August 13th, 2011
The process of Lean thinking is an improvement methodology that has now become a global phenomenon. Though initially it started off in the manufacturing process, it has now commonly deployed across other sectors and has helped delivering both organizational efficiencies and customer satisfaction.
The principles and tools of Lean management help create customer value and also help produce goods with lesser defects and better quality, at the same time eliminating the unnecessary 7 wastes and lesser capital. Let us understand how to take these lessons to our warehouse and distribution centers.
FLOW- the primary objective of lean warehousing, contests us to improve the materials flow through the distribution center or warehouse. An ideal situation is where the demand from a customer is responded to immediately and this is the major challenge for any warehouse. This process is called “Pull”.
Creating an optimal warehouse layout is a critical factor in creating material flow, whether inbound or outbound (to customers). The Japanese principles of 5S can be employed for designing the functional areas, inventory, methods of storage and many warehouse processes. It is a very basic tool and relates primarily to housekeeping. But applying these Japanese Principles under macro guidelines, it can be extrapolated to warehouse managements as well. By using these principles, picking routes can be optimized and errors can be minimized. Under Lean warehousing, the main objectives are low inventory, less space, and human efforts. This will lead to less capital, lower operating costs and lesser investments in storage and handling costs. Lean warehousing can lead to lower delivery times and better customer response time.
The spirit of Kaizen must be employed in every organization, which could become the difference between you and your competitors.
August 12th, 2011
The crux of Lean thinking lies in reducing waste and the continual pursuit of quality processes; especially in today’s business environment, where your customers expect the best quality of services and timely delivery, all at affordable costs.
Huge investments in technology, software and tools may not be the only modes that make companies develop superior supply chains. The sphere of lean tools and Kaizen needs to more seriously looked into.
Let us understand Lean Warehousing in detail
“The eradication of waste and the persistent pursuit of productivity and customer service through Kaizen
Muda, the word coined by Japanese, for waste, is currently being used by almost every organization and deals with the elimination of any activity that consumes time and resources without creating any value additions to the process. In short it does not have any effect on the end product or service.
Applying Lean Thinking in the Warehouse
Taichii Ohno, the father of Toyota Production System categorized Muda (waste) into seven different categories. Overproduction, Waiting, Transporting, Inappropriate processing, Inventory, Motion and Defects. In Lean warehousing the challenge lies in identifying each and every activity that consumes time and resource that does not create any additional value. An example of a non-value process in a warehouse could be receiving wrong messages or errors for picking. The process and supply of parts in warehouse could be simpler if such inefficiency could be eliminated. Another major waste in warehouses is poor utilization of space. Every unutilized square foot is money wasted. Also, the parts pickers will have to travel extra or drive past spaces to pick the products they want. This consumes time and erodes productivity.
And last, but not the least is the amount of inventory that is held throughout the value stream. Higher inventory demands more space. For Lean warehousing, all but minimum inventory is described as waste and needs to be eliminated.
August 11th, 2011
The theory of lean distribution is based on the doctrine of lean manufacturing. The ideology of lean manufacturing initially grew out of Toyota’s Production Management approach. It considers that any resource that is used which does not create a value for the end product or the customer is wasteful in nature and is thus a target for elimination.
Understanding from the perspective of a customer who uses the end product or service, it is defined as any process/ action for which a customer would be willing to pay for. In totality, the final goal of lean methodology is to enhance more value of the final product with less work and effort.
In the process of lean distribution, the lean policy starts with the customer order. It applies to tools and techniques that help to streamline and improve material flow, minimize errors, do away with unnecessary material handling, maximizing facility utilization and improving management of inventory.
However, applying the lean methodology in a distribution environment may not be an easy task due to one critical element; variability. In the earlier example of mass production processes, the nature of production is both consistent and repetitive in nature. But distribution operations are almost the opposite, and are highly fluid in nature.
Order quantities from customers differ in size, time sensitivity, product mix and plenty of other factors. Thus the amount of work needed to satisfy these orders have to be customized in nature. This variability generates challenges when lean concepts are applied in distribution. But by following a few steps mentioned below, the challenges involved in lean distribution can be overcome with encouraging results. Following are steps to successfully implementing lean distribution. Following them in true spirit can help a company gain maximum reward:
1) Establish objectives, goals and policies
2) Assessment of current processes.
3) Conduct studies and improve to newer processes
4) Incentivize your employees on any new Kaizen idea they generate in this subject.
August 8th, 2011
Historically, change management is looked at through two predominant perspectives. The first perspective comes from an engineer’s point of view and is focused more on Mechanical Change or on the business process alone. The second looks at the people involved in the change.
Both can be used independent of one another in order to create change in certain areas. In most instances, however, applying the two at once may be the most helpful business strategy
Machines and Processes
This business transition POV is more focused on changing the processes itself. If a machine is outdated and requires upgrades, this will be very helpful. It starts by addressing business issues and making improvements to a process.
Success is measured based on improved performance and increased profit. Statistical metrics are also be used to measure success in this field, this includes an improved rate of production and better utilization of a machine. It takes a direct approach at changing the mechanics and the process, hardly is it going to look at anything else.
Focusing on this is going to help create effective solutions and efficient processes.
This business strategy looks more at how people are affected by change. It starts with looking at the degree of resistance expected and at how much buy in the company will have. The goal is to increase job satisfaction with employees.
Success is measured by looking at a company’s turnover rate and their productivity levels. One of the main concerns here is to help individuals to make sense of the organizational change implemented and what that change means for them. By focusing on this, companies will help have employees who are receptive to changes.
Adhering to the extremes of one side of the other is rarely a successful business strategy. It is then important to take something from each point of view and apply them to the ongoing change.
August 7th, 2011
Change management: Implementing Change
Change management has always been an important part of a business, but the strategies involved have evolved in the past few decades. Personnel empowerment has had a big influence of how change is applied today and it is something that looks like it is going to stay.
Changes used to be implemented without second thought of how employees took to it as it was merely a process that needed to be done. An employee’s opinion was hardly of consequence. As personal empowerment became a reality, this take on change has become ineffective. Today, managing organizational change is not only focused on the actual business processes, but it also looks at employee reaction.
Change management: Empowering the employees
Empowerment has really had a significant effect on how companies saw their employees. No longer are they simple workhorses that performed the necessary tasks. They have become important parts of what a company is and are seen as integral to the success of the organization as a whole.
People have become more aware of their worth to a company. They have started to look after themselves and they have also learned to appreciate their individual and collective value. No longer do they do the bidding of upper management without a thought for personal satisfaction. They have become learned their worth.
Business transformation strategies applied today would be wise to look at how employees take to change. Making the employees comfortable with the change is going to make transition smoother. However, good change leadership involves finding that balance between personnel satisfaction and effective change.
Change management: How to properly implement
Change cannot be just about the employees. There has to be a balance between creating effective processes and employee satisfaction. Doing so is going to help make sure that an organization implements the necessary effective changes while having employees who are receptive and willing to work with them.
August 6th, 2011
The need for change is a recognized one. Companies are aware that in order to survive, they need to be willing and ready for change. However, despite all the talk and all the preparation, many change efforts fail. Why is that?
8 necessary steps to effective Change Management and Change Leadership
John Kotter, author of ‘Leading Change’ has outlined 8 steps that are necessary to effective change management and change leadership. These steps are:
1. Create Urgency – Some of the most successful change efforts have resulted from creating a sense of urgency. This business strategy is going to get people to move. Motivation is always necessary.
2. Create a Group to Implement Change – There has to be a group of people who will be doing the actual work. This group will be responsible for keeping things moving forward. Without this change management group, things could easily fall off track.
3. Have a Vision – A Vision is going to give organizational change some direction. The vision needs to adhere to the SMART categories of goal setting. It is going to be helpful in motivation efforts and it will help keep things aligned.
4. Communicate the Vision – Change agents should communicate their vision for change to their employees, stake holders, and to the other people who will be affected by change. It will create a better understanding and acceptance of the things that are about to happen.
5. Lead to Act on the Vision – There need to be change leaders who will be in charge of leading other people towards acting on the established vision.
Change Leadership for…
7. Keep the Pace Moving – It is important to celebrate small victories, but victory should not be declared too soon as it disrupts momentum. Instead, things have to keep moving forward.
8. Institutionalize Changes – People involved in the change should be shown how things are going. Changes need to be made permanent, if not, they could easily degrade.
Change is going to take time. Skipping steps in an effort to speed things up can result in some disastrous consequences.
August 5th, 2011
Resistance in the Change Management Process
Resistance is normal in the change management process. Persistent resistance however, is going to threaten the success of a project. Change leaders need to manage resistance when they are managing organizational change.
As mentioned, resistance is normal and it is expected since change is a very disruptive and stressful process. Moreover, some degree of skepticism is healthy and it is going to help identify any weakness in the proposed change.
To help change agents manage resistance, here are some of the most common reasons why resistance occurs.
1. Self Interest
2. Low Tolerance
4. Disagreement regarding need for change
There will be some individuals who will only be focused on how change is going to affect them. Low tolerance to change can come from insecurity and it can also result from a different assessment of the situation. Misunderstandings may result from a lack in communication and from not providing enough information. There may also be some disagreements as to whether change is really needed.
“Set realistic change, know when and when not to change, decide, and then be committed to change “
Organizational Change Management
In organizational change management, it is important to look at some of the barriers that can also lead to resistance. They include:
• Power Structures Already in Place
• Failed Previous Change Attempts
• Work Group Resistance
• Loyalty to Existing Processes or Relationships
• Preference of Current Agreements
• Differences in Ambition
• Difficulty With Performing Well in New Situations
Change managers will also find that fear is one of the big reasons for resistance. Employees are in an organization undergoing change most likely afraid of the following:
• The Unknown
• Decrease in Income
• Possible Loss of Job
• Possible Loss of a Position/ Loss of Power
• Loss of Already Acquired or Potentially Acquired Skills
Resistance may also happen as a result inappropriate change management strategies. The most common cause of resistance in this area is failure in explaining the kind of change needed and the reasons for it. A failure to build trust and security coupled by poor relations with employees will also lead to resistance.
March 5th, 2011
Lean leadership is an important practice for any company that wants to be more efficient. It is a targeted form of leadership that is more focused on moving things forward instead of managing every single detail. It is important in change management and in the success of companies who want to implement lean manufacturing.
Here are some tips to help make lean leadership more effective:
Lead and Teach
Many leaders forget the teaching aspect of the role. To become an effective leader, one needs to be able to teach. This is especially necessary when there change is implemented and when there are new techniques and business strategies to be learned. Leaders should not just be experts, instead they should be a resource where employees can go to for assistance.
Find the Middle Ground Between Fear and Comfort
Fear is going to cause a lot of stress and it may even lead to dissent among employees. On the other hand, comfort can lead to decrease in production. Lean leaders must learn to eliminate these two scenarios or at least find the middle ground between them.
Tension and Not Stress
They also need to learn how to build tension instead of stress. Tension will keep things going at a steady or at a faster rate. Stress will slow things down.
Provide Forward Work Instead of Just Tasks
When there is a goal to be met, it is important for a leader to not only delegate a job but also to provide a progressive workload. Have employees move towards a goal. It is also necessary to appraise a team’s performance based on its goals.
In addition to the above, it is also important for a lean leader to be an information conduit instead of being a rigid enforcer of rules. There has to be an open communication between the leader and the people they work with.
March 4th, 2011
Change, even if it’s not met with positive feedback, is necessary. More than a few organizations have gone out of business because they failed to accept change or see the need for it. In the change management process, there will be certain signs that tell business owners when change is necessary, they include:
Increasing Frequency of Service Delays or Project Failures
This is one of the biggest hallmarks that there is a need for business transformation. When an increase in the frequency or service delays and project failures is observed, it is time to take a good look at the business process, pick out the weak points, and do something about it.
Observed Understaffing or Overstaffing
Many companies find themselves understaffed and as a result, they experience a drop in productivity levels and in employee satisfaction. This can lead to a decrease in service and product quality, which leads to losses for the company.
On the flip side, some companies realize that they have more people than they need. This creates waste and an unnecessary allocation of funds. It can also lead to employee dissatisfaction as many feel that they are not being used to their full potential.
Presence of Out of Date Equipment and Machinery
This is a common reason why companies go for organizational change. It is especially true for factories that rely on complex machinery. Technological improvements may require a downsizing in workforce, but it can be necessary to improve production and increase profit.
Once it is determined that change is necessary, it is important to apply proper change management techniques. Doing so will not only make managing organizational change easier, it can also help preserve the relationship between company and its employees.
Markets are continually changing. Demands may rise and fall and from time to time, upgrades and required. It could spell disaster if a company fails to recognize and pay attention to the above signs.
February 20th, 2011
Numerous organizations who have attempted to manage change have failed in the process. There are different factors that account for these failures, including the gap between the vision and the program implementation, the lack of a change management model and necessary supporting tools and skills and failure to consider the impacts of change on all parties involved. Some organizations already fail at the ground level while some fail when they have already gone full swing in the implementation. However, there are always precautionary measures you can take to avoid these pitfalls in managing change. Read More »