July 5, 2010
TL;DR: Invest in people, setup processes, continual improvement and think in flow.
When I was in Bali, Mark from wooden-ships.com took me to see the company’s factory which was amazing. They had been running the business for over 10 years and now had nearly 300 employees.
The idea of a business creating that many jobs to me is amazing. His wife and partner Paola told me that Mark was really into “Lean.” I knew about the Lean startup but didn’t realize it was derived from others in the manufacturing world.
I right away started telling Mark about how all his operations should be online, less people and more technology. He laughed. I thought he was silly. Mark suggested I read the Toyota Way to understand things.
Let me summarize some of the “old” things that go on in Mark’s operation:
– Cards. They have a pull system where orders are pulled for new material every 15 minutes or so.
– All orders are custom made and minimal inventory is stocked up.
– They removed their computer system as it was slowing down the process
– They removed places people could hide errors and had a board detailing hourly performance of the plant.
I’m sure there are more but you’ll have to visit Mark to learn the rest.
I wanted to highlight the major things I found interesting in the Toyota Way which is one of Mark’s bibles and a key to adopting a lean system within your company.
– Continuously invest in people and promote a culture of continuous improvement.
– “Muda” (waste) is a term for anything that takes time that does not add value to your customer. Map out this process to help eliminate.
= Wastes include: overproduction, waiting, unnecessary transport, overprocessing, excess inventory, unnecessary movement, defects, unused employee creativity
– 4Ps of a successful company: Philosophy > Process > People & Partners > Problem Solving
– Accumulate facts and learn by doing.
– “Pull system” where things are only delivered when they are needed. Think about supermarkets replenishing rows when the stock goes down. Think just-in-time.
– Traditional process is improve process time and replace people with equipment (Noah’s former style).
– Things built in cells with close arrangement of people, machines or workstations in a processing sequence. One piece flow. Only build what is needed.
– The entire system stops when defects are found. Then go to the 5 why’s to really get to the root cause of issues. In other method of batches it can take way too long to realize problems in the process.
– Decisions are made through looking at many alternatives and including as many stakeholders as possible.
– Noah’s thought: Maybe consider using sound as well as visual cues for how things are going in your business. At the Gambit office we heard some other company always ring a bell and go crazy every time something happened. Definitely seemed like a fun thing to do.
– Need visuals for the business and technology supports what people do. This is mapping out flows and clearly displaying success metrics. They discussed how metrics don’t always show why things are happening. Bottom line: you can visually see almost instantly if something is off.
– Everything is documented. Knowledge is shared and encouraged among employees. All the while trying to see how to improve the processes already in place.
– Training a new employee can take up to 3 years. They are patient in their hiring / culture and training.
– Try to keep all key documents / decisions boiled down to 1 page.
= current situation, proposal, benefit / cost analysis, plan, implementation, controls, timeline
– Plan, Do, Check, Act. Repeat!
– Establishing metrics that are clear to all employees:
Metric / Unit of measure / Baseline / Target / % improved / Owner
– Noah’s Suggestion: Setup aweekly group session to improve one thing. 52 increases at end of year. You can also have this be anytime so you may have > 365 improvements. If they are even 1% per improvement or less that compounds to some big #s.
While traveling Europe I have way more time to read, do you want me to keep posting these reviews? Any suggestions on books?