Leveraging lean learnings to face the crisis

Veygo is a spin-off of Admiral Group, the insurance company behind Confused.com (the first insurance comparison site in the UK). I visited them back in January, in Cardiff, to learn about their lean journey. My point of contact – and excuse for visiting a gemba outside France – was the head of Veygo and fellow Frenchperson Jean Baptiste Limare. Our gemba walk revealed how much Lean Thinking has helped the company. Last week, in the light of the recent developments with the Covid-19 pandemic, I decided to follow up and conduct a bit of a virtual gemba walk to see how the company was faring after switching to a remote operation.

Working from home may be shrugged off as a non-issue for a digital company. After all, remote coding is not new to the digital world, with expert teams often scattered across different locations. But is it really that easy? And can Lean Thinking help to make it work?

During our call, I also took the opportunity to revisit with Jean Baptiste the three points we had intensely discussed a couple of months back: knowing your customer, learning to deliver at speed and with quality, and developing autonomous teams.


BEFORE THE CRISIS

Jean Baptiste started at Admiral a few years ago. His job was to design new insurance products, but he knew the company needed to adjust its offering to a market in which younger generations no longer buy a car but rather use a mobility service. Given the circumstances, the insurance world would have to follow suit and offer temporary insurance coverage for whatever scenario young drivers might find themselves in, from learning to drive with a parent to sharing a car or occasionally renting one. Such policies would have a duration that can vary between one hour and 30 days. As the company’s motto states, “At Veygo, our goal is to provide the best insurance options for drivers with no cars.”

Jean Baptiste also meant to demonstrate that insurance contracting and associated interactions can be digitized. Like most insurance companies, Admiral still heavily relies on mail and call centers to interact with its customers or would-be customers. JB was determined to develop a contactless insurance product. That’s when Veygo was born. It was mid-2016.

Four years later, the company is making more than half a million sales per year, customer reviews are very positive, and the assumption that there is a market for digital native on-demand motor insurance is confirmed – at least when it comes to Veygo’s insurance products (temporary cover and learner driver’s car insurances). Over time, the team grew from six to forty-eight people, between Q2 2017 and Q3 2018. It is now 53-strong.

“Lean has really helped me,” Jean Baptiste told me during our gemba walk in January. Jean Baptiste – or JB, as his British colleagues call him – took his first lean steps on his own, reading book after book. At first, he was attracted to the tools (aren’t we all?) and saw Lean Thinking as a sort of Agile 2.0. – a compliment paid to lean, I would say, since most “agilists” tend to consider it a thing of the past. Lean tools, JB reckoned, were going to provide the means to be less people-dependent and to eliminate waste, while helping to sustain a massive flow of new features for the website. Back then, JB’s favorite KPI was the number of releases that could be achieved over a given period of time. As Taiichi Ohno’s Workplace Management reminds us, we are all full of wrong ideas on how things work. And JB is very transparent about the topics he actually changed his mind on. And today he firmly believes that those changes of mindset continue to help him and his teams during the Covid-19 crisis.

The first such change required the help of an external sensei, who showed up at Veygo with a question: do you know your customers?


DIGITAL AND LOCKDOWNS DON’T MEAN NOT TALKING TO CUSTOMERS

At the time, the sensei’s question had come as a blow. In a world of fast growth, digitization, websites, agile and millennials as customers, Veygo’s focus had been on sprints and fast delivery. At the time, the scrum teams were fighting for minimal management interference, so long as they delivered, and JB’s vision for the company was very much a group of technical silos he was trying to supervise and align.

Putting the customer back at the center and asking how to better grasp her needs, or what level of quality she perceived, was mind-boggling at first. How do you actually talk to customers when your entire business model is to design a “buy what you need, no assistance needed” website? The fact that no one had to talk to the customers was considered a success factor. And we of an older generation are not allowed to laugh either: in our time, we thought we could do the same with hypermarkets or shared service centers.

It turned out that five out of six members of the Veygo management team had actually never talked to a customer. Product owners thought out features without actually checking them with real customers. Additionally, if a feature had a poor impact on sales, it was unclear whether the idea was wrong in the first place or whether the execution failed to add value for the customer. “Either way, we were not learning,” JB sighs.

And indeed, I had seen during the gemba walk a major shift from that initial approach, with scripts of customer interviews, a takt time for those interviews, NPS or CES indicators. On the Veygo website, FAQs and Help Centre articles are flourishing, fueled by the conversations the team has with customers. Ever since the lockdown began, the live chat feature has become as essential mode of communication with customers.

Discussing with customers led to some interesting revelations:

  • A learner driver insurance had until then been considered a practical, financial feature to cover against risks when kids are building up their driving experience in their parents’ car. As such, the insurance guarantees that, in case of a collision or crash, the parent’s No-Claims Bonus is unaffected. Interviews with parents provided another valuable insight: driving with their kid and passing on their experience was seen by some of them as an unexpected opportunity to spend some time with their teenage sons or daughters (many of them, at that age, tend to avoid family time and distance themselves). This important emotional factor is now being taken into account by Veygo teams.
  • Many customers complained that they struggled to find help on the site. As reaching out for a contact in Veygo was not obvious either, they were frustrated or unsure whether the products were right for them. This led the team to develop the Help Centre significantly, dramatically improving the customers’ ability to self-serve.

This new focus on customers has not disappeared with the Coronavirus crisis.

JB’s aim was to sustain business continuity while protecting everyone at Veygo. Preparation for a possible lockdown actually began as soon as the first villages in Northern Italy were quarantined on February 21st. It took Veygo 72 hours to plan and prepare for the switch to a 100% remote operation, with laptops and dedicated VPN for remote access provided to every team member. They also worked on the impact of remote work on each job and studied worst case business scenarios – including a lockdown of the Cardiff areas as a result of a local outbreak, with the rest of UK still operational and busy with its business-as-usual. They were ready by early March and switched to remote working one week before the UK enforced a full lockdown on March 23rd.

The teams were still battling with bad chairs and new remote tools when JB asked them what could be done to help National Health Service workers who may need a temporary insurance cover to go to work. Action was immediate: the decision to offer a 75% discount for NHS members was made on Wednesday, March 18 at 9 PM and the new feature was in production by 4 PM the following day. Not bad for a project driven and executed remotely! Within a week, they had 200 requests to benefit from this offer and many positive comments. This gave more meaning to daily tasks and routines and highlighted the importance of acting as a team. JB tells me of how people exchanged internal messages saying how proud they were of their achievements and to be part of the Veygo venture.

As he reflects on today’s situation, with developers and product managers no longer working in the same space, JB expresses a worry that output (deliver at speed) may once again overtake outcome (deliver value). The activity is lower of course – particularly on the Learner Driver insurance covers – but activity for Temporary covers has only decreased by 30%.  And the feature release activity is flowing, unimpaired.


CODERS SHOULDN’T HAVE TO CHOOSE BETWEEN GOOD AND FAST

Initially, quality had not been JB’s prime objective. With Veygo celebrating the number of releases and never talking to customers, questions on current quality issues were spurring frowns, if not laughs, from the teams: “We’ll do quality when we have time” or “80% (or even 50%) of many things is far better than 100% of a few items”.

We get a similar response from teams when we ask them about kaizen – “When we have time,” they often say. Kaizen, like quality, is an investment in the future that Deming had perfectly understood. “The result of long-term relationships is better and better quality, and lower and lower costs,” he said. Deming also recommended we do away with final inspection and develop built-in quality. “No one knows the cost of a defective product – don’t tell me you do. You know the cost of replacing it, but not the cost of a dissatisfied customer.” This is food for thought: with the pandemic, new customer expectations are bound to emerge and those who fail to perceive and meet them will found themselves out of the market really quickly.

Veygo decided to have a go at quality in October 2018. They saw it as a quick bug-cleaning campaign at first; that couldn’t have been further from the truth. The team found they had many customer complaints, but few of them were visible and most were not addressed. Critical functionalities on the website didn’t work: for example, the confirmation of an insurance coverage went in a loop after signing up for it, leaving the customer in doubt as to whether she had actually purchased insurance coverage.

When the team tried to address and fix those issues, it turned out that they did not trust the reported bug backlog, that unit and integration tests were poorly designed (if not absent), and that test programming was an unknown notion. Developing code as quickly as product owners could pile up new features had been their sole motto up to that point.

They sat down and worked on it: developers shouldn’t be asked to choose between good or fast. Therefore, the product development culture was changed to include quality. Bugs were tracked in bug review sessions, a tool was secured to check difficulties encountered by customers on the website (tracking their behavior and highlighting potential frustrations with SessionCam), and developers were trained to develop tests. This quality intervention paid off and the conversion rate shot up.

Another positive side effect is that feature ideas now come from actual user problems: the decisions on new developments are consequently easier to make and more obvious to all, and consensus is reached more easily.

JB can see that new projects today are impaired by the difficulty to assess features with customers: what is the customer outcome? How to define success? “Brainstorming is harder to achieve remotely and, as a consequence, serendipity effects on innovation are less likely. Having a coffee with a colleague to discuss a problem in person is just not the same thing as doing so on video call. This is something we will have to pay attention to in the coming weeks.”


AUTONOMY DOES NOT MEAN INDEPENDENCE

We don’t how long the lockdown will last or whether we are bound to see successive waves of lockdowns throughout 2020, as this will largely depend on how fast we can produce protection and testing for us all. In such a scenario, learning to work remotely effectively becomes imperative. But how do you actually develop team autonomy in such a context?

Veygo’s experience with this over the past couple years can teach us a lot. You don’t grow from six to fifty-three people in two years without a major reflection on the onboarding process and how to organize teamwork. There are several aspects to this: you need to create a reliable management team, align everyone around common goals, and foster collaboration on the delivery flow. This may also mean a complete change of behavior from top management.

Back in January, JB had told me the story of how they created standards for developers. When he started to go and see how developers worked, his actions were perceived as an audit and not much came out of it. Then he thought about developing work standards and tried to enforce them. That did not work either, as the teams became more and more defensive against any intrusion.

This prompted JB to think hard about what autonomy means and to introduce a completely new approach:

  • First, clarify the long-term goals the team wishes to achieve on lead-time and quality. One board in the Veygo office displays this very clearly: developers now track the bug backlog (quality), the time-to-market for a new feature (delivery), and the website performance (page load speed and the number of releases per week). Customer satisfaction is analyzed both through interviews and NPS scores at purchase. Feedback from customers is gathered by means of independent customer surveys that regularly yield a high score given the nature of those insurance products. And by the way, customer satisfaction is still high today, in spite of the lockdown.
  • Then, introduce a form of one-piece flow (a maximum of two products in any given production cell) with an andon system and a chain of help from management in place. This is something Veygo still struggles with as there is a trade-off to be found between delivering at takt time and autonomy and self-reflection. In this lockdown situation, they have a daily scrum meeting still in place and a form of andon on tickets that are obviously stuck.
  • Lastly, JB is learning to develop and nurture the right conditions for kaizen (value for customers, clear goals, andon, dojo). “I have learned the hard way and I picture myself today rather like a gardener: nurturing, feeding and waiting for the seeds to grow and blossom,” he comments. Kaizen is also an opportunity to “adjust” the teams as new potential leaders emerge: personalities geared towards learning, collaboration and self-development typically stay and are encouraged to continue growing, while others may well end up leaving (it has happened). The new PPM – Principal Product Manager – on Temporary coverage and Learner Driver insurance, Dan, is a lean enthusiast and he now steers both the Product (features) and Operations (developments) teams.

During the gemba in January, JB had walked me to a board showing a kaizen approach in six steps led by a scrum team, with support by JB and Simon, the other PPM. It was focused on smoke tests, which preliminarily simulate the would-be customer journey with the new code to detect potential failures. Some 40 hours were lost every week running smoke tests that do not work. The first pass on this kaizen identified parameters to be reworked, much to the relief of developers. Faulty smoke tests went down from 97% to 0.4%. In turn, this revealed new issues such as a slow process to release new features into production: they are targeting a 50% decrease and continue to work on it remotely. But JB thinks more work on this is needed: “Cleaning and sorting is one thing, but we need the scrum teams to further investigate root causes and find ways to prevent recurrence.”

Talk to your customer, work on quality, develop autonomy and teamwork: JB believes these major shifts in his mindset helped him to organize the new remote working setting. “The major advantage of lean, as I see it,” JB concludes with a smile, “is that we are learning much faster: we see our problems faster, understand our misconceptions quicker and change accordingly. That is a major advantage when you are trying to disrupt a market, and it becomes even more crucial when you are facing a crisis such as this one!”

Four types of problems, in the management system

FEATURE – A lean management system is necessary to effectively run a business. Can Art Smalley’s four types of problems framework help such a system to focus on what’s really important?



Words: Gustavo Adolfo Gomez Pineda, Plant Manager, Schneider Electric Colombia and Senior Advisor, Lean Institute Colombia.



I have studied and practiced Lean Thinking for the past 20 years, mostly learning by doing – on the job – and using our plant as a laboratory. It was our drive to always run experiments that led us, in September 2019, to try and implement the ideas contained in Art Smalley’s Four Types of Problems. The book had recently been translated into Spanish and, upon reading it, I was immediately impressed.

We set off to determine whether or not the lean management system that we had put in place in our plant could match Art’s categorization of problems. We began with a workshop we co-organized with Lean Institute Colombia. The (many) questions that came out of it were really our starting point to run this experiment.

The four types of problems Art Smalley describes in his book seemed very interesting to us, but we struggled to marry them with our management practices at first. There were clearly some common points, but overall we found it difficult to recognize the different types of problems in our context. Little did we know Art’s categorization would soon turn our management system on its head!

Not knowing exactly how to approach this experiment, we decided to look at the four types of problems in the context of the lean house, thus making the link to our lean practices (from standards and Kata to the Balanced Scorecard) more explicit. That way, we were able to create an interesting model that we integrated in our weekly management business review.

Before long, the walls of our Obeya (where the management review takes place) reflected the shift we were hoping to create with our experiment. By rearranging our boards on the walls to reflect the four types of problems, we changed the way we talked about issues at the plant. 


THE STRUCTURE OF THE MEETING

Our weekly management meetings always start with the customer. We ensure they are satisfied and analyze any complaints we have received. Then, we begin to look at the different types of problems:

  • First, we analyze the Type-1 problems – abnormal conditions that are rectified through quick troubleshooting – that have been “open” for more than five days. We look at one at a time, to really ensure we are not missing anything.
  • We then follow up on any open Type-2 problems – real gaps from the standard that required more structured problem solving – and see if we need to escalate any Type-1 problems into Type-2. Type-2 problems are tackled with dedicated A3s. At this point in the meeting, we use the Balanced Scorecard (a tool we are very familiar with) to assess how we are doing against each of our targets. We have given ourselves a 30-day timeframe to solve Type-2 problems. If we can’t do it in a month, we immediately know we need to analyze them more in depth.
  • For Type-3 problems (those referring to our target state, the strategic questions we need to answer to improve our performance), we look at our hoshin plan. We also try to “anticipate” any potential risks we might experience in the factory over the next three months, using the “proposal A3”.
  • For us, Type-4 problems (those pertaining to innovation) are linked to our digital transformation, which is also integrated with our hoshin. In particular, we have three digital initiatives that we consider very important for us strategically.

In its current form, the meeting lasts around two hours. We found that a weekly two-hour meeting is more effective than a monthly eight-hour one: it allows to get into quite a bit of depth while making it easier for my managers to come prepared.


CHANGING HOW WE MANAGE

As much as we lean thinkers see problems as opportunities, we cannot expect this to be the case for every single person in our organizations. In fact, it is often difficult to talk about problems. And even when they are openly talked about, people find it hard to do so in a structured way. Initially, at Schneider Electric, we encountered some resistance in the team: they didn’t see the connection between the four types of problems and their work. Nonetheless, we persevered, knowing that we couldn’t look at the four types of problems in isolation: they had to be built into our approach, from VSM to hoshin. The change over to the four-types-of-problems system was hard, but people have now interiorized it. It’s a routine for them, part of their DNA. It’s provided us with a common language, much like A3 and VSM had in the past.

As I look around, I see a lot of companies that are not able to identify what problems should take priority, and that’s because they can’t distinguish between the different types of challenges they are faced with. For example, there is a clear tendency in the business world to treat Type-1 and Type-2 problems as Type-3 or Type-4 (for instance, implementing an App as a workaround rather than truly understanding and fixing the problem at the gemba). What’s worse, many companies only focus on Type-1 and Type-2 problems, forgetting about the critical Type-3 and Type-4. It happened to me as well, but I think it’s important to move away from that – something Art’s methodology forces you to do.

It’s been incredible to see how the four types of problems have transformed the way we manage our factory, perfectly complementing the lean management system we have built over the years. The biggest contribution of this new approach has been teaching us the importance to try and foresee problems (proactive) as opposed to simply responding to them once they occur (reactive). I have found great value in starting to look into Type-3 and Type-4 problems, even though I have to admit that Type-1 and Type-2 problems often take up all of the time we have available.

The beauty of this approach is that by consistently focusing on those Type-2 pain points, you are gradually building a smoother operation, which in turn will give more time to focus on more strategic issues. At Schneider Electric Colombia, we are seeing things we didn’t see before and we are attacking problems in a more effective way, whereas before we often mixed things up and didn’t deploy the right response to our issues. There is no doubt that we are now looking at our work in a more complete way, using a more logical structure for our work as managers. We are more confident in our ability to tackle whatever challenge we might face.

We have even seen a slight increase in productivity over the past nine months. Having reduced the number of Type-1 problems we experienced, people can now contribute more to the advancement of the plant. In fact, the majority of the problems we have now come from the outside – for instance, a supplier not sending parts due to the pandemic. 


CAN THIS HELP COMPANIES POST-COVID?

Whatever your hoshin plans were for 2020, you likely had to go back to the drawing board. I believe that this is the perfect time to integrate the four types of problems into your activities, not least because in a crisis we tend to stick to Type-1 and Type-2 problems all the time. But the fact that the present is tumultuous shouldn’t make us forget about our future. Firefighting alone is not enough to get yourself out of the crisis.

Type-3 and Type-4 problems are about getting to better levels of service and reinventing yourself respectively. Both things are now more crucial than ever. Faced with Covid-19, many organizations have appeared paralyzed, uncapable of taking action (any action). But when things get tough is precisely when you have to try new things, run even more experiments than before.

The modern manager has to work with the four types of problems in mind.

The Fire Department transforming itself and its city

Interviewee: Brad Brown, Assistant Chief of Administration, Grand Rapids Fire Department – Michigan, USA



Roberto Priolo: Grand Rapids is undergoing a city-wide lean transformation. How does the lean journey of the Fire Department fit into it?

Brad Brown: The Fire Department is really at the forefront of the city’s lean initiative. We started around 10 years ago with A3s and looking at the ROI for making systemic improvements. Once we started to see some results, we went to the rest of the city and began to lead the lean transformation. We regularly teach other city departments how to think and act lean.


RP: Ten years on the journey! Can you take us through it briefly?

BB: It is incredible to think of the many things we have learned in the past decade… and of all the mistakes we have made!

We started during the economic downturn of 2008. We were not in a good place back then: we had to lay off firefighters, we were having trouble answering our over 20,000 emergency runs a year, and our infrastructure was crumbling. We were outstripping our resources. The city then reached out to a group of private-sector business professionals and asked them to help them implement lean thinking. They started with the A3 problem solving tool, one of our favorite methods to date.

Unfortunately, it was still a push system: the city was telling the department directors they had to use lean. At the time (I had just come out of fire suppression), my job was to ensure the lean mindset would “trickle down” to the troops, who didn’t want it. There was a lot of turmoil. It was only after several years of working on projects that improved our people’s every-day lives that we were able to switch to a pull system. I am really happy to say that today we have great leadership and great labor management relationship: we are all sitting at the table to solve problems together, union workers and senior leaders.

There’s more. At first, tools and techniques were at the heart of what we did, whereas now we are focusing more on the cultural side of our transformation.


RP: How has the context around you changed in the past decade?

BB: According to the US Bureau of Labor Statistics, Grand Rapids – a city of just under 200,000 located in West Michigan – is one of the fastest growing economies in the country. That means we have a lot of buildings going up at the moment, which means increased risk of fire and a higher call volume for our 11 stations and 200 firefighters. We are no longer doing lean to cut costs; now we are doing it to increase our capacity and keep pace with the environment.


RP: How did your approach to developing capabilities change over time?

BB: At the beginning of the journey, we relied a lot on outside expertise (the Lean Enterprise Institute was among those who helped us). It was a good first step to get exposure to the ideas and principles, but we realized it wasn’t sustainable. So, we decided to look around the lean community in Grand Rapids and found that our local college offered a nine-month lean certification program. It was harder than my Master’s degree, I have to say! That’s when we started to grow our own people, and now we have seven lean champions within the city. Grand Rapids is a unique environment, where firefighters teach lean to city employees (I, for one, am teaching A3 thinking) and where the transformation is pretty much self-sustaining.


RP: What can you tell me about leadership in the Department?

BB: In the past, a lot of the support to the transformation came from middle management rather than from the top. Around a year and a half ago, a new Chief came in and he is really getting involved directly. People understand that if this is important to him, it should be important to them as well. That’s when the tide turned for us, which goes to show how important it is to have leadership involvement.


RP: How did your process change?

BB: We have implemented several different processes. From a tool perspective, we ran 5S projects around the stations and applied value stream mapping for a lot of our administrative processes. But we were still disconnected with our men and women on the street. So, a few years ago, we started a daily huddle via Skype that gives all of our 11 stations 10 to 15 minutes with the Fire Chief.

Each individual work area has its own stand-up meeting as well. There are three important questions that we ask every day: What did you learn yesterday? What are you doing today? Do you need any help? As firefighters, we don’t ask for help and we are used to being the ones people call to solve problems, so we have had to learn to be very explicit in asking these questions. Coupled with the Chief being more and more visible, this has given us more than all the monetary savings combined.

I remember an anecdote that shows how much things have changed. A couple of years into the journey, as we were launching our system for managing for daily improvement with our huddle boards, I remember one of our colleagues (a fire engine driver) walking into the station and saying, “Boy, if I just had one hand grenade I could take care of this place.” He was standing just outside the office I shared with my then partner. He looked inside and said, “I am talking about you two.” Fast-forward a few years later, and this is the same person who asked for a white board to go up in the apparatus bay, so that he can better keep track of his fire engine, what he needs, and transfer that information to people in the other shifts. I have at least 20-30 stories of big detractors turning into ambassadors for lean. But that didn’t happen until we started to fix their problems – not ours.


RP: How does information and knowledge travel across stations?

BB: A lot of it happens organically, even though we have 11 stations and three shifts (which really means 33 different work crews, plus 15 rigs out on the streets). When crews travel around and see something working in another station, they want it – no matter what management says.


RP: From a practical standpoint, how has your ability to fight fires improved over time? 

BB: We are one of 239 accredited fire agencies in the world through the Center for Public Safety Excellence, and lean helped us to accomplish that. One of the major things we do (which happens in manufacturing all the time) is looking at critical tasking and takt time. It’s important for us to understand how quickly we need to perform certain tasks to meet customer demand. Through a lot of system mapping and critical task analysis, we now know that we can save 96% to 97% of a property if we can deploy seven rigs with 19 personnel to the fire in less than ten-and-a-half minutes 90% of the time. All this has been tested and validated over thousands of runs. Before accreditation and lean, we never would have thought to break the process down like that. The bell would go off and we’d run to the engine, drive to the fire and work hard to mitigate it. We would still do a great job, but now we have data and we can see the waste and opportunities for improvement in the process.


RP: How do you define success?

BB: In the past, success was very outcome- and metric-oriented, almost to the point that the focus was on how much money we were saving. Now I view success as people asking me to help them. Giving people the tools, coaching them and seeing their smile afterwards is what success looks like to me, and it’s a great motivator.


RP: Is it beneficial for the Fire Department to be part of a wider environment that uses lean?

BB: It is hugely beneficial! Within the city, lean practitioners have access to any department. We can call people up at any time and go see. Every few weeks, we have a different group of people coming to our gemba. Lean is very widespread in Grand Rapids, even outside city government: it’s not uncommon for me to walk down to the hospital once a month to see some lean friends over there, or swing by a manufacturing plant. It is fantastic, and we are very fortunate to have so many lean practitioners in West Michigan.


RP: Can you share some figures with us that show the impact of the lean transformation on the city’s finances?

BB: When we first got into lean, the city was running on a deficit of tens of millions of dollars. Thanks to the diligence of our Chief Financial Officer and to lean thinking, we have not only recovered, but also built up cash reserves as a city. It was a long road to get here, but now we have a sustainable model and we are ready to weather the next economic storm. It’s a great place to be, but we are only here thanks to the hard work of our employees and the support of our citizens.

Putting the customer at the heart of public service

The Borough of Vestre Toten, “kommune” in Norwegian, is home to one of Norway’s largest industry clusters located in the town of Raufoss. Inspired by the companies in the cluster, the director of the borough, Bjørn Fauchald, initiated a lean transformation back in 2011 to tackle the out-of-control costs and deficit.

The transformation began in the elderly care centers, which were offering an increasing number of services with little extra funding. The first pilots focused on the development of the nurses’ technical skills using visual management and standardization, and they were a resounding success: the care centers were now able to deliver more and better services with the same amount of resources. Their sister organization – home services, providing elderly care for people still living at home – consisted of two departments that started their lean journey in 2012 and 2016. In 2018, they eventually merged.

Maj Britt Karlsen was asked to lead the re-organization. Having previously led a lean turnaround with good results in a different service area, she again turned to lean and started to work closely with Kari Bjørnerud, one of three internal lean coaches in the borough. During our visit to their offices with a team of students from Los Norges “Learning Organization” training program, we were able to closely observe their Obeya support systems and the team’s visual management boards, interview nurses and other healthcare workers, and deep dive into the learning culture they are trying to develop. As with the elderly care centers, more responsibilities and new tasks – which of course require new skills – have been transferred from the hospitals to the home care department.


VISITING THE OBEYA

As part of our gemba visit, we also had to chance to discuss the transformation in detail with Maj Britt and Kari. One of the first things we noticed was how clear their hoshin was, “leva lenge hjemme” – which translates into “live long at home”. For the kommune, such an outcome should mean happier citizens and cheaper service (a person that stays at home one year longer saves the borough about NOK 600,000 per year – around €60,000). Regardless of what cost reductions might be achieved, however, it was clear that the lean principle of “customer first” was very much the focus of the department. Even though their 7.5-hour shifts are packed with work, the teams still take the time to deliver high-quality services to the elders living at home. In the event of an abnormality, deviation, issues or at worst accidents, the problem is quickly posted to the visual management board and discussed the following morning. If necessary, appropriate countermeasures are introduced and the learning is shared with colleagues.

The home nurses, divided in groups of 25, work closely together in shift divided into 5-6 people, and of course start their day with a daily huddle around their visual board. Every morning, they meet with their teams to inform, organize, coordinate and discuss the work to be carried out that particular day. As mentioned, the daily huddle also gives them an opportunity to raise issues and highlight deviations that have occurred the previous day. This allows the teams to follow up with both customers (patients) and support systems, share vital information and discuss and coordinate on specific patient needs (for example when, for whatever reason, someone needs special attention in the form of medication, a doctor’s visit or just a bit of social interaction).

Lean has also helped with standardizing work procedures with a focus on quality and predictability for the patients. For example, an issue was discovered with variation in how wound care was carried out. There was no agreed upon standard, with different practices and ways to complete the work leading to different outcomes. As a countermeasure to this problem, the teams turned to classic job breakdown analysis and held a discussion on how wound care should be provided to ensure the possible results every time. Supported by the specialist nurse in the unit, the teams developed a standardized procedure for wound care resulting in less issues and better care for the patients. In some cases, hospitalization was avoided.


A DAY IN THE LIFE OF WORKERS

To give you a better idea of how Lean Thinking is applied at the borough’s home care service, we’ll look into what happens from the beginning of the process. When a decision is made to deliver a certain type of care to a person at home, the first thing the home care team does is to validate that decision. Is this the right type of care? Should there be more or less care or should there be a different type of care altogether? In true lean fashion, this first evaluation is carried out at home with the care receiver – right at the gemba. Once they are satisfied with the decision, the team involves the patient in the planning process and in setting targets for the outcome of the care. The standardized processes allow for flexibility and individual adjustments to ensure that each patient’s unique situation is taken into account.

Another example of this patient-centric approach is the way in which the teams systematically work with patients in need of rehabilitation after operations or accidents – what they call “ordinary day rehabilitation”, meaning going back to normal. In these instances, they use the team boards to follow the progress of each patient individually. They track every-day things like getting up from a chair and going to the toilet on their own, getting the mail, cooking or cleaning. By following each patient closely – they even measure the speed of wound healing with data (mm/cm) and pictures – the teams can quickly make adjustments if progress is not satisfactory and reflect on the reasons why it is not as expected. This in turn allows them to adjust their approach for future cases. If someone experiences a breakthrough with a patient (for example, when a patient prefers to pee in a basin rather than going to the bathroom but a nurse manages to motivate her to use the toilet instead), this is discussed and analyzed among staff members to better understand what happened, why it happened and how the right conditions can be created that will lead to more breakthrough moments.


TO CONCLUDE

Lean Thinking has made a lasting impact in the home services in Vestre Toten: the teams have a better structure to support their work, patients see fewer nurses than before, and the borough has learned that people can live longer at home when the emphasis is on their needs rather than on those of the borough itself. There is no doubt that the biggest impact has come from the development of people. Since the home services started working with lean, the teams’ skills set has become much stronger, which has led to better quality services. Additionally, the job of home nurses has become more interesting as they can now carry out procedures at home that were previously considered possible only in hospital.

Lean starts with the customer, and in public services the customer is the one receiving the service. Once we start to put patient care at the heart of our work, we begin to generate benefits for all parties involved. Lean tools are there to teach us how to make the work easier for our front-line people so they can easily do what they do best – create value for patients.

And indeed, in Vestre Toten, the sum of the improvements and changes made also had a remarkable side effect: people in the final stages of their lives are now allowed to stay at home until the end, with good care and support. Just a few years ago, when the focus was on getting people into elderly care centers, this was considered utopian. Then again, lean has been known to prove the impossible possible.

A sense of heritage in an uncertain world

In a market where products become obsolete very fast, this Toyota supplier has learned the importance of staying true to its heritage and developing know-how and people’s capabilities.

Kato-san is the president of Avex in Japan and is very conscious of the heritage his father and grandfather bequeathed to him: “I would summarize it as know-how (grinding and machining small parts with high accuracy), the art of craftmanship (monozukuri), and the absolute need to develop people (hitozukuri) to ensure the company will last 100 years and more.”

Kato-san had to learn his job from senior workers, as his father died when he was still a student. Yet, the heritage has held strong for 70 years and three generations. You can see traces of it everywhere in Avex. Take craftmanship as an example: Avex prides itself of having an in-house approach to feeding machines, maintenance and building IoT. The daily cleaning of the machines is done with both know-how and care.

Today, I am visiting Avex’s Tado plant, which manufactures auto transmission valves and is a tier-2 supplier of Toyota and of other carmakers.

Life for Avex hasn’t been a bed of roses. “In fact, the work we have now will someday disappear, as the car industry moves towards hybrids and electric vehicles,” says Kato-San. The company knows this and is prepared for it, because it happened before: Avex actually started making with parts for sewing machines, until the market shrank and production moved overseas; then they turned to small parts for 8mm projectors, but those too disappeared when video came; then they manufactured brake parts, but the industry switched to resin.

This is why, instead of focusing too heavily on the products (which keep changing), the company concentrates on the technology and know-how so they can be used in different markets. They are already testing out new opportunities: they have started to produce parts for the Mirai (hydrogen fuels), while also looking at agriculture and co-generation (converting gas into electricity). Kato-san smiles and tells me: “Competition in Japan is fierce. Younger generations are also losing interest for cars. And, by the way, our 40-cent auto transmission valve is installed in cars that range in price from $15,000 to $200,000.”

The resilience of Avex is unbelievable. The 2008 crisis had a big impact on their sales but they recovered quickly and without any lay-offs. No wonder Kato-San keeps an eye on all external threats. “I believe that my role, as President, is to split my time between customers, both to understand their needs and to seek opportunities for diversification, and the gemba. My job is to go and see.”

By the way, external threats are regularly shared with employees: twice a year, all plant members gather to learn about the company’s situation and, every month, the President explains the results and the long-term vision in each plant.

The management approach at AvexAs Kato-san tells me this, I am impressed: to me, looking at threats without blinking and preparing for them, and relying on a strong heritage and common values to steer the company towards a bright future is an art. Avex shows the way and gives meaning to what each Avex employee does every day.

“We constantly strive to produce a good and reliable product and we try hard to be a company that serves society, through job creation and taxes,” Kato-san says. He is thinking of Toyota’s famous equation of Profit = price – cost and confirms to me that his role is to make Avex competitive in Japan. He refuses to offshore production or part of it to a lower-cost country to stay in the market.

Avex employs 400 people today (it was 100 in 2008), with two plants and a Techno Centre (created in 2012 to improve the cutting/grinding process for hard materials with low tolerance – linear solenoids, + or – 2 microns). In addition to longer term threats, the immediate challenge for the company is simple to understand: the automotive business requires 1 to 2% productivity improvement from suppliers every year. Kato-san has therefore summarized it in a simple internal challenge, whereby everything is to be halved: the tolerances on the products to improve accuracy, the costs, and the lead-time. “We have to kaizen all the time. Everyone must have the sense of kaizen, the sense of urgency, of challenge.”

And this confirms, as we start our gemba walk, that the most critical topic for the company is the development of people (after all, machines don’t kaizen and don’t perceive urgency, threats and competition).


“AS THE PEOPLE GROW, SO DOES THE COMPANY”

As a supplier eager to satisfy its clients, Avex listened carefully over the years to the values and concepts Toyota promoted up and down its supply chain. “Respect for people” particularly resonated with the leaders of the three generations of Avex.

The Tado plant is not close to any major urban area (although, arguably, in Japan a major urban area is never too far away) and recruits people who wish to stay in the area, as their elders did before them. As the Japanese workforce decreases, competition gets fiercer among would-be employers, which makes it very important for them to offer an attractive workplace. So, how to find a balance between ambitious work challenges (the sense of urgency Kate-san was talking about) and a rich life with their family? What needs to be done so that employees find joy in their work?

The Kaizen activities we see on the gemba are an answer to both. As Avex employees improve their work environment and reduce defects, they both keep Avex competitive and experience autonomy and pride.

Trolleys are designed by the technicians themselves and adapted to their needs and height. Parts coming out of a machine fall softly on a turning table and this is the result of a kaizen, to prevents parts from falling on top of each other and thus generating scratches.

As we move over, we see many such examples of feeding or downloading equipment that are a clear Jidoka concept, where the machine should have full autonomy and not require a human resource to stay over, watch it, feed it and collect the parts. This is also a result of the “respect for people” ethos the company has, by the way, and the importance of giving human beings value-added work to do, if only to retain them and make them happy to come to work.

Forty collecting machines have been installed to collect the parts form the grinding machines, thus freeing up the technicians and allowing them to perform other tasks, such as maintenance, or designing and building other feeding or collecting machines in the Jidoka promotion section.

At Avex, kaizen is managed through Quality Control Circles (each with 4 or 5 team members). This is demanding because each has to perform his or her work and attend the QC circle, but this is the point – to make the daily work easier. As we now know, kaizen and QC Circles aren’t only meant to solve problems (0 defect) and improve work (0 muda). They also contribute to the development of skills in terms of presentation, communication, collaboration, and leadership. As we stand close to the QC circle board on the floor of the 90 grinding machines, we can see that each QC Circle member actually self-assesses against the above skills to see whether they are making progress. One of the underlying objectives of kaizen activities is to promote teamwork!

Kato-san is clear on this: “I often go to the gemba to see the kaizen, a simple form of recognition for the work done. And if the kaizen is successful, I praise the people responsible for the result.” In addition, formal kaizen presentations are held every year, which top management attends to advise and praise. Avex has designed a one-page sheet to present the kaizen that details the “why”, the current state, the factor analysis, investigation and measures, a check of course, a new or changed standard and reflection on what they learned and what the future steps could be. The first objective of those presentations is motivation, of course, as workers get to discuss with management, and incentives are granted to the teams (never to individuals). But also yokoten (rolling out the results of the kaizen to other departments), as everyone can learn from the experience of others. By the way, kaizen presentations are not limited to workers, but also supervisors and Sales and Administration staff.

The average age at Avex is 30 and the 6% turnover ratio is in part represented by those young people leaving because they don’t see a future. “HR development remains one of the key challenges in our hoshin,” sighs Kato-san. Consequently, in addition to kaizen, the company is developing a career plan for each team member.

Early obsolescence of products forces Avex to focus on technical know-how


GRINDING AND MACHINING WITH TPS

Talking about challenges and difficulties is one thing, but we should remember that Avex knows its TPS inside out. No bad parts are passed on to the customer, with the customer ppm at 1 to 2 defects per 10 million parts delivered! As the internal defect rate can be higher, a final inspection of parts is done systematically. As our gemba walks continues, we see that the collecting of parts is now being done by in-house robots. When we reach the final inspection area, we see robots in use there, too: they can inspect more items than the human eye. True to the craftmanship heritage, Avex sent operators to university to learn how to design and maintain machines, and they are progressively adding an IoT know-how to their skills.

They work with their Toyota Tier-1 customers in a pure Just-in-Time way. “Just-In-Time,” says Kato-san, “is a system to develop human skills and to connect across the supply chain.”  The order is received the day before, kanbans are printed and the entire production is pulled (Avex produces 84 million parts a year). Do not ask Avex what happens if they are late to complete one of the two trucks they have scheduled per day. They are never late. Their buffer inventory in finished goods is just one day and this means that, if a machine breaks, they need to have enough skills to repair the machine within 24 hours.

Again, true to the craftmanship heritage, Total Production Maintenance is a well-honed process in Avex, which means they can buy second-hand machines and reuse them, thus achieving an 80 % capex reduction versus a new machine. Every day, operators spend 10 minutes cleaning their machines. By the way, operators in Avex are called technicians and there is no dedicated maintenance team. Technicians do far more than operating machines. Parts are 100% guaranteed: operators therefore need to understand their machine very well. “My machine is my child” is their motto. As it often happens in Japan, Senior Operators educate Junior ones. Two days are dedicated to preventive maintenance every year, with all the technicians involved.

Just imagine the second floor of Tado, which houses 90 grinding machines. The company is gradually moving from one operator per machine to one for up to five machines, with a target to get to one for ten machines. With the idea of “respect for people” and the “no lay-offs” policy, the role of the human is more and more to design, maintain, kaizen machines – rather than to produce parts. Today, 70% of the company’s employees work in production and 30% in non-production functions (from management to logistics and maintenance), whereas in the future this will probably be reversed.

As I raise the question of production flexibility, Kato-san smiles: all machines are on wheels to allow reconfiguration. The Tado plant is dedicated to the high runners and mass production, so one machine is dedicated to one product. But the Nagoya plant is designed for smaller series and does many change-overs during the day.

With external threats like the obsolescence of your products or the need to find new market opportunities and new customers, those who can offer the best know-how and the flexibility to start small series of parts on demand will survive. Avex seems well prepared for both.



THE AUTHOR

Catherine Chabiron photograph

Catherine Chabiron is a lean coach and member of Institut Lean France.

Lean caters for our product development needs

NOTES FROM THE GEMBA – This French company has completely transformed its approach to designing and introducing new products to market by embracing lean product development ideas.

You will probably never have heard of Friginox, nor about the group it belongs to, ALI. And unless you were born in the area, you probably never visited Villevallier, the small town nestled up against the Yonne river where Friginox has a 10,000-square-meter production site. Yet, this company – which supplies equipment to restaurants and hotels – recently won a Sirha Innovation Award for its latest design: a catering cabinet that can maintain food at constant temperature during transport and service.

It may not seem like much to those not working in the industry, but the great innovation of this cabinet on wheels is that it is very flexible and can handle both hot dishes (up to 80°C) and cold ones (as low as 1°C). Previously, customers who needed to store both hot and cold dishes would have to buy two cabinets.

I never pass on an opportunity to see a real example of improved flexibility, and this is the reason why I am now meeting R&D Manager Rafael Venancio in Villevallier. I am curious to learn whether the design of the new cabinet was influenced by lean engineering. I am also eager to find out about Rafael’s participation in the Lean Engineering Academy, a France-based group of lean engineers engaging in product design and development. (This community, created, supported and coached by Michael Ballé and Cecile Roche, was started in 2010 with the aim to learn and run experiments on how lean can boost engineering and bring more value to customers. Members host the group in turns, spending the day on the gemba and experimenting as a team.)


DESIGN FLEXIBILITY AND CHALLENGE WITH TAKT

Upon greeting me, Rafael explains that Friginox is a leader in the French market of large equipment for catering. “We wanted to try our luck with smaller equipment, with one concept in mind: promoting flexibility, as this was a request from our major customers, while keeping things simple,” he tells me.

Friginox had already tested the concept on a small table container that provides both quick cooling and hot holding functions. Unfortunately, the model didn’t sell too well, because this kind of small table equipment is not Friginox’s usual line of business and the company was priced out of the market. What they earned, however, was the experience and the confidence they needed to get started with a new multi-function product range.

“We have always used professional exhibitions to give us the takt time to release new, ready-to-sell products. But in May 2017, we changed our approach and decided to introduce the prototype of a new range of multi-function products and to stick to the deadline of October 2017, when the next Exhibition would take place,” Rafael says, as we put on our safety shoes and move over to the shop floor.

Eighty people work at Friginox, and only four of them in the R&D department. The engineering team can readily test our designs and prototypes or confirm assembly issues together with the production team.

There are three workshops in the production area:

  • One receives the sheets of stainless steel, punches them and folds them into forms (sides, partitions, boxes, doors, tanks, etc): machines here are rather multi-purpose and work on production orders.
  • The second one injects a polyurethane foam in the equipment housing to ensure insulation: while certain large flat panels are handled by a dedicated machine, more sophisticated shapes are injected on a make-to-order basis, in machines designed for that specific shape.
  • The last workshop is where (manual) assembly takes place: here, doors, locks, electrical and cooling elements, cabling and control commands are made to order.

Rafael says: “The big change we brought into this last workshop is the picking that is prepared ahead of each assembly and dispatched to each of the workstations. This way, the operator will have everything at hand as he works.” Although it is not the purpose of my visit, it’s nice to hear Rafael confirm that the new approach largely reduced work-in-progress on the shop floor.


USING SET-BASED CONCURRENT ENGINEERING

Foam injection at FriginoxWhat Rafael wants me to see is the second workshop, where foam is injected: “One of the key lean engineering concepts we used is the set-based approach. When we started designing our new product in May 2017, we decided to study different options to perform the foam injection. Should we do it panel by panel? Should we do it as one complete shape? In this case, would we have to design a dedicated injection press? These were some of the questions we were trying to answer.”

As our investigation continued, it looked like each option would impact the design of the product itself. Each had its advantages and downsides. The team tried to keep their options open as late as they could, but when the October deadline for the functional prototype got close, they decided to go for the safest option – the panel-by-panel injection – although the small size of the cabinets made the handling and finishing harder in the big press.

The concurrent design of the industrial tool and the product itself is not new to Rafael, as the choice of the foam injection tool severely impacts the product options. Keeping options open as late as possible, however, was. They used the same approach for a number of key changes they wanted to bring to the new cabinets, beyond the hot-and-cold multi-function:

  • Should they stick to their standard door lock or design a “signature” lock? One of their lock suppliers took the challenge but then failed to design something reliable ahead of the Exhibition where the prototype would be launched. (By the way, sticking to known standards is also very lean.)
  • Given the short delay, should they target a product range of models of different sizes or just present one model at the Exhibition? They wisely decided in the end to present only one model, but they see their investigation of a product range as a major step forward. Components, such as the thermoblock (the hot holding device), have already been designed to fit any other model of the future range. If they had not designed with a range of products in mind, the selected options may not have suited the future models.
  • Should they have the thermoblock at the back or below the cabinet? Should the loading of the catering bins be done through the width of the trolley or the depth? Would their standard magnetic seal fit the hot-and-cold multi-function or would they need to find a new seal for the door?

Developing a product using set-based concurrent engineeringRafael confirms: “This really was a major change in our design method, both thanks to the takt time we gave ourselves – we wanted to be ready for the Exhibition, no matter what – and to the set-based approach. In hindsight, I can tell that we tried to embrace too many changes at once and this is a lesson learned for the future. Lean engineering is a conscious choice between what will change and what will not in the new model, which known standards should be used and which knowledge gaps should be addressed. That being said, until then, we had never been able to study and finalize such a high number of changes in the course of just five months. Whatever part was to be incorporated in the prototype, we knew we would be able to produce it in serial life. In fact, what we presented at the Exhibition in October 2017 was closer to a pre-series than to a mock-up.”All the options were studied and the list narrowed down – most of it ahead of the Exhibition, where Friginox presented the first functional prototype of the new product.

The use of set-based concurrent engineering had two main implications for Friginox. First of all, the supply of components was launched much later than usual, as a result of keeping options open. However, a thorough monitoring of orders and a good partnership with suppliers enabled the company to be ready and on time. Secondly, when you work to takt time and want to test options, you can’t wait for problems to appear: you have to go and actively look for them. (You end up thinking carefully about what could possibly go wrong – “good products come for good thinking”, says Toyota.)


LEARNING WHAT THE CUSTOMERS VALUE

For Friginox, the October 2017 Exhibition was the first time showing up with a prototype. Up until then, they had considered such occasions as an opportunity to sell and pamper customers, rather than gauge people’s potential interest in new products. This time, they had face-to-face discussions with potential buyers about the prototype, which helped them refine the product based on what customers truly value.

Rafael takes me to the R&D office, where a board is dedicated to both the problems the department has stumbled upon and those it had anticipated. There is nothing fancy about it, but it represents a thorough attempt to list the issues (yellow post-its) for the three major topics the company is concerned about: safety, functionalities and mechanics. The visual board displays all kind of concerns with the prototype – assembly, usage, reliability. It is quite empty now, but over the course of 2018, as Friginox refined the product and moved towards serial life, each yellow post-it note in turn carried pink, blue or green notes. Pink (they could not find red ones) represents problems the department doesn’t know how to solve; blue stands for sticky issues for which the department is trying something out; green refers to situations the department knows what to do about, but that were delayed due to other activities.

Lean problem solving at Friginox

One way to anticipate problems and possibly find solutions is to tear down competitors’ products. The R&D team bought two such products and thoroughly studied their strengths and weaknesses. By doing this, they discovered Friginox was behind their competitors in the steam moistening for the heating function. They worked hard to close the gap, to the point they now believe they have overtaken the competition (they are still closely monitoring their solution, though).

The analysis of the competitors’ products also revealed there were a lot of opportunities for Friginox to do better than its competitors when it came to the handles used to move the cabinet around and the securing of external accessories (the water collection tank of one of the competitors’ products, even though it was beautifully designed, regularly fell off during transport or even while standing still).

Friginox had performed competitive tear-downs before, but the Lean Engineering Academy clearly pushed them to perform it thoroughly, to challenge options or try out new ideas. “Discussing the prototype with customers and tearing down competitors’ products helped us understand where we could increase the value for our customers,” Rafael confirms.

In fact, as we discuss, I remember the “doctrine” the Chief Engineer of the first Toyota Corolla established on delivering a successful model. He called it an “80-point + Alpha approach”: 80 basic elements that can’t be missed and a plus, an Alpha, that would delight the customer. “Aren’t those yellow post-its on the board the 80 points that can’t be missed, Rafael?” I ask. As he nods, I continue: “What would your Alpha be, then?”

Rafael smiles, and explains: “The obvious Alpha is the multi-functionality, the possibility to use the cabinet both for cooling and maintain hot dishes at temperature. This is really new in the market. But we also tried to keep the control command very simple: all you need to switch from one function to the other is the push of a button, whereas our competitors require the user to switch on, then select function, then validate, and so on. That’s certainly the first competitive advantage.”

Lean product development at French manufacturer Friginox

But there are more pain points in the usage of the cabinet that the new design takes care of:

  • The water that accumulates inside the trolley as a result of condensation on the door seal used to trickle down and eventually make its way to the carpet floor of VIP restaurants. The team worked on it and came up with a way to collect the water at the bottom of the door. Competitive advantage number 2.
  • Cabinets like this one are typically equipped with racks, which must be removed in order to be properly cleaned. The slides on which the catering bins rest have been completely re-designed both to avoid deformation under heat or cold (which caused the racks to become stuck) and to offer an easy cleaning (stamped walls rather than metallic slides). Here’s the third competitive advantage Friginox’s new product enjoys.

Rafael comments: “This is really something we improved thanks to the Lean Engineering Academy. Before, we would have considered an 80% OK score on usage issues good enough, as our competitors do.” But Friginox now targets 100%, and the alpha for each new major release. The big change here is that new products are now designed to make life easier for the end user, not just to sell the product.

Lean theory makes sense, but it is not so easy to stay true to it. The real challenge is keeping up the “good thinking” every day, with daily delivery targets overwhelming you. Indeed, Rafael confirms that he and his team have learned to sit down and think every time “something weird is going on”. They might not yet have reached the stage where they love problems, but they are at least looking for them actively instead of running away from them!

The company launched production and sales of the new cabinet in mid-2018 and decided to put forward the product for the 2019 SIRHA Exhibition innovation contest. In December last year, they were asked to present the product in front of a jury of 10 experts. The next day (during a Lean Engineering Academy session), they found out they had won the award.

The cabinet product is now on sale, but the tests haven’t stopped. “Tests, whether on ageing or repetitive usage have always taught us plenty, including things we were not looking for,” Rafael says. One such test aimed to see what would happen if the cabinet operator used tap water rather than soft water for the steam moistener. Sure, with tap water the cabinet doesn’t work, but the team has learned the effects of this usage and can now use this knowledge to diagnose issues faster during after-sale servicing. In the process, they also detected some flaws in the sealing that were then corrected.


THE NEXT EXPERIMENTS

So, what will the team try out next?

Rafael shows me a recently-completed concept paper for a new design they are working on. It includes a classical “what, for whom, when, at which target cost”, but also a list of critical performances the product can’t fail, what it will compete against, what will not change from previous models, and what knowledge gaps need to be filled.

“I had not used a concept paper for previous projects, including the hot-and-cold cabinet, but it turns out it’s an excellent tool to clarify what we want to do. Before putting the concept paper together, I thought we all agreed on the target of the current design, but this turned to be much less clear than we thought,” Rafael admits.

Another thing he plans to do is to visit customers in their own facilities to see and discuss usage problems. He plans to change the way expectations are captured, by introducing a discussion on trade-offs. For example, customers prefer moving food around in plastic crates (easier to handle than grids), but the time to cool or freeze the food will in that case be longer or require larger and more powerful devices. Where do they put the cursor between “time to cool or freeze” and “small-size equipment”? Based on that, a QFD matrix could be built that will compare customer expectations with the functionalities that are built into the product (a great opportunity to check what is really needed or what is not, and what is critical because it is meeting many of customer needs).

Rafael concludes: “We have learned a lot in this Lean Engineering Academy. But, as always in lean, we have to introduce one new experiment at a time if we are to truly gauge the impact of each individual action we take. If we try too many things at once, it will be hard to learn from our results.”



THE AUTHOR

Catherine Chabiron photograph

Catherine Chabiron is a lean coach and a member of Institut Lean France.

Lean delivery

NOTES FROM THE GEMBA – After re-insourcing its bike repair workshop, a distribution center of France’s La Poste has begun to recover long-lost knowledge about the work of mailmen and using it to innovate.

La Poste, France’s national postal service company, runs a sorting and distribution center in Roubaix, in the north of the country, which I am visiting with Nathalie Lagrenée, North Operations Director. Nathalie is one of the very few women lean leaders I know, and every day she lives and breathes the essence of lean thinking: learning from the gemba.

Nathalie wants me to see an interesting experiment that started in Roubaix in 2016. Laurent, manager of the center, remembers when they first started: “Our postmen heavily rely on their electric bikes to manage their deliveries. They learn to ride them, and they adjust them to their needs (height, brakes, load balancing over the various compartments) until they feel completely comfortable with them. Up until 2016, malfunctions or safety issues typically turned out to be a big nuisance, because the bike had to be sent out to an external servicing facility to be repaired and our postmen had to switch to a replacement bike they didn’t trust for an unspecified number of days.”

In fact, because the repair center is not in the same location, the bikes in need of fixing were batched to optimize the load of the transportation vehicle. The transfer would only be arranged once a minimum number of bikes was reached. Add the waiting time for repair and collection, and it is not surprising that the lead-time varied between 7 to 30 days, not to mention the complexity of having to maintain a number of replacement bikes at the center. The consequence was that safety issues and basic preventive maintenance were at times by-passed or looked over by postmen, to avoid losing their precious vehicle.

A postman's bike“In 2016, we saw a great opportunity to solve the problem,” Laurent continues. “We decided to insource the bike repairing activities and set up an internal workshop. We had a volunteer to manage it, Pascal, and this turned out to be a blessing.”

In the meantime, Nathalie, Laurent and I reach the workshop, walking past several postmen busy sorting letters and parcels by street number. The job of postmen, in France like in the rest of the world, is changing dramatically: they used to have a monopoly on mail distribution, whereas they now find themselves in a fast-changing world where the number of letters is constantly decreasing, replaced by objects, ranging from magazines to parcels, that have to be distributed. They also face a lot of competition in last-mile delivery.

Even though Roubaix is a hub for e-commerce platforms and the volume of parcels it handles is ever-increasing, the sorting workstation has not been adapted to the size of the new objects yet – a key challenge here. However, the postmen’s mail bags have been redesigned and the bikes now carry large trunks that can accommodate small parcels.


FROM LARGE TO SMALL BATCHES OF REPAIRS

Nathalie tells me: “I wanted to show you this bike workshop because we have proof that its lean turnaround is now a reality, thanks to Pascal and Laurent’s support. Bike repairs, which were once batched, are now handled in a continuous flow, pulled by Pascal. Bikes are out of service for maximum 48 hours, down from the previous 7 to 30 days, much to the postmen’s satisfaction.”

We are now entering the small bike workshop that Pascal created. He is working on a bike right now: the user of the bike had encountered a problem the day before and asked Pascal to have a look at it while she was preparing for her round. Pascal has secured it on a lift and is just finishing the 36-point check he has designed himself. “It doesn’t take long, and I had the opportunity to do it while I was fixing the bike,” he explains with a smile.

I ask him how he organizes his day and the bike repairs and he shows me what turns out to be his production plan on an Excel sheet: “First of all, I rely on the complete set of checks that each postman is expected to perform on her bike once a month. If they flag something up, I pull the bike out of service and work on it. Every two months, whether they have raised issues or not, I take each bike in for a complete check-up.” Pascal tries to level the work on bikes pulled either for repair or maintenance, but – as we witness while we talk to him – he also handles Jidoka calls whenever immediate action is required.

Thanks to an intuitive Excel file designed with help of the Controlling Department and to the visual management of stocks, Pascal can autonomously manage his inventory of parts and trigger replenishment when needed.

The postman bike repair workshop in Roubaix


BETTER, SAFER WORKING CONDITIONS

Postmen have a demanding job few of us know about: not only do they get up early in the morning to perform the last manual sorting of mail ahead of distribution and ride their bikes around our towns and cities in any kind of traffic and weather condition, but they are also expected to sell. The drop in the volume of traditional mail led La Poste to transform their large network of postmen into a door-to-door salesforce that distributes, and sometimes even promotes new services (or offers from local stores).

It is hard enough to manage all the potentially-dangerous situations inside a plant and prevent accidents, but out there in the streets and along country roads, the risk of accident is everywhere – curbs, dogs, vehicles, slippery conditions, and so on. Because the new flow-based system ensures swift repairs, postmen are now opening up about their doubts and the problems they experience on their rounds. The numbers speak for themselves: there were 198 repair orders in 2015, 214 in 2016, 350 in 2017 (as insourcing started to ramp up), and more than a 1,000 in 2018. This last figure was achieved not only as a result of additional requests, but also because the postal delivery center in nearby Bondues asked if Pascal’s workshop could repair their bikes too.

The first consequence of the re-insourcing of repairs was that the number of accidents caused by faulty bikes decreased drastically. The number of work accidents linked to bikes decreased by 90%, the number of lost workdays from 284 days in 2016 to 0 in 2017-2018.


LESS SQUARE METERS, LESS SCRAP, MORE RE-USE

The second consequence of the switch to small batches of repairs and to just-in-time is that the overall stock of bikes has been reduced by close to 10 %, as fewer replacement bikes are needed.

Fewer bikes means less square meters used for bike storage, space that can now be used for something that creates more value – like dojos, as I will show you in a moment. Marine, the lean expert on site, explains that the bike workshop initially measured 50 square meters. It later grew to around 100 square meters before being shrunk down to 30. Pascal adapted to the layout, but says he misses the area that was once separated from the rest of the workshop by a door, which meant he could walk out of the workshop without necessarily having to store all tools and parts. Laurent points out with a smile: “On the other hand, it forces you to keep it tidy and organized at all times.” Pascal nods and adds: “Sure, and because the workshop is now right next to the postmen’s sorting work stations, we have also seen an improvement in the flow of information.” Indeed, there is a board that postmen are using to flag up malfunctions.

lean visual management at La Poste

But Pascal went one step further with the idea of sparing materials and resources: as he worked on bike overhauls, he started a recovery process for parts that would have otherwise gone to straight to the bin. One such example is bike bags: he recovers those that are in good shape (but being replaced by larger trunks designed to carry small parcels) and fits them on the bikes that don’t need trunks or need both trunks and bags.

He also breaks apart scrap bikes to recover spare parts. “Anything that is related to safety, such as brakes or tyres, we buy,” Pascal explains, “because we can’t risk it there.” His attitude towards the job reminded me of a DIY enthusiast: he tears down, studies, learns, sets apart, re-uses, and so on. He recently placed anti-fatigue mats on the floor that were being discarded from the postmen’s sorting stations and started to use them for his own place of work.

Small gains are piling up at Roubaix, enabling the center to re-invest in smaller tools, like a grinder, to manufacture small parts and conduct experiments.


PILING UP KNOWLEDGE AND SHARING IT

Fixing bikes and innovating the postmen's workThis bike repair re-insourcing is decidedly a horn of plenty. As the conversation with Pascal continues, it becomes evident that, thanks to him, La Poste is recovering lost know-how on one of its core tools, the postman bike. When the bikes were being repaired outside, the repair job would be strictly focused on the requests listed in the order. If anything was learned during the repair, it was lost to La Poste. If anyone had an idea for something that could be useful but didn’t appear on a request, it simply wouldn’t be done – as it could not be charged for.

Pascal, on the other hand, sees each repair as an opportunity to learn. He shows us the rim tapes equipping bikes recently purchased. He finds them too large, too rigid, the result being that the tyre does not correctly adhere to the wheel. This way there is an increased risk of flat tyres or punctures and, true to himself, Pascal is replacing those rim tapes with old ones he has recovered from scrapped bikes.

He is, he adds, in constant contact with the DT, the Technical Department of La Poste, which has confirmed his observations on the rim tapes and requested the supplier of bikes revert to less rigid outfits.

Another kaizen led by Pascal was done at a time when new batteries could no longer be purchased for the bikes electric assistance, as a result of a rare earths supply shortage from China. Insufficient autonomy of existing batteries had sometimes led postmen to finish the round with the sole energy of their muscles or to take two batteries with them on the round, just in case. Pascal took the time to learn what the best conditions were for batteries to be correctly and fully recharged at night and he redesigned the entire storage area (flat storage, not askew, cables not at risk of being unplugged in the process of retrieving a nearby battery, etc).

Storing batteries, a before and after


FROM KAIZEN TO INNOVATION

Laurent mentions the sudden breakage they had on a wheel fork: the wheel fork, not unlike the training wheels on either side of a kid’s bike, prevents the bike from falling over when riding at reduced speed or stopping to deliver the mail or a parcel. The fork is welded to the bike frame and the breakage suddenly occurred at the welding points, on both sides of the fork. Pascal spent some time studying the issue, compared different designs of forks and spotted the fault: the tube on which the fork is welded overlooks the wheel. Unless that tube is sealed, water will be sent up that tube, creating corrosion points from the inside right by the welding points, which will, at some point, break off under the weight of the mail.

Pascal has thus found many kaizen opportunities that led to an enhanced design of the bikes. It would be too long to enumerate here everything that Pascal or Laurent or Nathalie or Marine showed me, but one of Pascal’s latest findings is related to the parcel trunk at the back of the bike. Designed to contain small parcels (large ones are delivered by car), the trunk needs to be locked to prevent potential thefts while the postman is inside a building or a house. The lock opens up with a plastic key (on the left here-below), but those often break. Using the recently acquired grinder, Pascal prototyped a new key and is currently in discussion with the Technical Department to either have the supplier change the design or to make a set of metal spare keys that could be used if the original one breaks. Note that a trunk without a key is useless and that, in the absence of a spare key, the only alternative is to discard it.

The result of this insourced bike repair is so impressive that nearby centres are now trusting Pascal and his workshop with the repairs of their own bikes. Sure enough, Pascal’s workload has doubled in recent months. His dream, he concludes as we move along, is to spend his remaining years at La Poste developing workshops like his own and helping them to flourish.

Lean innovation at La Poste in France


DOJOS FLOWERING UP

I have mentioned earlier that the square meters that were saved up in the workshop allowed for more added-value activities, like dojos, to take place.

“I very much believe in learning and developing capabilities, and you have seen how successful this approach was in our bike repairs process,” Nathalie says. “The amount of things a postman has to remember to do every day is staggering. No wonder newcomers are overwhelmed by the difficulty of the job. So, when Marine told me she was working on a dojo dedicated to making a postman’s day a success, I knew I had to encourage her and support her initiative.”

We decide to go and visit the dojos, accompanied by Marine, Roubaix’s lean expert. She explains that she designed the dojo together with a small team of newly-hired postmen. They could have relied on an induction kit designed by Corporate, but they wanted to use their own words and pictures instead. “We started with a layout of our mail sorting area,” she explains, “and used it to cover all the different steps the daily processes entail. It took some iterations (and we still see improvements that could be made to it) but recent hires, upon testing the dojo, confirmed it would have saved considerable time and confusion in their early days.” The dojo is not designed to get into details, but to offer an overview of the day ahead and re-enforce the postmen’s mission, giving them a sense of purpose.

Dojos at La Poste to help mailmen in their daily workThe team also designed a pocket card to keep at hand with the most important points to remember.

I can see many other dojos around the room, but these are more specific: how to manage temporary or permanent redirection of mail (still a complex manual operation), how to handle situations such as “unknown at this address”, or how to sell La Poste service offers like “Take care of my parents” (where postmen, who go past each house every day as part of their round offer to check on elderly citizens and help them out). For this last product (for all the products they are asked to sell), rather than using the advertising flyers La Poste has designed, the teams preferred building their own standard: what does the service consist of? Who can be interested? Why? What advantages are there for the customer? What do I get if I sell one? What sentences can I use in offering this service?

And the technical dojos go through a similar standard: provide the what and the why, go through the key points, practice, use multiple choice questions or games to ascertain everything is correctly understood, check the trainee on the job.


RE-FOCUS ON CUSTOMERS

Things aren’t easy at La Poste: there is a huge daily and seasonal variability in the workload, mail-sorting operations are still organized in batches, there are improvement opportunities for ergonomics at the sorting work stations, growth opportunities are scarce, and competition is heavy. Nonetheless, Nathalie sticks to her strong belief that, if you take care of your customers and your employees, the situation will improve, and she has repeatedly demonstrated that this is the case.

As we leave the center, she tells me about the major cultural change this new focus on customer represents for La Poste. “We have to learn all the basics, but I see a lot of people willing to do so. The other day, we had a bug in our system and we discovered after the rounds that 60 parcels had to be picked up from individual mail boxes that day (this is part of a new service where you can prepare your parcel, purchase the stamp online, and have La Poste come and pick it up from you own mail box). We missed them altogether. The teams were dumbfounded. I just told them to try and recover the blunder and at least warn the customers. They rolled up their sleeves, called each of the 60 customers to tell them about the problem, went back to the rounds, managed to collect some of the parcels that same day and the rest the day after. In the end, when we got the Net Promoter Score for that period, it turned out to be 100!”

Nathalie takes her safety shoes off and puts them in the back of her car. She’s all set for tomorrow’s gemba walk.



THE AUTHOR

Catherine Chabiron photograph

Catherine Chabiron is a lean coach and member of Institut Lean France.

Retaining talent to make a difference

NOTES FROM THE GEMBA – This French company provides support to the severely disabled, and is currently using lean thinking to limit employee turnover and recruit faster.

Working in home care may be rewarding, in that it contributes to the well-being of sick or disabled people, but it is certainly stressful. This is what I quickly find out, as I walk around the small open-space office of Aloïs with the company’s CEO and founder Arnaud Barde. It is stressful because, first of all, you need to find customers, but also because you need to attract and retain employees for jobs that typically require empathy, professionalism and continuity of service.

Arnaud made the bold move towards home services a few years ago, when he left the restaurant business to start a company that would help severely disabled and elderly people in their own home, seven days a week and often 24 hours a day. The job entails human presence and assistance – for example in taking the patient for a stroll, to the movies, or listening to music, painting, or reading with them – as well as tasks like moving the patient from the bed to an armchair and to the toilet and back, cleaning, dressing, shopping, feeding, ironing and assisting nursing care.

Arnaud founded Aloïs at the end of 2014 (he named it after Aloïs Alzheimer) and launched a lean management strategy for the company in April 2016 after attending a Lean Summit in France. Four years after the founding, Aloïs employs 130 people (of which 80 FTEs) and takes care of 50 customers, most of whom require a minimum of five hours of home assistance each week.

As I walk through the doors on a recent visit, Arnaud greets me with a smile and, to break the ice, I cheerfully ask, “How is the business doing?” Arnaud‘s answer is a bit hesitant. I immediately assume his problem is with customers or sales, and ask him if that is indeed the case. “Oh no,” he says. “That is not our problem. We retain all our customers, and at the moment we have a growth rate of about 20%. Our turnover has grown eightfold since our first full year of operation.”

“What is your problem, then?” I ask, slightly surprised by what I had just heard.

“Our problem this year is that we have to can’t keep up with the requests for help we receive, because we can’t recruit fast enough.”

The hourly price of home care is set by the Departmental Council Healthcare Board (the payer), not by Aloïs. Needless to say, selling a service to disabled people, who have no income other than government support, at a premium is not an option. This constraint, combined with the fact that the job typically doesn’t require a high level of training and education, results in employees being paid rather low wages. At the same time, this is a demanding job. Add to the mix a recent upturn in employment offer in France and the traditionally high turnover of employees in home care services, and you will easily see why Aloïs is struggling: despite some improvement over time, employees leave regularly and recruitment remains difficult. This, in turn, puts a lot of pressure on remaining staff.

The story of these improvements and difficulties can be read on a very extensive system of visual management boards that the company deploys. Key indicators show customer satisfaction rates, the number of new patients joining, the number of those Aloïs no longer serves (most unfortunately due to their passing), continuity of service (the worst month this year in Aloïs was 99,6%), customer claims, employee turnover and recruitments, hours “sold”, and so on. And that’s before we even get to problem solving and task tracking sheets.

The company tracks customer KPIs

The company’s management team is small, and often out in the field supporting employees in their tasks or training them. However, they try to collaborate by participating in a weekly discussion on problems and a “daily checkpoint”, together with Arnaud.

It is great to see the strategic double challenge defined by Arnaud at the beginning of my visit underlying all the data displayed on the walls, which is centered around two main questions:

  • How do we attract and retain customers?
  • How do we attract and retain employees, so that they can better serve our customers?

OUT TO MEET THE CUSTOMERS

Word of mouth plays a huge role in this business, and providing a good service and finding a clear differentiator can quickly attract new patients. Arnaud has a very clear idea of what sets Aloïs apart from the 220 or so competitors operating in the area: even though the company started with the idea of providing home care to seniors, it quickly veered towards severely disabled individuals needing high levels of care. According to Arnaud, this is a niche in which Aloïs can offer top-level service that other, more generalist competitors can’t provide. Aloïs also offers a nursing service for tracheotomized patients, for which 50 members of staff have been trained. (A capability rarely available to their competitors, certainly in such numbers.)

But there is more. Taking inspiration from the lean idea of going to see, Arnaud has begun to schedule two-hour gemba sessions with every single Aloïs patient in their own home once a quarter. Upon mentioning this, Arnaud pulls a bundle of one-sheet reports from his drawer to show me how these gemba visits happen. During each visit, the patient and her family are very thoroughly listened to, both when they share positive feedback and when they raise a problem, lodge a complaint or suggest an improvement.

“Sometimes, I am also allowed to observe operations like lifting the patient from the bed or dressing them, but people are often unwilling to share this kind of intimacy with someone they don’t know well, which is understandable. When this happens, however, it is the best opportunity I get to detect the pains and constraints we create for them,” he tells me. This, at least in my experience, is unheard of in the world of home care – and probably in most businesses.

This attention to detail is further pursued with employees taking turns in caring for patients, as work standards (how to move a patient, for example) are defined, discussed, improved and logged for each patient. The idea is to offer a perfect service, approved by the patient, but also to enable an efficient induction should a new caregiver step in. Some of the work standards we check on my visit state the “why”, but Arnaud tells me they all should. He is right. In my experience, the why on work standards is very important: when I coach problem solving, I see numerous cases where the problem is actually lost know-how. Complex tasks spelled out on a work standard will progressively be bypassed because nobody remembers why you need them, and this invariably results in increased failures and wastes. Some people in the company knew how to do it at some point, and why it was necessary, but as the job was handed over to others and no one worked on the design to eliminate those awkward tasks, the message was forgotten.

On the topic of hand-overs, Arnaud asked his teams to develop a very thorough training protocol for the onboarding of an employee to a new patient, where the group leader will supervise all the tasks and gestures required for that patient, before leaving the employee on her own. One of the scores provided by the patient is about how serene and trustful they feel with the Aloïs employee. Arnaud remembers a quarterly visit during which he saw the patient, a severely disabled man in his thirties, fall asleep with the caregiver’s hand resting on his head. “What’s more serene than that?” he remembers thinking.

Care is important for the well-being of patients, but so are the stimuli coming from social life. This is an important extra offered by Aloïs, which, beyond home activities, arranges a quarterly event for all patients and their caregivers, with activities ranging from theater to karaoke, a wine tour of Bordeaux to chocolate making.

Aloïs measures participation to social events

In mid-2017, Arnaud was advised to check whether this ambitious service approach would not severely impact his margin. But he sees things the other way around: his hunch is that he should work on the quality of service first and the rest will follow. He was right: at the end of the year, profitability was double the expected level. As mentioned before, this strategy of differentiation pays off, and growth is certainly not an issue for Aloïs!


BOOST TRUST, INCREASE RETENTION

At this point of my visit, Arnaud and I walk to another set of visual management boards, where we engage in a long conversation over the problem of attracting and retaining talent.

Recruitment has been a headache recently, for a variety of reasons. New hires are needed both to grow (it may take up to six caregivers taking turns to assist a patient day and night, not to mention backups) and to replace those who leave.

As we talk, I draft on a piece of paper the causal model of the hassle:

Causal model recruitment problems - part 1

But recruiting is not so easy: between the upturn in the French employment market and the fact that Aloïs is not well known yet, the company cannot rely on a database of potential candidates.

Causal model recruitment problems - part 2

In this scenario, you have two options (none of them ideal): either growth stops or Aloïs staff will find themselves struggling with continuity of service for 24/7 patients – not to mention stand-by services on others – with the risk of straining scarce resources and generating even more turnover or absenteeism.

Causal model recruitment problems - part 3

Arnaud confirms the three steps he has taken with his teams to try and address the issue: “We brainstormed how we could build a solid database of potential prospects for recruitment, in addition to the very strong partnership we have develop with the local unemployment agency [which includes a 10-week course, mostly taking place at the gemba]. And we defined a takt time to complete the tasks to build it. We now track our achievements against the takt time.” Seeing an office task work at takt time, with weekly discussions on what is late and why, is a rare opportunity that I gladly jump at.

Studying the efficient collection of CVs

“Secondly,” continues Arnaud, “we have tried to speed up our recruitment process. September saw a relief after two or three strained months.”

Lastly, and this is the most interesting part, Arnaud and his teams have attempted to address the root causes of the problem (employee turnover and absenteeism). Backache is a serious concern there and stems from the fact that patients are sometimes reluctant to use a complicated and rather humiliating piece of equipment for lifting patients. They are simply unaware of the strain this puts on the caregivers. Arnaud is contemplating an investment in ergoskeletons, similar to exoskeletons but lighter and great to transfer the strength of the legs into the upper body. Another issue that creates absenteeism is recurrent illnesses, such as gastroenteritis: the caregivers cannot come close to patients suffering from this condition, so it is important for Aloïs to find ways to avoid contagion.

Another key point is convincing caregivers to accept being on call. They find it stressful and poorly paid. More generally, as we discuss with Arnaud, the problem is that the 120 or so caregivers at Aloïs are only supervised by six group leaders – in other words, 20 persons for one group leader. Taking into account the quarterly visits to patients, the recruitment and induction of new caregivers, this leaves little time for kaizen, improving standards, daily checkpoints and occasional last-minute replacements. Arnaud is thinking of developing a team of experts to take over on-call requests and start using them with new patients (while new recruits would be assigned to existing patients, where the operating standards are well known and agreed on). Could those experts take over a role of team leaders, supporting teams on the gemba smaller than the current ones? The scheme would offer increased career opportunities for caregivers, thus making a job in home care more attractive.

As we end the tour, Arnaud and I discuss at length what is being done to develop the competence of caregivers. This is another way to address turnover: as caregivers are given more autonomy in carrying out their tasks, and the freedom to improve their standards, their interest for the job will increase. Arnaud gives me two examples: “We ask caregivers – and not group leaders – to define the monthly operating schedule of tasks together with the patient. Also, when we establish the planning for the upcoming month, we take into account their own constraints to adjust the timetable – be it a dentist appointment or two days off to attend a wedding. They feel their needs are taken into consideration now.”

Working in home care is stressful, because of the seriousness of the patients’ conditions, but it pursues a great mission, in that it represents an alternative to a hospital or a nursing home. When I ask Arnaud what made him decide to leave the restaurant business to work in this sector, he takes time to think and then says” “I wanted something with purpose. Something meaningful. It was important for me.”



THE AUTHOR

Catherine Chabiron photograph

Catherine Chabiron is a lean coach and a member of Institut Lean France.

Using lean to gain a competitive advantage

NOTES FROM THE GEMBA – In the web marketing world, a competitive advantage is a matter of life and death for businesses. The author meets a firm that has been leveraging lean to gain one.

Jonathan Vidor started dabbling in digital marketing when he was in high school in the late 90s. He was designing websites at the time and reaching the highest possible number of visitors became a sort of competition among pals. As he tried to increase the number of hits, he learned plenty about the variables that can impact a site visibility and about playing around with keywords (this at a time when the web economy was still in its infancy).

The expertise he developed gave him another idea: through ads and carefully-selected keywords, he could make money by attracting potential clients looking for goods or services via search engines and re-directing them to commercial websites… in exchange for a commission. At 23, he made his first million. By 2004, he had created his digital marketing startup – JVWEB (more info here) – and led it to become a company with a yearly turnover of €10 million and employing 55 people (their average age is 31).

A dream come true.


SCALING UP IN A COMPETITIVE ENVIRONMENT

Like many startups, JVWEB eventually had to scale up. As Jonathan puts in, “we had reached a stage where we could no longer sign up new customers because our teams couldn’t recruit and deliver as fast as sales.” This slowly led Jonathan to turn to lean thinking.

As I reach JVWEB in Montpellier, in the south of France, I wonder how lean can apply to a company selling web marketing services to web platforms: can you imagine anything more intangible than SEO (Search Engine Optimization) services or advice on Google Adwords? I couldn’t! It will actually take quite a few questions, once on site, for me to grasp what JVWEB’s products are. After all, they were mostly invented after I started to work, at a time when the main tools I used where pencils, erasers and, on rare occasions, the only computer on the floor.

What is interesting about JVWEB’s line of business is that the value provided to the customer can often be tracked and measured, as data on the amount of traffic reaching a website before and after an optimization can be accessed easily. In a nutshell, JVWEB’s job is to provide advice to customers on how to become more visible on the Internet, thanks to an intimate understanding of the ever-changing workings of search engines. (The same is true for social networks, although tracking value there is definitely harder).

Though often ignored or underestimated, the capability to recruit, develop and retain talent and knowledge is a key success factor in most businesses, be they industrial or digital. In a fast-changing world in which once-unknown competitors can take over your market share in a heartbeat, it has become a matter of life or death.

This very scenario recently presented itself to JVWEB, which led Sébastien, who is in charge of sales, to dig deeper into his own trade. As Jonathan and I step into the room, Sébastien shows us how he tracks his leads’ conversion rate (face the bad news, if any, as early as possible) and how he checks each step of the conversion process on a big board, measuring the time it takes and highlighting errors or issues.

Interestingly, to understand why JVWEB had lost an offer they thought they had in the pocket, Sébastien managed to get in-depth feedback that helped him unearth the reasons behind the failure. He also got hold of a competitor’s offer, which he then broke down and analyzed in detail. “We have to learn fast what we can improve: are we clear enough? Are we solving the prospect client’s issues and taking care of her expectations? Do we really understand what those expectations are?”

Competitors are not the only threat JVWEB has to worry about: the customer can also decide to hire or develop internal resources to do just what they do (from SEO to recommendations on ads). This means JVWEB teams are often on the edge of their seats, having to define what key competencies they need to develop further and which knowledge gaps they need to address.


MANAGING KNOWLEDGE GAPS IN DELIVERY

Aymerik, who manages two-thirds of JVWEB deliveries with his teams, has dwelled on this problem for a while. “It would take us nine months to fully train new hires,” Aymerik says. “We sort of assumed that they would learn on the job. And when they were eventually trained, we did not pay enough attention to what they still needed to master.” As a result, training has become a key activity for team leaders at JVWEB. Dojo topics have also been defined, from pure technical mastery to how to prepare and manage a call with your customer. The process of onboarding new hires now takes two months. The recruitment process itself has been successfully “kaizened” by Tiffany, the person in charge of HR, both to reduce lead-time and to clarify how to recognize talent and ad-hoc profiles.

Together with Jonathan and two other members of the management team, Aymerik visited Tier-1 and Tier-2 Toyota suppliers in Japan last year. There, the team was struck by the constant attention to details TPS old-timers showed. The trip made them change their minds about the size of their teams and the role of the team leaders. “After we got back from Japan, we went from large 15-people teams to cells of five account managers and one team leader. Half of the team leader’s time is now assigned to dojos, knowledge development of the team, problem solving and support,” confirms Aymerik. The rather invisible work done at JVWEB has now been made more visible, as I can see it in C1 (the first cell). Lucas is the Team Leader there. Visual management boards highlight the rate of customer satisfaction of the week (NPS – Net Promoter Score), but also ongoing kaizen activities and recent dojo learning points.

“The NPS question is a bit too generic”, Valentine, the C2 team leader, comments. “We now prefer a direct exchange with the customer on the activities of the week to try and highlight what could be improved.” The team can now discuss topics, such as the results of the optimizations made the week before, but also the best timing to send over recommendations, since the customer’s web developers’ availability is a prerequisite for triggering a real Just-In-Time process and avoiding a pile-up of unheeded work.

Another addition to JVWEB’s way of working that resulted from lean thinking and the trip to Japan is that all cells now try to implement a detailed production plan and learn from what could not be produced as planned. As we pore over the details of a typical week’s activity to support a customer, it is obvious to me that the teams have taken lean very seriously and that they are trying to create a regular flow, pulled by the daily tasks required by their customers, (where those tasks play the role of Kanban cards). They have not always succeeded at reducing the work content of such tasks below one hour, which means that they may not yet be capable of digging into the details of each piece of work to significantly reduce variability. They have, however, made great progress along the way… and picked up a few quick wins. The SEO team has even designed small daily production cards on which each account manager can write the production plan for the day, and in the adjoining column, the actual production. At the end of the day, they all discuss what they learned from any gap between planned and actual delivery, and what they can do to improve their understanding of the actual work content or the reduction of useless tasks.

Internal kaizen, however, has its limits if you don’t understand what constraints or issues your products or services create for the customer. Jonathan is preparing the next step and wants to organize gemba walks on customer premises, so that the JVWEB teams can observe busy customers running around from meeting to conference calls, with little time to read optimization reports unless they are concise and to the point.


FROM KAIZEN TO COMPETITIVE ADVANTAGE

In what is now a very competitive environment, Jonathan and his team have thought hard about how to regain an “unfair advantage” over their competitors, as Eric Ries labels it in The Lean Startup. To this end, the delivery cells are doing kaizen on day-to-day tasks, focusing on what could not be produced on time or right first time, or what does not match the customer’s expectations. It was a great start, but it might be coming a little late for those kaizen tackling social networks. The team in charge is working hard to catch up.

This is why an R&D team led by Guillaume is assisting the team, taking over whenever tools or reports need to be improved in the delivery. To clarify what they have to do and ensure they do not miss any customer requirement, the team has been working with on a Heijunka Board, levelling up the improvements they have to make for each of the delivery cells over the course of the week.

The board titled “To-do list” is fed by internal-user requests (to clarify the need, the user is systematically challenged with the question: “What is the problem you are trying to solve?”), but also by improvement ideas or kaizen results from the delivery cells or top management. Learning from delivery kaizens and user requests is the very first step towards innovation, because it is a difficult learning process over what works and what does not, what helps customers and what represents a hindrance. The R&D team meets once a month to share the knowledge they have captured this way.

Jonathan and JVWEB know that they need real innovation, not only improvement of what they already offer, to get a competitive advantage, and the R&D team also works on new solutions (one of them being a tool that provides customers with an immediate and automated mapping of the weak points of their advertising campaign on the web).

I start an interesting discussion on the finished products JVWEB sells with Jonathan and his management team. How can they make them visible, palpable like any physical product, so that the teams can step into the customers’ shoes and discuss perceived quality, ergonomics or user-friendliness? How can you discuss kaizen and innovation on products that you can’t see in the collaborative space? Guillaume and his team have stumbled upon this issue and started in a dedicated room a competitive product tear-down (screen copies on the wall), to try and discuss angles and competitive advantages over their own solution. But they have not yet come to the point where their own product hangs on the wall for everyone to see, so that its relevance, reliability and ergonomics can be openly discussed.


DEFINE WHAT WE NEED TO LEARN

In today’s challenging business environment, a company needs efficient and autonomous problem solvers. At the same time, top management needs to move closer to the gemba and help their teams find and face the problems they need to work on. What do the teams need to learn? Where are the knowledge gaps? What are the “critical-to-customer” expectations? Where do they stand there versus the competition? Interestingly, JVWEB has started to work on this very issue in their management Obeya, with a spider chart comparing customer expectations and where they stand at this stage. They have also started to define some challenges and paired the ongoing kaizens with each of them. All teams meet once a month to discuss and confirm those kaizens and define which ones need specific attention.

What we see in Japan from the TPS experts is the obvious part of lean management. Behind visible displays of tools and concepts, the PDCA cycles serve long-term, strategic goals. The find and face phase (as described in The Lean Strategy) has only just started for Jonathan and his teams. What is learned on the gemba and from kaizens will need to be brought up to the management Obeya, and, in turn, Obeya challenges will have to frame the efforts of the teams, so as to build, together with the front line, the solutions that will enable sustainable growth.



THE AUTHOR

Catherine Chabiron photograph

 Catherine Chabiron is a lean coach and member of the Institut Lean France. She previously held the role of Director of IS Governance at Faurecia, a large French industrial group, working for eight years at the heart of the IS department’s lean transformation.

An interview with lean thinking pioneer Freddy Ballé

INTERVIEW – Having started to explore TPS in the mid-1970s, Freddy Ballé is one of the great pioneers of our movement. Here, he shares what he learned about Toyota over the past 40 years.

Interviewee: Freddy Ballé, lean pioneer and author

Interviewer: Catherine Chabiron, lean coach and member of Institut Lean France


Catherine Chabiron: Freddy, you are known worldwide as the co-author of the Gold Mine trilogy, but you are also a lean pioneer in France, having influenced at least two generations of French lean thinkers. Over the past 40 years, you have had developed an impressive track record of lean transformations. What caught your attention and convinced you to start this life-long investigation? 

Freddy Ballé: The starting point was my assignment in Mexico in the early 1970s as Deputy Manager for Renault Mexicana. What struck me back then was the fact that, when faced with quality issues on a car (and we were), the hours we spent on rework exceeded the time we spent on the final assembly. I could sense something was wrong, but could not pinpoint what was at fault in the process. Let’s say this alerted me to Renault quality and made me curious about the existence of other systems.


CC: Where was your first encounter with Toyota and TPS?

FB: You will be surprised to know it was in Africa! In the mid 1970s, one of my colleagues from Renault warned me that an obscure Japanese competitor was dumping prices there and asked for my help to prove this was the case. However, our investigation demonstrated the opposite: not only was Toyota (it was them, indeed) selling cars at lower prices than ours, but they were also making a profit.

At that time, provided a product launch was not underway, we could easily visit a competitor’s plant. When we went to see Toyota’s, we were confronted with a puzzling situation. It was quite obvious that they were far more productive than we were, with one production line delivering 600 cars per day with half the staff we had for the same output and the same type of operation.

Yet, as we walked down the production line, we couldn’t figure out what was different. For example, we would follow a stamping line of door panels through a shopstock, from which the stamped panels were taken to the next step. In Renault, the next step would have been to move allthe door panels to a central warehouse, so it was natural for us to assume that Toyota did it the same way. What we didn’t see during our visit was that door panels were sent directly to the next production step – welding. There was no central warehouse where semi-finished products would wait for days or even weeks.


CC: When did you sense there was something big in there?

FB: Assessing a competitor with your own system in mind is extremely difficult: we simply did not understand what they were doing when looking at their operations with our own set of binoculars. They simply did not focus on the same things. They were obsessed with their work-in-process, stock level and the flexibility necessary to reduce it. They told us, for example, that on the large presses, their SMED was half an hour when ours was five hours minimum. They even gave us a demonstration.

In the same way, at Renault we were measuring output from our lines by the number of cars produced compared to the capacity we had on the line. Toyota was measuring the time the line stopped for quality reasons against the theoretical production time, which gave them a permanent measure of quality.

I was puzzled, but progressively started to get to the idea behind this different way of working: Toyota was targeting flexible production lines to easily switch from one variant to another. They were also learning to work with small batches to reduce the lead-time for customers and enforcing quality checks at each station. (Whenever a defect was detected, the team leader was summoned for help. In case of failure to fix the problem, the line would be stopped!) Things at Renault were different: defects were listed on a piece of paper, but the car would proceed along the line and only at the end would it be taken to a large repair station. There, defects were corrected (provided they had been correctly reported, collected and understood to begin with).

Toyota was also very focused on what we now call “motion kaizen”: to reduce the number of steps and gestures the operator had to perform at his station (any useless motion is a waste). The larger the containers of components along the line, the longer the assembly workstations – and higher the number of steps the operator has to perform. Toyota’s sharp outlook on useless movements led to a switch to small containers.

I have a story about this. Years later, at the time when I had moved to Valeo as Industrial VP, Toyota was eager to penetrate the European market and had therefore developed close relationships with a number of automotive equipment manufacturers in Europe. We received a visit from “the” Toyota TPS expert and I asked the Branch Manager of the plant we visited to participate. Already engaged with a customer, he was extremely reluctant but I insisted he come along to the gemba. Without saying a word, our TPS master walked along the line observing the operators. He then took a small box of clips (used to assemble the car headlights) and moved it by a few centimeters. He then stepped back and observed the operator’s motions again. He moved it a second time, closer to the operator, and eventually appeared satisfied. My Branch Manager took me aside and gave me hell: “You had me postpone an important meeting for a mute old man, whose sole contribution to our production efficiency is to move clip boxes by a few inches!”


CC: Would you say that this paradigm difference in production also stemmed from Toyota’s history? The company had very difficult beginnings, in a small country where mountains often limit the space available for large industrial sites, and with a small domestic market.

FB: Yes, it certainly does. Furthermore, Toyota experienced major quality issues on their very early models and, just as they were ramping up, the Second World War broke. After the conflict, they suffered heavy financial losses and strikes. All of this led them to re-think their approach: “How can we get everyone to worry about quality and work on it all the time?”. This is how they came up with concepts inspired by Edwards Deming like production cells, quality circles and andon.

At Renault, the production line was solely looked at in terms of output. Quality only appeared as a final step. In fact, quality essentially meant managing rework based on a list of problems in upstream processes. In Toyota’s vision, the same production line was conceived as a string of production cells. With five to seven operators, each cell checks its own quality with the clear understanding that operators should stop the entire line if they failed to fix a defect. This way, the defect can’t move to the next workstation.

As time passed, I have seen many versions of a modernized Renault approach: defects are reported in an IT system instead of paper. However, unless they are killed there and then, defects are likely to be overseen and delivered to the customer. From design to assembly, kaizen is key.


CC: What did you learn from Toyota about product design?

FB: The first thing I learned was to pay attention to the customer and how he or she was using our products. You will have heard, like I did, plenty of stories on how Toyota’s Japanese engineers learned from their customers. Getting ready to design the Lexus, they went over to study at close hand representative premium services in the US. Similarly, for six months Honda studied hundreds of families taking kids to school and collecting them, before proposing a new van with rear sliding doors. They had a hard time convincing their Management Board, who feared the van would be identified as a truck instead of a family car. It turned out to be one of their greatest successes.

While I was at Renault, I was involved in the company’s efforts to enter the German market: we improved our designs after spending time watching people getting in or out of cars. This helped us to gain market share there. But I also learned the hard way that things can go the other way. After moving from Valeo to Faurecia, I remember presenting a prototype for our new dashboard to Audi, whose answer was clear: “This is a dashboard for Renault, not for Audi.”

Toyota relies on the role of the Chief Engineer. The CE has customer preferences and constraints in mind at all times. He helps define the product concept and fights for it, while taking into account advice and suggestions from functional experts. We are very far from the classical project manager, whose role tends to be limited to checks on deliverables and reporting on budget and milestones. The first thing the Chief Engineer does – aided by a small team – is to go to the plant producing the current model, discuss with the operators and learn from them about current quality or assembly problems, and work with them on reducing or eliminating them in the new model.

Toyota has also promoted a set-based approach in development. Our R&D departments are still reluctant to study parallel options, which they consider too costly. So, they end up selecting one solution to then discover too late it doesn’t work. This is where the real cost is, because you have to start all over again or launch something with a bug or not at the level expected. With their first Prius electro-magnetic system, for example, Toyota started with 80 potential solutions, tested them, came to an agreement on 40 and then, through further tests, halved those until it could choose one option. One more argument goes in favor of set-based concurrent engineering: the quality of the design typically relies heavily on the designer’s expertise, which this approach enriches through continuous and efficient problem solving.


CC: I heard you say that quality is the starting point of any industrial process and that kaizen is the key to it. Can you share more thoughts on kaizen, please?

FB: As I mentioned before, the key to understanding Toyota’s success is their 5 to 7-strong cells and their team leaders. At Renault, we were checking the actual output against the production plan at the end of the day. Toyota made me realize that a permanent check throughout the day is far more efficient. The part boards objective is by the hour, as is your opportunity to ask why an objective has not been achieved, if necessary. This enables management to see things that could not otherwise be seen, react faster to them, investigate wherever necessary, and collect fresh data. Doing this at the end of the day is too late, because you will have already forgotten what happened in the morning.

At Valeo, we implemented this type of cell, encouraging operators to think about their own tasks and work environment. With limited investment, operators progressively defined very efficient team standards, started to track their safety, follow the takt time on part boards and comment on any gap. When spotted, they displayed the problems and how to solve them. As Valeo grew both organically and through acquisitions, the team cells and their efficient standards made onboarding of small structures much easier.

None of this can work, however, without management at the gemba, checking on quality or gaps versus takt time, supporting initiatives, and asking questions. When management helps solve the problems exposed by the front line, operators gradually become more involved and positive. They also learn to work as a team: they will identify problems together, act together and feel responsible for product quality and takt time.


CC: The team leader is a key role in the organization of the cell. How do you identify those team leaders?

FB: The team leader is a coordinator, not a boss. Expertise on the product and technology is key. A team leader needs his peers to acknowledge this expertise. And yet you might still find you have not made the best choice. Experience taught me that the 5S exercise reveals the best team leaders: during it, those operators who show more ability to see problems and suggest options are not necessarily the person initially earmarked for the job. The right person is often the quiet and reserved one. That you don’t usually hear from.


CC: What about kanbans?

FB: Kanbans give you the takt time, they are the pace maker operators work to.

Kanbans also have unexpected consequences on the assembly line. When visiting Toyota I was particularly struck by their assembly lines. I once asked if they balanced out the workstations on the line taking into account the work content of the operators as we did at Renault. The answer I got was: “Yes, we not only take into account the work content, but also the kanbans”.

It took me some time to understand that this answer was about the components feeding the line. Large batches of similar cars, for example, with the same components (such as air conditioning) could not have worked with kanbans. In Toyota, the lines were replenished using small trains and kanban signals. They used small containers fed by flow racks and regulated by kanbans. This led them to further work on the SMED and redefine the production batch sizes. The kanbans and the replenishment rate directly contributed to the flexibility of the line.

When we started discussing kanbans at Renault, an engineer (who was completely missing the point) suggested to enter the Digital Age and design IT kanbans from the start. I am totally in favor of using computers when they are truly needed and for the added value they bring, but their role should be contained. Cardboard kanbans are strong visual tools that tell you whether you have a problem or not as you walk by. With an IT system, anomalies in the data are only seen by people somewhere in an office, when and if they take the time to check.


CC: How do you explain Toyota’s ability to retain its leading position both in operational efficiency and innovation over time?

FB: In Toyota, kaizen culture explains it all. Worrying about quality and takt time all the time, everywhere, has ingrained the idea that everything can be improved. We all know the story about Ohno’s circle: he would draw a circle on the factory floor using a piece of chalk and keep managers standing there, inside the circle, until they could think of five ideas for improvement.

In the same way, in product development, when you are faced with a difficult problem and someone comes to you and tells you he or she has found a solution, try answering like our engineers were answered while being trained by Toyota: “Not good enough, I want you to come up with three solutions and tell me how to select the best one.” This here is one of Toyota’s strengths.


CC: What would be your advice to CEOs, out of your 40 years of lean experience?

FB: First of all, lean management is built on sand if the vision behind the tools and routines is not properly understood. This is particularly true with Industy 4.0 or Digital factory, amongst the latest fashionable trends in industry. Digital parts boards do not have space for hourly comments on gaps. I am sure the defects recorded online will feed into magnificent Paretos, but the really important thing is actually to prevent passing the defect over to the next workstation, display which problem the cell is working on, and check on the learning progress.

My second point will not come as a surprise considering my experience at Valeo. I would say that implementing kaizen and pulled flows required extreme determination from both the CEO and myself. For most people, small batches and a set-based approach are counter-intuitive. To establish them, you will have to fight preconceptions, which requires will and  the ability to explain why. You also need to dig in the details with your teams, give them a broader view whenever they are stuck, and find new angles with them. I call it the “the helicopter” method: to see where a box of headlight clips should be positioned and, when needed, to step back and be able to check if the flow of the whole line is efficient.

CEOs and managers not only go to the gemba to see things and enforce solutions, but also to learn how to adopt a Socratic line of questioning – not so easy when one has been educated and trained to respond to problems with immediate solutions and tactics.


CC: Socratic questioning?

FB: Learning your way in offices and on the shopfloor, you start seeing problems, waste or unattended issues. Refrain from saying (or even thinking): “That’s stupid, let’s do something about it immediately!” If you want people – whoever they are – to grow, you must encourage them to notice when there is a problem, weigh out options, try out solutions, and learn by doing. Ask questions such as: “Why do it that way?” or “Why is this part lying there?”. With their answers to your questions, help them identify the problem. Add new questions leading them to formulate even more questions, such as “Is there another way to do this?”.

Problem solving is the art of questioning. Whether you start an A3 or any other form of problem solving, the key point is the agreement reached by the team on the question: “What problem are we trying to solve?” Think also of the 5 Why’s: the answer to each should be facts – checked through tests or investigations on the gemba – and not opinions, or even assumptions made by brainstorming in an office.

I have recently started to study Japanese again, and I have discovered by pure chance that shitsu means quality and shitsumon means question. Interesting, isn’t it?



THE INTERVIEWEE

Freddy Ballé photograph

Freddy Ballé started visiting Toyota plants in Japan in the mid-1970s while head of product planning and later manufacturing engineering at Renault, where he worked for 30 years. Upon leaving Renault, he pioneered the full lean system implementation at Valeo as Technical Vice President, then at Sommer-Allibert as CEO, and later at Faurecia as Technical VP. He is co-author with his son Michael of The Gold Mine trilogy.


THE INTERVIEWER

Catherine Chabiron photograph

 Catherine Chabiron is a lean coach and member of the Institut Lean France. She previously held the role of Director of IS Governance at Faurecia, a large French industrial group, working for eight years at the heart of the IS department’s lean transformation.