Michigan Lean Consortium Lean 103 Leading Leaders

1. Michigan Lean Consortium Lean 103 Leading Leaders "The best way to predict your future is to create it!” Abraham Lincoln

2. Lean 103 Agenda • Welcome And Introductions • MLC Overview • Red Bead • Gemba walks • Gemba walk at Subway • Long term Lean planning and Hoshin • Leaders Standard Work • Culture change and employee engagement systems • Wrap Up Dennis Sergent 517-285-5500 dsergent@srgnt.com - 07/09/2013 - Page 1

3. Introductions • Count off • Go meet others with the same number! • Learn: • What they want to get out of today • One hobby that they enjoy • What Lean means to them in their daily job Dennis Sergent 517-285-5500 dsergent@srgnt.com - 07/09/2013 - Page 2

4. Lean 101-102-103 Detailed Topic View Lean 102 • Value stream Mapping • Kanban • Heijunka • SMED • Visual Management • One-Piece Flow • Facilitation Lean 103 • Red bead – systems thinking • Hoshin Planning • Gemba Walks • Daily Employee Engagement • Leader Standard Work Lean 101 • History • House • Lean • How it differs • 8 Wastes • Standard Work • PDCA/PDSA • Poke Yoke • 5S • Kaizen • Auditing

5. Lean 103 Agenda • Welcome And Introductions • MLC Overview • Red Bead • Gemba walks • Gemba walk at Subway • Long term Lean planning and Hoshin • Culture change and employee engagement systems • Leaders Standard Work • Wrap Up

6. 2014 Overview

7. Our Mission Offer diverse educational programs and workshops on lean topics that promote sharing of innovative practices, networking and fostering a sustainable advantage for Michigan’s public, private and educational organizations.

8. What We Do • Knowledge Sharing Events • Training • Expert Speakers • Leadership Panels • Knowledge-Sharing • Networking Lean Leadership Training with Dr. Jeffrey Liker • Benchmarking Visits • “Go and See” learning • Front line and Leadership Q&A Micron Manufacturing Benchmarking Visit

9. What We Do • Annual Conference • Keynote speakers • Breakout sessions • Industry roundtables • In-depth training Andy Dillon • Lean Projects • State of Michigan • City of Detroit • Center for Financial Planning Michigan Lt. Governor Calley

10. What We Do • Annual Healthcare Symposium • Keynote speakers • Breakout sessions

11. Who We Are Jim Manley, Chair Dennis Sergent, Vice Chair Mike Taubitz, Secretary Dave Kippen Debra Levantrosser, Ad Hoc Member Rich Wolin, Ad Hoc Member Betsy Williams G.S. Clarke, President Eric Walters Jessica Jannaman Current MLC Board of Directors • Formed in 2008 • Non-profit, all volunteer run by committees • Our vision • All public, private and educational organizations in Michigan • are at the benchmark level of efficiency and competitiveness. 6

12. Our Members • 500+ and growing • All across Michigan • Novice to seasoned practitioners • Health care, education, manufacturing, energy, consulting and more • Both individual and organizational membership

13. Join Us! • Affordable • Access to organizations, leaders and best practices • Monthly Events & Annual Conference • MLC-sponsored Projects • Networking

14. Get Involved! Visit www.MichiganLean.org Connect on LinkedIn Like us on Facebook Join a Committee Suggest Event Topics

15. Upcoming Events November 21: Visual Stream Mapping, Event by Amway Ada December 5: Year End Event and Networking Reception Troy Please let us know if you have ideas for an event or have an interest to be a host. Email: register@michiganlean.org

16. Reminders • Please return your name tags and lanyards at the end of the event • Please complete the survey that will be emailed to you! If you complete the survey you will receive a Certificate of Attendance. THANK YOU Your support and feedback helps us to continually improve!

17. Introductions/Announcements Your feedback is important to us! • During Introductions please let us know if you have any Job Opportunities in your organization. • Reminder that we can also post the opening on our website. Email us at coordinator@michiganlean.org with the details.

18. Thank You To Today’s Sponsors!

19. Lean 103 Agenda • Welcome And Introductions • MLC Overview • Red Bead • Gemba walks • Gemba walk at Subway • Long term Lean planning and Hoshin • Leaders Standard Work • Culture change and employee engagement systems • Wrap Up Dennis Sergent 517-285-5500 dsergent@srgnt.com - 07/09/2013 - Page 18

20. The Red Bead Experiment • Dr. W Edwards Deming

21. White Bead Production Corporation JOB POSTINGS • 4Willing Workers. Must be willing to put forth best efforts. continuation of job is dependent on performance. Educational requirements minimal. Experience in pouring beads is not necessary. • 2 Inspectors. Must be able to distinguish red from white, able to count to 25. Experience not necessary. • 1 Inspector General. Same qualifications as Inspectors and have a loud voice. • 1 Recorder. Must write legibly, good in basic math be sharp

22. White Bead Production Corporation Procedure WBD-HT81-C: White Bead Generation. • Required Tools: Paddle, for retrieval of beads. • Required Materials: Container with beads.

23. White Bead Production Corporation Process Steps • Ensure paddle holes are empty of all beads. • Grasp the paddle by the handle. Ensure that the holes are orientated facing upwards. • Slide the paddle down into the beads until paddle is covered with beads. Pick up paddle to 4 inches above the bead level. • Tilt paddle at a 47 degree angle to release excess beads. • Withdraw paddle, ensuring that one bead is in each hole. • Present to Quality Control for count of beads produced. • Empty paddle back into bead container.

24. White Bead Production Corporation Do it Right the First Time!

25. White Bead Production Corporation Take Pride in Your Work!

26. White Bead Production Corporation Procedure Compliance Is Mandatory.

27. White Bead Production Corporation The Goal is 0

28. White Bead Production Corporation The Goal is 1

29. Lessons Learned • It's the system, not the workers. If you want to improve performance, you must work on the system. • Quality is made at the top. Quality is an outcome of the system. Top management owns the system. • Numerical goals and production standards can be meaningless. The number of red beads produced is determined by the process, not by the standard. • Rewarding or punishing the Willing Workers had no effect on the outcome. Extrinsic motivation is not effective.

30. Lessons Learned • We can use statistics to create a quality control chart and look for problem areas and to predict future performance. • A faulty item is not a signal of "special" causes. A process can be stable, in-control and be producing 100 percent defective items. "Defects" are defined by specification, not by process. • Rigid and precise procedures are not sufficient to produce the desired quality. • Keeping the place open with only the "best" workers was acting on "superstitious" knowledge.

31. Lessons Learned • Management was "tampering" with the system by rewarding and punishing the Willing Workers. • )People are not always the dominant source of variability. • Slogans, Exhortations and Posters Are At Best Useless To The Willing Worker.

32. Lessons Learned Thoughts from a Willing Worker named Ann. A Willing Worker named Ann, after the experiment on the Red Beads came to a close, expressed to Dr. Deming some provocative thoughts. She wrote her thoughts down in the following letter: “When I was a Willing Worker on the Red Beads, I learned more than statistical theory. I knew that the system would not allow me to meet the goal, but I still felt that I could. I wished to. I tried so hard. I felt responsibility: others depended on me. My logic and emotions conflicted, and I was frustrated. Logic said there was no way to succeed. Emotion said that I could by trying. After it was over, I thought about my own work situation. How often are people in a situation that they can not govern, but wish to do their best? And people do their best. And after a while, what happens to their drive, their care, and their desire?”

33. Dr. W. Edwards Deming: 1900 - 1993 The Deming System of Profound Knowledge Appreciation of a system Knowledge of variation Theory of knowledge: Knowledge of psychology • Once the individual understands the system of profound knowledge, he will apply its principles in every kind of relationship with other people. He will have a basis for judgment of his own decisions and for transformation of the organizations that he belongs to. The individual, once transformed, will: • Set an example • Be a good listener, but will not compromise • Continually teach other people • Help people to pull away from their current practices and beliefs and move into the new philosophy without a feeling of guilt about the past."

34. Lean 103 Agenda • Welcome And Introductions • MLC Overview • Red Bead • Gemba walks • Gemba walk at Subway • Long term Lean planning and Hoshin • Leaders Standard Work • Culture change and employee engagement systems • Wrap Up Dennis Sergent 517-285-5500 dsergent@srgnt.com - 07/09/2013 - Page 33

35. Lean Leaders lead in a very different way • By setting the vision(more why than how) • with dialogue, Policy Deployment (Hoshin) • and setting challenging expectations at the individual level • By building systems and processesthat cascade responsibility • Standard Work, Kaizen, Kanban, Stop-the-Line (Andon), 5S as tools that truly empower • Learning, Development & Hoshin as broader systems • By influence and example • by demonstrating knowledge of the whole system • by getting into the messy details on the shopfloor • by coachingand teaching • through PDSA-PDCA cycles of learning & improvement • through questioning Dennis Sergent 517-285-5500 dsergent@srgnt.com - 07/09/2013 - Page 34

36. SUBWAY GEMBA WALK!

37. Leaders transformation into a gemba walker • Current state • Customer focused future state • Mgrs in passive role • Unprepared to participate • Low confidence in lean knowledge • Uncomfortable discussing lean • Feeling incompetent in gemba • Marginal value, check-the-box exercise • Mgr-driven experience • Get the answer, ace the test • Good prep, mgrs ready to participate and lead • Confident observer in gemba • Competent in lean management system • Comfortable coaching lean management in gemba • Valued, enjoyable investment of time

38. What problems did we face during the last work day (or shift)? What can we do to solve these problems? What tasks do we have to achieve today? How are we organized to achieve that workload? Are there any important issues that may affect the jobs today? What are your desired outcomes? Are there any special events planned today? How can I help you? Who can we be more successful in improvement? Frontline - Process, Problem Solving, Elimination of Waste Mid-Level - Resources, Team Development, Unevenness, Overburdening Executive - Systems, Strategic, Unevenness Gemba Walk – How do you go see:

39. Respect for People and their Workplace, Including Self Go And See Set an Example Leading, Getting Feedback, Developing, Planning, Improving Engage Team, Think and Communicate Together Set an Example Review A3s, Control Charts, One Pagers - Show Them Yours Too Key Measures, KPIs Adapt Plan and Actions (PDCA) Set an Example Questions to Engage Them and Adapt The Plan See next page Gemba Walk – additional things to think about

40. Involve and engage every employee, every day WHY? The real key to success:

41. Real World Example

42. Real World Example

43. Real World Example

44. Real World Example

45. Share Your Experiences • What Gemba Walk processes have you seen work, or not work!

46. Lean 103 Agenda • Welcome And Introductions • MLC Overview • Red Bead • Gemba walks • Gemba walk at Subway • Long term Lean planning and Hoshin • Leaders Standard Work • Culture change and employee engagement systems • Wrap Up

47. Definitions you need to know… • Hoshin = a course, a policy, a plan, an aim, a goal • In Japanese means “Shining Needle” of a compass • Key Measurable (or Metric) = • KPI = Key Performance Indicator • CSF = Critical Success Factor • Efficient = Doing things right • Effective= Doing the right things Policy Deployment • Kanri = administer, manage, control, charge of, care for • In Japanese means “Control /Channeling”, “Reason or Logic” The Key Influences of the success of the business. A business measure that focuses action. Not one or the other, we must have BOTH

48. Misaligned Values/Goals

49. Aligned Values/Goals

50. Aligned and Focused Values/Goals