Link to the White-Paper
The Ideal Lean Assessment Scorecard
The Ideal Lean Process
- All employees show up to work every day, are motivated, can work at any operation and are constantly looking for ways to improve processes
- Supplies can be ordered and delivered immediately, in whatever quantities are needed and are defect free
- Equipment never breaks
- Processes have no variation and produce defect free products
- Work can be divided up into very small increments and all processes have identical cycle times
- All processes flow in one direction; there is no need to double back
- There is no cost to change from one product to another
- Tools and information are exactly where needed at all times
- Orders from customers come in at the same level (no variation) every time period
- All operations are inherently safe with no possibility of injury
What to do when you’re not Ideal?
There is no company or process that meets even one of these ideal states. However you can use each one to determine your current state and decide what to work on now, using Lean, Six Sigma or any other business tool. This can be done with a 1 – 10 scale, with 10 being ideal and 1 being the lowest level of performance in this area. Below I will discuss each ideal state, assuming you scored low for that state. Use this information to improve and get closer to perfection.
All employees show up to work every day, are motivated, can work at any operation and are constantly looking for ways to improve processes
Improvement starts with measurement. Is attendance and turnover a key performance measure you review weekly or monthly? This is the place to start. Are you communicating with your workforce, or are the “working in the dark.” People who are working in the dark do not feel valuable and therefore are not fully adding value. Do you have an active cross-training program, which tracks and incents people to learn new skills? Flexible employees are not an accident. This requires you are purposeful, organized and consistent in your pursuit of this goal.
Supplies can be ordered and delivered immediately, in whatever quantities are needed and are defect free
Once again we begin with measurement. Having ideal suppliers starts with measuring suppliers on these dimensions. Suppliers who score low should be subject to completion; to find better sources of this service or product. One of my clients has a saying, “Would Wal-Mart do it that way?” He means would they accept sub-standard products or service. An active purchasing department that rewards the best suppliers with more business and removes the worst can move you to an ideal state.
Equipment never breaks
Toyota created a method called total productive maintenance. It is largely driven off of operations (not maintenance) personnel conducting most of the preventive maintenance tasks and even perform lower-level troubleshooting and repair. This requires detailed record keeping and training. The theory is that people that operate the equipment will take better care of it, and get to know it better, making repair times faster. In addition, the people that work on the equipment don’t have to wait for maintenance to show up.
Processes have no variation and produce defect free products
Process variation and mistake reduction largely falls under the business tool called Six Sigma. There is a lot to this tool, but in summary we use statistical analysis to measure variation and mistakes. This helps identify the root cause of the problem. However, once problems have been fixed, constant measurement is required to prevent reoccurrence.
Work can be divided up into very small increments and all processes have identical cycle times
One of the goals of Lean, and any business process, is to keep product moving and get it to customers. When products (which include physical products and also information) batch up and wait around, costs build up and customers wait. This both disappoints customers and lengthens the time to collect their money.
If you can divide up the work into roughly equal amounts of time, it can be handed off and flow to the customer. Where this cannot be done, there are a variety of mathematical balancing tools, to help overcome this barrier and keep product moving.
There are many examples of this in manufacturing, healthcare and financial services.
All products flow in one direction; there is no need to double back
Sometimes in processes there is a need for product to “double-back”, going through a machine twice. It is very difficult to create a good flow when this occurs. One thing Toyota discovered is that lower-cost purpose-built machinery, that may not be as fast or efficient, can be very useful for preventing double-backs. Where a very expensive, and flexible, machine could not be justified, an inexpensive purpose-built machine can make economic sense to use in the flow.
There is no cost to change from one product to another
One of the most powerful Lean tools comes from Shingeo Shingo, founder of the quickchangeover method. This method uses time studies to analyze elements of a set-up or changeover and by categorizing them into internal (must be done with the machine off) and external (can be done with the machine running) seeks to reduce the time the machine is down or not producing saleable product.
Tools and information are exactly where needed at all times
The solution to searching for tools and information not being where needed is 5S Visual Management. This tool seeks to standardize work and ensure that there is a place for everything and everything is in its place. It requires constant attention and “re-5Sing” to ensure its sustainment.
Orders from customers come in at the same level (no variation) every time period
This ideal state is most likely the hardest to achieve. However there are some supply chain management tools to reduce order variation.
You must create visibility of end-customer demand to all echelons of the supply chain. This will reduce over and under ordering, which can artificially create peaks and valleys of orders.
Some supply chain partners use collaborative planning and forecasting, where everyone uses the same forecasts and shares production plans. This creates a more steady state and reduces artificial peaks and valleys. There will still be variation, but not due to over or under reacting to customer demand patterns.
The last tool is vendor management inventory. If you have a customer that creates too much variation in ordering, you can suggest that you manage their inventory of your products at their site. This provides you will visibility and you get to decide on the replenishment cycle, with the promise that they will always have what they need. It makes you an ideal supplier.
All operations are inherently safe with no possibility of injury
I put this ideal state last in this article, but it should be first in your mind. Not only is this morally important, but safer companies have been shown to be more profitable and safer sites more productive. 5S has been expanded in recent years to include safety… being called 6S. While a 5S workplace can be safer, there is a science to safety that is not included in 5S. This is called behavior-based safety. It is also a moral absolute for my safest clients to never promote speed over safety. And as I stated earlier, it pays off in greater profits because it standardizes work, reduces turnover and creates a motivated workforce.
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“We are pleased that Essex selected Supply Velocity, Inc. as our Lean Implementation Partner. At one facility, we have saved over $350,000 in work-in-process inventory, reduced throughput time from 2 weeks to minutes and increased inventory turns 3 to 8 times per year. All these results are in just 6 months. Our return of investment is very high.”
“In a time of volatile supply chain disruption, Supply Velocity is helping us develop Demand and Supply Planning processes to proactively tackle these new challenges. They are genuine partners, working with our team, facilitating and teaching.”
“C&R was struggling with labor productivity. The construction crews were often missing materials that they needed to do their work. This caused significant idle time. Supply Velocity, Inc. and C&R used value stream mapping and visual management tools to make dramatic improvements in operations. Most importantly, two years later C&R is sustaining and improving on the implementation. C&R’s return on investment was 11:1. C&R had a record year last year in both sales and profits and would not have been able to pull it off without the changes Supply Velocity, Inc. helped us make.”
“Mitch Millstein and his team helped guide our shop fabrication division in the re-layout of our custom pipe and steel fabrication facility when we moved into a new building. It is not only the results but how he helped. We were involved in every step. I personally did time studies and was able to see the non-value added steps required to manufacture in our old layout. When we created our new layout, everyone was involved, from the executive team to our direct labor force. With Mitch’s help we increased our throughput by a 3x multiple, while providing more competitive prices to our clients as a result of the efficiency improvements.This has enabled us to not only make more money but also to expand our commercial reach and serve more, and larger customers. I would recommend Supply Velocity to any company that wants to make improvement in supply chain and operations.”
“We used Supply Velocity on our Warehouse optimization project. One of the key characteristics of Supply Velocity is that they listened to our requirements and provided a clear path for our Warehouse processes using lean tools and our future sales growth as objectives.”
“We engaged with Supply Velocity to help us embed process improvement at all levels of the business. Our team learned from Mitch to let the data drive decisions, to use Lean tools to help us see our processes critically and objectively, and to create a control plan to manage all of the tasks that were the outcome of the data study.The project turned out to be very significant to the company and most importantly, our customers. We reduced our customer wait times by 40%, and cut in half the labor cost to fulfill customer orders.
Some results are not able to be measured. However, as a result of this project, we have started to build a Lean mindset and culture, which is part of our strategic mission to save our customers money. Supply Velocity has been a valued partner in this mission.”
“We are using Supply Velocity’s Lean Six Sigma methods to analyze a variety of processes including rationalizing SKUs (stock-keeping-units). By using math to evaluate SKUs we took some of the emotion out of our decisions. We expect significant increases in sales and productivity from reducing poor performing SKUs.”
“Anheuser-Busch Precision Printing had been implementing Lean Operations on our own for the past two years. We needed to move faster and partnered with Supply Velocity, Inc. Through Supply Velocity, Inc.’s mathematical workflow balancing and visual management tools, dramatic improvements were achieved. The entire converting operation was rearranged based on Lean principles. The result is a 20.6% productivity improvement, enabling us to operate with 23 fewer people in production.”
“Supply Velocity has helped Clean succeed in a number of ways. First, they provided the education that kicked off our Lean Process Improvement journey. They also facilitated a number of large supply chain and process improvement projects including: 1) building quality into our direct-labor productivity incentive program, 2) designing the layout of our garment warehouse, and 3) streamlining our route service process.We have integrated the methods that Supply Velocity taught us into our management and strategic planning. In the process our quality measurement has improved 22% from 2013 to 2015, we have reduced required annual labor by 2200 hours from the garment facility layout project and we’ve seen 50% decrease in error rate. Obviously the numbers speak for themselves, but just as important, Supply Velocity has been fun to work and have become true partners. They have “taught us how to fish” so our internal teams are able to implement change on their own, with the skills we learned from Supply Velocity. This relationship has been invaluable.”
“In the spring of 2003, the St. Louis Area Chapter of the American Red Cross engaged Supply Velocity, Inc. to perform a study and make recommendations to streamline office processes, maximize cash flow in purchasing and warehousing and restructure and enhance our maintenance department. Supply Velocity, Inc.’s process was methodical, flexible, staff-oriented, inclusive and, above all, trackable.In the last six months, our Chapter has realized expense savings of over $380,000 annually, and significant improvement in intra-company service levels has been attained. Supply Velocity, Inc. will return to the Chapter periodically throughout the next 18 months to audit our newly implemented processes. We have been pleased with our results and Supply Velocity, Inc.’s professionalism.”
“Isolating a problem, finding short, and long term solutions with measurable results is what was promised and results is what was delivered by Supply Velocity. Upon launch of the Lean Six Sigma Selling System, we knew more about our customers, our products, and were able to create a solid plan to increase sales of our most profitable products. Within months of implementation, our booked sales jumped 60% and our most valued customers were getting direct, active, and calculable attention.”
“Supply Velocity gave us the tools to analyze our business and processes based on the facts and numbers versus our perceptions. Our common quote was “Let the numbers lead us”. The key for our organization was how quickly we moved from classroom to actual project initiation. We were able to jump in, start using the tools and see a difference right away.
The get-into-action approach was good for our culture.”
“Closure Medical recently completed a major reorganization in order to enhance our ability to rapidly create innovative medical devices. We hired Supply Velocity to help us map out the process and service flows of the new organization that would maximize our product development process (PDP). In four weeks, Supply Velocity helped us envision a new PDP structure, develop measures and accountability for each step, and gain consensus within the organization. Supply Velocity’s focus on speed and accountability helped us complete a critical project in a timely fashion.”
“In thirty years of hiring consultants, Supply Velocity, Inc. was the first to tell me what they were going to do, set a price they stuck to and substantially exceed my expectations. I have recommended them to friends and acquaintances. They were true partners in assisting with the turnaround of an acquisition we had been struggling with for two years.Their math-based technology, solid down-to-earth facilitation skills, and positive, patient and enthusiastic attitude combined to make our implementation of Lean a very rewarding experience.
We increased our production by 50% in the first month of implementation and continue to see improvements. Improvements have not only been realized in productivity, but also in quality and morale. We have increased profitability by $2M on flat sales of $10M.
Based on Supply Velocity, Inc.’s integrity and our results, I will continue to refer them to others and utilize them in the future as we expand our company through acquisitions.”
“Supply Velocity is driving instrumental change in our inventory management processes. This is critical for us to be competitive in a supply chain environment with numerous disruptions. They are making change happen, which can be challenging in a 182 year old organization.”
“Myerson engaged Supply Velocity, specifically Ray Davis to visit our plant in Trinidad to conduct a two day assessment of our production procedures and provide us feedback on areas for improvement and where applicable, areas for future analysis.Put simply, we got everything we paid for and in addition to more in depth analysis, we got specific tasks that were immediately actionable. Our local management team found Ray to be engaging, highly credible and insightful based on his wide experience. In other words the cultural differences and lack of specific industry knowledge weren’t impediments to things we could implement immediately and on our own. In a nutshell it was money well spent and will pay itself back many times over.”
“I am thrilled to provide this testimonial for Supply Velocity and their outstanding work in implementing Lean Warehouses and processes at Crescent Parts & Equipment through the COVID pandemic. With their data-first focus and Mitch’s exceptional coaching and experience, they transformed our business into a more supply chain-oriented organization, enabling us to grow while prioritizing employee safety and creating a better work environment. Supply Velocity’s expertise in Lean methodologies and their comprehensive evaluation of our customers have been instrumental in optimizing our operations and increasing customer satisfaction. We highly recommend Supply Velocity to any company seeking to implement Lean processes and enhance their supply chain efficiency.”
“Your process encourages this group to work together, better communicate and have fun doing it.”
“Many thanks to all three Supply Velocity presenters. I think you guys took a very difficult time for learning and capitalized on everyone’s time and training needs. I truly hope this helps your business as this was a considerable undertaking on the part of Supply Velocity. Outstanding!!”
“In 2015 we began working with Dr. Mitch Millstein to optimize our inventory locations supporting e-commerce and in-store inventory needs. From this work we developed a new omni-channel warehousing and inventory plan that entirely redefined our approach to warehousing, inventory management, store distribution and fulfillment. As a result of the analyses by Dr. Millstein we have begun the move to an improved omni-channel design by reassigning MSAs to new warehouses, greater leveraging of in-store inventories to satisfy e-commerce demands, and exploring acquisitions of new warehousing space in strategic locations. We have already seen an improvement of $300,000 from both more efficient shipping strategies due to better inventory management.”
“Supply Velocity has provided the technical expertise and political capital to move our project forward. They have just the right amount of push and the right amount of support. Supply Velocity has helped us make real changes to improve efficiencies in logistics without jeopardizing our performance. We’re happy and our customers are happy.”
“Supply Velocity created visibility within our Assurance Services Group… visibility of performance, Client-service, employee satisfaction and processing time. Using the Supply Velocity System, Audit Report Cycle time is down over 50%. We are using his strategies to create greater Client loyalty.”
“We used Supply Velocity to rethink our sales process. By analyzing the entire process we found wasted time in our Sales, Admin and Operations departments. Streamlining this process created extra time for each Sales Rep, allowing them to spend more time with Customers and increase the value we add. Gross profit margins are up 40%!We are now using Supply Velocity to help us rethink our entire Strategic Plan.”
“Supply Velocity’s Lean Six Sigma System has given us new tools to help improve our sales performance. We have learned new ways to analyze our business which makes problem solving more accurate and has made us better leaders.”
“The role of the Erie Insurance Marketing Department has been evolving over the past several years – from a support role to a more critical role of driving growth in our organization. Because of our increased workload and desire to prioritize the most critical projects, we hired Supply Velocity to teach us the skills of Lean Six Sigma.Participants included the Promotions, Market Research and Agency Licensing sections of the Marketing Department.
We learned valuable tools to help us to prioritize based on the voice of the customer.
I firmly believe these skills made a difference in how we work every day. We are moving new projects forward, eliminating or changing ineffective processes, and we are a much stronger department. We continue to use the tools to help us with our highly-complex and time-consuming projects. Supply Velocity helped us to accomplish our goals.”
“For several years we have worked with Supply Velocity to support us with their expertise on Lean Operations and Supply Chain Management. Supply Velocity has helped us implement Lean, improve our inventory systems, and educate our people. They are professionals who are always available to help us as needed.”
“Our experience with Supply Velocity was one of the best values we have ever had from a consulting project. Cyril Narishkin brought a structured lean methodology, invaluable experience and engaging facilitation skills to help us streamline a very complex and disjointed sales order process. Just as importantly, our team now has the knowledge and process competencies to address other business improvement opportunities going forward.”