Lynn

Last Friday, Nicolas Chartier and Guillaume Paoli led the largest Initial Public Offering on the Euronext stock exchange since 2019 for Aramis Group, the company they started 20 years ago with a phone and a laptop in a studio. This is a spectacular entrepreneurial success and lean is part of the story.

Keen students of business, Nicolas and Guillaume knew that growth would bring its load of operational problems. Watching other companies in their sector flounder, they saw that complexity and growing legacy could easily lead to poorer customers service and increased overhead costs. They’d heard about lean since their business school days and read what they came across about it, thinking of ways this way of thinking could help them sidestep “big company disease”.

In 2012, Guillaume and Nicolas started an experiment with a lean consultant to sort out the operational issues they were painfully aware of. The results were interesting, but inconclusive. Still, in the next couple of years, they hired a lean director and established their own internal lean program that was essentially project based. Their experience was common to that of many leaders who decide to try lean: each project showed initial appetizing results, but then failed to deliver in the mid-term, to actually transform processes, and in the end to demonstrate bottom-line results.

By 2017, they finally followed the advice they’d read in all the lean books, found a sensei and started learning the Toyota Production System (TPS) on the gemba – the traditional way. Although this approach didn’t look like much to start with and certainly didn’t seem scalable, it turned out to be the pivot to recapturing an improvement dynamic throughout the company and, in the end, a spectacular success. What neither of them expected was that lean was not simply a way to get operations under control, but a fully different way to do business – developing people to always put customers first. Lean taught the executives to ask the hard questions: “What problem are we trying to solve?” “What is our analysis of the current situation?” “Have we asked ‘why?’ deeply enough?” “What are the alternative options to every strategy?” – questions that encouraged people to learn rather than shoot from the hip and just decide and execute.

The turning point occurred when Nicolas asked himself: why shouldn’t the CEO be the sensei? Indeed, this was the same question previous pioneers, such as Art Byrne or Freddy Ballé, had answered. Lean CEOs act as sensei to their organizations. Nicolas went out of his way to meet other experience lean leaders, like Marc Onetto from Amazon or Orry Fiume of Wiremold fame, and led a team of lean authors to clarify the subject, resulting in his co-authoring The Lean Sensei. This team of lean thinkers continued to explore the learning theory underpinning the practical learning knowledge acquired from the original Toyota sensei.

It is often said of lean that many companies try but few succeed. But when they do succeed, they do so spectacularly. Looking inside success stories, like Wiremold or Aramis itself, gives us hints on what can go right and wrong in a lean transformation. In some areas of the company, such as the commercial network, logistics and production, Nicolas was quickly successful in mentoring his direct reports to the TPS as he was himself being coached, while in some other areas not so much. The difference in trajectory was starkly visible.

Results from TPS, it turns out, do not come from applying better processes to the organization but from creating a learning environment where the people themselves learn to look for ways to improve customer satisfaction and lower overall costs, by themselves. The TPS is not an organizational set-up, but a training program with four clear levels:

• Line of sight: the top of the house orients everybody every day towards customer satisfaction and towards asking again and again what customer satisfaction really means in this case. The question always comes down to “Are we doing this because it’s better for the customer or because it’s easier for the company?” This line of sight reminds us to always try to bring value closer to customers – it gives us orientation and intent.
• Challenging problems: the constant pressure to 1) reduce lead-times (just-in-time) and 2) build-in quality by reacting faster to every abnormality (jidoka) are “troublesome problems”, as they are known in learning theory: problems that never cease to be difficult, never cease to be a problem (whatever your current lead-time, halve it) and lead to breaking the current logic and coming up with new, creative breakthrough concepts.
• Routine deliberate practice: challenging problems deliver breakthroughs only if people practice their problem-solving skills daily, through routine learning activities such as making sure the daily workload is leveled, practicing with known standards, and engaging in kaizen to look for small-step improvements.
• Learning conditions: in order to learn-by-doing, teams must be autonomous and led by a trained team leader. Additionally, people must be trained regularly to handle their own problem solving and the systems of the company must be enabling, rather than red-tape bureaucracy that drags on everyone improvement spirit.

TPS	Learning level
CUSTOMER SATISFACTION	Orients to what is needed to be learned daily: how to offer better options, improve quality and reduce costs
JIT + JIDOKA	Troublesome problems leading people to break the logic of their current processes and look for breakthrough concepts
EMPLOYEE SATISFACTION	Daily, deliberate practice of handling workloads, knowing standards and looking for small-step improvements with kaizen
MUTUAL TRUST BETWEEN MANAGEMENT AND EMPLOYEES	Creating learning conditions by establishing a work environment that enables learning, rather than allowing bureaucracy to inhibit it.

This learning model is based on the theory of problem-based learning – how adults learn. Adults learn very differently from children because they are already experienced with many topics, they know what they know. Consequently, a smart way to get adults to learn is to let them grapple with concrete problems. Real-life problems trigger:

1. Activation of existing knowledge and, hopefully, striving for elaboration of this knowledge.
2. Situational interest: learning is hard, but people are motivated to make the effort because it’s part of a team activity and they’re expected to show something.
3. Self-directed learning: the trickiest part of the approach. Learning does not occur during the group discussions but does happen every time someone goes on to read, try, or discover something on their own.
4. Scaffolding and mentoring: the methods used to analyze the problem and the mentoring required to accelerate progress (good mentors steer learners to more promising experiments).

These four elements of problem-based learning are ever present in the TPS, which forms a full learning system, getting people to both practice at routine level through standards and kaizen and go for the bigger breaks, with just-in-time and jidoka. In Aramis’ case, the company succeeded in reducing customer delivery lead-time from several weeks to 24 hours by solving both small and large challenges.

CHALLENGE	RESPONSE
Pull flow of cars	Displaying on the site cars with reliable lead-times – if uncertain, the car is not offered to customers. Shipping on site only the cars for next-day delivery to customers. Solving car registry issues that stopped physical delivery of the car. Working closely with operators preparing cars to support them in guaranteeing quality and timeliness of delivery.
Truck control	Setting clear timetable objectives for trucks. Reducing variability in arrival and waiting for trucks on sites. Eliminating pain points for truck drivers to make their work easier on our routes and sites.
Acceleration of information flows	Reduce dependency on postal delays. Accelerating financing by focusing on simplifying paperwork and waiting.

The truly difficult point is that learning remains individual. It requires a collective setting for motivation and exchanging ideas and points of view, particularly in the fog-of-war, but the magic moment remains personal – someone has to learn something, and then share it to expand on it. Learning also requires accepting to step out of one’s comfort zone and try new things; not everybody is equally open to this experience.

This is why a lean transformation seems like a journey. In fact, transformation occurs where chains of mentoring, from senior to junior, occur. In departments where people side-step TPS and are content simply implementing the new processes as if they were best practices to roll out, nothing much happens (nothing bad either, as the new processes tend to be copied from the learning obtained by lean thinkers).

This is why teaching lean piecemeal, through the tools, through “lean” projects or through the many “lean-light” methods invented by consultants is a bad idea. The TPS is a robust, time-tested and smart method to visualize problems, identify waste and kaizen it – and from doing so, through deliberate, constant practice and lifelong hours, coming up with breakthrough ideas (such as the idea that trucks can be controlled to the minute) and breakthrough results (24-hour delivery). A lean transformation is not an organizational transformation, but a thinking one – which comes from learning and practicing the TPS.

Like Art Byrne or Freddy Ballé before them, Nicolas and Guillaume are among the most talented and innovative entrepreneurs of their generation. What lean offers them is a method to achieve repeatable results, as they are currently demonstrating with their hypergrowth, integrating operations in new countries without imposing central processes but simply by mentoring TPS on the gemba. This, we believe, is the vexing answer to why so many companies try and so few succeed, but those that succeed do so spectacularly. Lean is a learning system, and it needs to be taught one person at a time, on the gemba, in a chain of mentoring – that is what a true lean transformation looks like.

LEAN CONSTRUCTION Congress will be organized jointly with LEAN IN PUBLIC SECTOR (LIPS) Conference on  May 3-5, 2021.

We are working hard to make the LCC & LIPS conference as successful as possible and announcements regarding programme etc. will be made soon!

Find out more here

 

Title: Recognising Global Innovation & Lean Practices with Public Sector
Presented by: Glenn Ballard from University of California Berkeley and Founder of Lean in Public Sector.
Presented by: Amr Abdel-Azim – Michigan State University
Date: 24th November 2020

Click here for video presentation

Click here for slide presentation

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!”

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.

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.

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.

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.

As 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.

---

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 is a lean coach and member of Institut Lean France.

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

What 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?

Rafael 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.

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.”

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

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.

“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.

---

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.

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

This 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).

---

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.

---

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.

The 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 is a lean coach and member of Institut Lean France.