stage is understanding the asset and how to connect into the M codes. Or if its an assembly process, how we're going to, manually, do that. We, truly, believe that the operator input is the king, thats the way we've been trained. So, therefore, one of our parameters was that the operator gets intricately involved in the process. Not only designing the buttons that they push relative to the problems that are happening on the floor, but also that feedback of a process. Because think of it, if I'm not on the shop floor, I have a time observation form, I'm working with one operator, and there are 65 other machines running. Those operators are looking at us going, "Well, what about me?" With the implementation of this structure, all 65 operators are pushing buttons, giving us feedback relative to their day. Then, that stuff is being fed back up into a dashboard scenario. From that dashboard scenario, we are taking those problems and those issues, wracking and stacking them to a parade of process, essentially, at a high level. Then, going in there and fixing those problems. So, therefore, instead of having one person on the floor, you're really integrating the entire company. Using the machine operators feedback, which is where it should come from, in a much faster and more precise way. So, yes, we are, heavily, going to agree with you that operator, their feedback, and that process feedback is huge. That was one of our parameters when we sat down to help design this system.

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Joe: The person who is observing the software, they are remote from the floor. They're looking at a dashboard and watch it continuously. Then, an alarm goes off if somethings happening in the flow. Before it becomes an alarm, is it giving you some on time analysis to correct problems on the fly? Tom: It will do that. We've instituted some, what we call, "Alerts and Alarms." As this process matures on the shop floor, we bolt on these modules, and one of them happens to be "Alarms and Alerts." So, therefore, you can get real time feedback relative to parameters that you set within the system. For example, if I know I have an asset, and I know from an OEE perspective - overall equipment effectiveness - that particular piece of equipment needs to run at, lets say, 75% OEE. In order to facilitate the flow to the process and hits specific financial targets it sets an alarm and a notification option on the software. If it drops below that, it rings my pager, sends me an email, et cetera. So, therefore, it monitors and gets the voice of the employees back upstream where it belongs. It also gives those alarms and alerts that helps us go to that floor quickly and expediently to fix those problems. So, that module is available on that software. However, we like to make sure that during the implementation piece...because quite frankly, its a bit of a culture change. We get the operators comfortable; this is not big brother watching you. We get the continuous improvement team on board with reading these specific reports and how we take those reports, and we wrack and stack them and then go to the floor and fix the problems. Then, as this process matures, we bolt on the alerts and alarms modules and other modules as they get comfortable with the scenario. Quite frankly, what we're finding is that the operators love it because, again, it ties the entire organization into seeing whats actually going on in the process. Typical General Managers, Presidents, and CEOs, you know, running a company, the phone calls that.

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they get. The financials they've got to handle and other things happen around a typical General Managers or Presidents day, I know, sometimes they don't have that real close look at whats going on. This kind of ties it all together, which is why we love it. Joe: That was really where my question was leading to is how has it been received by the operators because, normally, that's what makes or breaks any system. Tom: Right, you're absolutely right. Operators - and of course, I was once on the shop floor, I was a machinist. Occasionally, you'd raise your hand and say, "Gee, I really have a great idea" or "I really have this problem." In the busyness of a production day, a supervisor - I was one of those, too - I'd say, "Its OK, I'll get back to you" or "Gee, thats really important, but I've got to go over here." Suddenly, all that great feedback from the floor gets lost. Here, in this system, we capture every idea because its got a note section in it as well. Ideas from the shop floor, from the people doing the work, and we capture that so its no longer a gone or lost thought. Then LVSI and the continuous improvement group, we meet up, and we execute against those problems and issues on the floor. So, its a very good way to not let good ideas go by the wayside. Its also a way by which we capture exact process problems and issues that happen on the floor. Joe: Is this software available to people on the open market or how would they obtain it? Tom: Its interesting that you ask that. We get approached a lot by several software companies (and we being training by the Japanese and everything has to be written on a piece of paper) where we kind of rejected a lot of them. What intrigued us with this company is that they had, again, a process by which we could tap into the shop floor and the people who actually do the work, and on occasion, assembly as well.

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This is available on the open market, but our model really is a piece of software thats no good, unless you take action. So when we developed this, the model is that we come along with the package. This means we do the installation, we do all the tweaking in, and we download all the software. And then we work side by side again with the CI group to facilitate actually doing something on the shop floor in the guise of doing Kaiser Interventions to fix the problems. So yes, it is available; you could buy it, I guess, as a stand-alone. But again, without taking action and not having a group behind it, to take action, it is kind of a risk. Joe: Thats what I found out in a lot of the different packages of software that I found on the web - I mean we all have a pile of software sitting behind us, on the shelf. And some of us have bigger piles than others, me being one of them. It truly is the implementation of it that is the secret in anything anymore. As much as the Internet has allowed us to do things and become so proactive and get our hands on so much information, it still is a people thing. Tom: Absolutely, and anybody who is going after the Six Sigma piece or the Lean piece or any continuous improvement piece - you know that the people are the key. Mister Iwata, who was just a great guy to work with, used to say, "Tom, this isn't more work. The people are the king." They were great at writing things on flip-charts. And I remember that he wrote a picture of a hospital in there. And hes lecturing me and others. And he drew patients in a hospital bed. And he said, "This is your process, this is your shop floor. The people on the shop floor are the patients." And he said, "You in the Kaiser and promotion office and the engineers that are in the room, maintenance and others, you are the doctors. And when the patient is sick, the doctors must come or the patient dies."

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And I'll never forget that because its so true. We're trying to reverse to that through this implementation of technology, and I hate to use the word, software, because you're right. It has all those implications. But through the use of this software, its really having the patient tell us whats wrong. And its the organizations job to go down and take action to fix those things. And through this dashboard scenario, it ties everything together, which I think is kind of neat. It takes away that big black hole or void in between the shop floor and the executive. And it marries them together so that everyone is on the same page fixing the problem. The cool thing is it hooks into financial-store-value calculator. So it takes away that, "Gees, I've been doing this lean for all these years, and what am I getting back out of it? Well, in this system we tied into financial, so we know exactly what we're getting back out of it. And I think that is a great thing. Joe: I love to see it when people go through a process such as Lean or Six Sigma, and they start seeing the measurements. Sometimes, when they realize where the bottleneck or the problem is and the cost of that to be able to free up the entire system is astronomical. They're just amazed because they're sitting there, been fighting the systems and putting more and more in but not really looking at core issues and core problems. Implementing a system allows you to do that, I think. Tom: I agree, and quite honestly the involvement of the CFO is critical because you want to do this to make the business healthy. And in order to make it healthy, you've got to have an impact on the financials. Thats how you invest in people and equipment and those kinds of things to assist in moving any organization forward.

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So its very, very important that we get that process feedback as quickly as possible and with a high degree of integrity. So over the past couple of years, we made sure that happened within this package. And again, its taking action against those data sets. Joe: You were part of the PAS Technologies story, along with Bob Weiner when he took over out there. And I was just really impressed with what happened. You were there at the ground floor. Could you explain your role in that turnaround? Tom: Bob Weiner was hired by PAS Technologies to be the CEO. And when Bob Weiner became the CEO, a week later he called me up, and he said, "I'm ready to implement a lead enterprise strategy in our company." Because thats the way Bob works and the way he thinks. He doesn't wait around to wait or hope for things to happen. So we immediately launched into a training exercise, getting all the executives together for a training exercise and Lean enterprise and our approach and strategy; for us to get a feel for them and the feedback of whats important to them. From there we launched out into the middle management training. During that training exercise, we like to use the shop floor to go out and collect information and data, which we did. And then we got a strategy out of that, and then we launched into training of the workers on the floor. Once that was completed, everyone on the same page, everyone understands the language and the lingo, we then came back and began to work with their internal continuous improvement group executing events on the shop floor. And because of the executive leadership and commitment, and the middle management commitment, I might add; and also the enthusiasm out of the employees on the floor, we were able to put some great cells into place, which had a huge impact on their turnaround time. In an engine overhaul, turnaround time is the king. Our goal was to be the best in turnaround of engine components in the world. So, the employees executed in that regard.

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Then we brought it across the entire enterprise. We went out to Ohio, we went to Ireland, and a couple of other locations that PAS owned and helped them set the foundation and strategy for lean enterprise and then turned it over to their internal group to continue the execution process. So, we go in there now as an advisory role. We're very proud of the things that they've done; what the internal group has been able to do to carry the Lean enterprise situation forward. So, we were kind of in there to help set the foundation. Our motto is that we're not there forever. We want to help train, execute, do what we call "technology transfer" to the organization and then end up in an advisory role because we know that internalizing the process is what makes them strong. Joe: You talk a lot about work cell groups. Is that a real area of expertise for you? Tom: Yes it is, actually. I can remember when we first started working with this one group, and they were talking about "cells" and I'm thinking about a red blood cell. Whats a cell? We quickly learned this notion of standard work after being called a concrete head about 52 times and being stuck in the old batch and cue method that I learned growing up through the organization. A cell really is a living and breathing entity. Its not just a group of machines put into a horseshoe shaped cell. But yet, its a group of machines putting, or processes, putting into an U-shape configuration. Then you add the people in there, which gives it the movement, the momentum and also the thinking relative of getting things to flow. So, the purpose of a cell really is a team of people dedicated to maximizing the affectivity and efficiency of not only the work being done, but the effect and efficiency of the people doing the work as well which is, in the Toyota world, called "standard work.

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So yes, a cell is really, from a manufacturing standpoint, and a production systems standpoint, a living and breathing entity, in my opinion, made up of people and some type of assets to be the best and the most efficient way of making something certainly better than your competition. Joe: Now, you've been doing this for eleven years as Lean value solutions. What changes have you seen take place in the Lean Six Sigma mode during that time? Tom: Well certainly, Six Sigma has come up on the radar scope, and as a combination of Lean Sick Sigma out in the world today, which is a good thing because, quite honestly, I look at continuous improvement people, whether you're in the Lean world, Sick Sigma world - whatever world, that when you are executing, or you're out on the shop floor, or you're in the middle of some type of process analytics that you need a quiver of tools to facilitate fixing a problem. These tools can be used at the appropriate times. I see a lot of people misusing tools and using the wrong tools for the wrong thing or misunderstanding this notion of "standard work," or whatever. I don't see a lot of changes. But, I do see something thats probably not new to anyone where companies will enter into the first one or two years of Lean implementation and then begin to slide backwards. Thats always a concern of most of us, and I'm sure you've seen that as well on how you keep your finger on that pulse. But, relative to the tools, relative to the philosophy I don't see a lot of change in it. Although, if you look at Toyota, they say its the last principal. Its never good enough. I think thats a very true statement. But, I still see companies that are very good at this as well, on the other side of the coin that just continued to say, "Hey, you know. I understand I'm going to take three steps forward and maybe a step backwards. But, its

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the right thing to do, and I'm going to continue to push". So hopefully, the energy behind Lean and some of the misnomers behind Lean are no longer there. It's not about eliminating the jobs. Its about- certainly about building, not destroying. Joe: I've seen more of a push of Lean, not being necessarily a cost cutting type venture, but a way to build quality and build customer base. I look at Lean as being more of a culture type thing in a continuous improvement; Six Sigma being more of a definition of going in and fixing a problem. Do you take a similar approach or is yours a little different? Tom: Well, I think we- I've had that discussion a lot of times with Six Sigma facilitators, and it's a great discussion that I have because at the end of the day, we're trying to get to the same place. I was at a workshop once where someone drew an umbrella on the board and inside the umbrella they said, anyhow, "this is a Lean enterprise and a Lean enterprise consists of understanding the philosophy, understanding the tools, understanding the 14 management principles, and then being able to lead an organization to this culture of change." And underneath was the Lean tools and happening to be underneath those tools was a Six Sigma enterprise. And it kind of made sense to me that if you're up here, and you're trying to lead an organizational Lean enterprise, obviously those principles and those values are very, very key and those tools to get you there to build that foundation are key as well. So I kind of look at it like that. I have a Lean enterprise; I've a series of tools. I'm going to understand the philosophy, I'm going to understand the management principles, and then I'm going to use these tools underneath, at the appropriate times in order to facilitate getting that company to where you quite rightly said, to be the best at speed, cost and quality.

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Joe: I think many times people just don't finalize projects. Lot of times, they just wander on instead of bringing finalities to what they have accomplished. Here is our next continuous improvement step. Tom: I can give you two examples that a company that spent over a million-and-a-half dollars; total productive maintenance is all they did. And then, we followed in behind them, and they did all these TPM on about, I'd say, about at least 80 assets. We went in put the cells together and got rid of 50 percent of those assets. There are companies that focus on 5S. And thats all they do. They 5S the heck out of everything. It looks beautiful, but from a financial standpoint, a customer satisfaction standpoint, and throughput standpoint. It didn't have a big, huge impact on them like they could have gotten out of it if they followed that roadmap that says I'm going to have a Lean enterprise in an umbrella, and then follow that roadmap through, by using a combination of all the tools at the appropriate place and time. So thats the way I look at that, and again to get that, to me, to get the biggest benefit of Lean, you really got to think about how you're going to approach it, and not just use one tool, but use them all to your advantage. Joe: Where do you see your company going in the future? Tom: Well, we really like the model I described earlier, relative to getting that data off the floor and helping focus more on those Kaizen promotion offices, continuous improvement offices. We really like the monitoring capability of it because we could move faster and quicker, and certainly be more expedient and be more -- I guess, be more intelligent about where we go and where we put our resources. So we're reluctant at first, and after two and a half years working through that, we see a great opportunity for us to bring this new concept into the workplace. And I think thats going to keep us really busy.

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The good news is that we, in working with our Japanese Senseis, in my previous life, which was five years, seven days a week, pretty much 16 or 17 hours a day, those core concepts of the principles of Lean philosophy are stuck with us, so that we see this technology piece and this execution piece faster and quicker and cleaner, as they're being really our future because it could fit into small, medium or large companies. So we're pretty excited with that. So that probably be or is going to be our next transition. Joe: It sounds pretty exciting. You have a real separation from other companies, with the software available, and more importantly, the understanding of the software. Is there anything you like to add before we finish up here? Tom: No, I really appreciate the time and the conversation. I love to talk about this stuff. People will often say to me, "how during this change process did you ever laugh as long?" and all that stuff. Its the people that I meet around the globe actually, from all levels of the organization, to things I get to see on the shop floor. I even, still today watch that show, "How Things are Made" and I go, "boy thats like my life." I get to walk to shop floors and meet people and understand some of their ambitions, some of their goals, some of their challenges, and to be able to facilitate helping them out either through tools that we've learned, experiences that we've had, technology that we can point them to or other things, as a real benefit to what we do. And we've been kind of blessed, our entire group really, to be able to spend the time even though we were complaining at the time, to be able to spend the time with the second tier consultant to Mr. Ono. Again, thats what drives us every day, is because we know we can bring value to an organization.

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Joe: Where we would someone get a hold of you, Tom? Tom: Well, we are on the website. Our website is www.lvsillc.com. It may come up to www.lvsionline.com is another way. Our office number is 860-370-9657 and my extension is 11. My cell phone 860-836-6427, and give us a call, and we'd be happy to talk with you about anything we've discussed today. Joe: OK. Well, I've certainly enjoyed it. I went through your website, and I noticed in the pictures that the majority of your pictures, there you are in roll-up sleeves on the shop floor. And looking at this, I thought, "Oh, this guys walking the walk. Thats what is important to him. Its not so much of how well I look on the website, the picture here, its what I do. I compliment you for including those pictures; I think its very important.

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Joseph T. Dager
Lean Six Sigma Black Belt

Ph: 260-438-0411

Fax: 260-818-2022

Email: jtdager@business901.com Web/Blog: http://www.business901.com Twitter: @business901

What others say: In the past 20 years, Joe and I have collaborated on many difficult issues. Joe's ability to combine his expertise with "out of the box" thinking is unsurpassed. He has always delivered quickly, cost effectively and with ingenuity. A brilliant mind that is always a pleasure to work with." James R.

Joe Dager is President of Business901, a progressive company providing direction in areas such as Lean Marketing, Product Marketing, Product Launches and Re-Launches. As a Lean Six Sigma Black Belt and a certified coach of the Duct Tape Marketing organization, Business901 provides and implements marketing, project and performance planning methodologies in small businesses. The simplicity of a single flexible model will create clarity for your staff and as a result better execution. My goal is to allow you spend your time on the need versus the plan. An example of how we may work: Business901 could start with a consulting style utilizing an individual from your organization or a virtual assistance that is well versed in our principles. We have capabilities to plug virtually any marketing function into your process immediately. As proficiencies develop, Business901 moves into a coachs role supporting the process as needed. The goal of implementing a system is that the processes will become a habit and not an event. Part of your marketing strategy is to learn and implement these tools.

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