Drawing Inspiration from the Field
My son, Zach Hehn, Vice President of Business Development at Lean Forward – Continuous Improvement, had a visionary idea to employ sports as an analogy for our inaugural post on LinkedIn. While I initially had reservations about the sports analogy for that particular topic, I must credit him for striking a chord with me regarding the correlation between sports and the discussion surrounding Key Performance Indicators (KPIs) and the Lean Daily Management system. Thank you, Zach, for shedding light on this insightful perspective.
A Sports Spectacle and Business Correlation
Picture strolling into a college football stadium 20 minutes late into a beautiful fall day’s game. As you settle into your seats and absorb the vibrant sea of red, what’s the initial visual check you make? For me, it’s a direct glance at the scoreboard: Is my team leading? What’s the game’s status? What down are we on, and how far from a first down? Finding out we are behind in the game, I might engage with a fellow fan nearby and inquire about our offense—questions like the number of first downs, passing and rushing yards, and even if there have been any turnovers. It’s an instant dive into the pulse of the game.
As I dive into these statistics or KPIs, it makes me ponder the level of concentration the players and coaches must possess. Their focus and attention to detail regarding the game’s intensity must be truly remarkable. Just as statistics are pivotal in a sporting event, shouldn’t every department in your company strive for a similar level of dedication and precision?
From the Field to the Department: A Parallel Perspective
In both sports teams and manufacturing companies, setting targets and keeping Key Performance Indicators (KPIs) for each statistical category is fundamental. This practice serves as a compass, guiding progress toward specific objectives and helping players or departments gauge their performance – whether they’re winning or losing.
Setting these targets establishes benchmarks for improvement, allowing teams to define success in measurable outcomes. Moreover, analyzing KPIs steers training sessions and development programs. For instance, a football offense looking to reduce turnovers uses tracked turnovers and their causes to pinpoint areas for skill enhancement.
Breaking down KPIs by sub-units or departments within sports teams or manufacturing companies provides a focused lens. Let’s consider the defensive side of a sports team, where various units maintain specific KPIs:
Defensive Line: Tracks stats like sacks, tackles for loss, quarterback pressures, and batted passes.
Linebackers: Record tackles, assists, interceptions, and more, showcasing a diverse range of tracked statistics.
Defensive Backs (Cornerbacks and Safeties): Monitor interceptions, tackles, and specific coverage stats to assess performance.
Team Defense: Tracks overall statistics like total tackles, turnovers forced, points allowed, and yards allowed per game, providing a holistic view of defensive performance.
Now, in a manufacturing company’s value stream, sub-units focus on KPIs categorized as Safety, Quality, Delivery, and Cost (S,Q,D,C):
Safety:
Monitoring incident rates, near-misses, and safety training completion ensures a proactive safety culture and identifies potential hazards.
Quality:
From defect rates to customer complaints, tracking quality metrics enables continuous improvement and ensures products meet standards.
Delivery:
On-time delivery, delivery accuracy, and inventory turnover rates ensure timely and accurate deliveries, meeting customer expectations.
Cost:
Tracking production costs, material expenses, and energy consumption helps manage costs and identify areas for efficiency.
Optimizing Performance: Strategies for Effective Capture and Display of KPIs in Manufacturing Units
Visibility of Metrics – Making metrics visible within a manufacturing unit is crucial. It enables all stakeholders to have real-time access to essential performance indicators. Visible metrics create transparency, fostering a shared understanding of goals and progress. When KPIs are prominently displayed, employees can align their efforts with overarching objectives, enhancing accountability and focus on achieving targets.
Lean Forward – Continuous Improvement highly recommends the use of a standardized S,Q,D,C board typically referred to as a “True North” board to capture the following for each metric selected in the areas of Safety, Quality, Delivery, and Cost:
First Row – KPI description, chart, target, and actual value. Showing daily, weekly, and monthly results is a plus!
Second Row – A Pareto chart is a bar graph or a combination of bar and line graphs. It shows the data categories on the x-axis and the number of occurrences, cost, or time on the y-axis. The bars are ordered from highest to lowest frequency, cost, or time from left to right. It is used to analyze the problems or causes by their significance or impact.
Third Row – The 5 Whys template is a simple, yet powerful tool used for root cause analysis. It takes an iterative approach to problem solving. Starting with an initial problem statement, a question beginning with ‘why’ is asked several times in order to zero in on the root cause.
Fourth Row – The Countermeasure Sheet is a form used to track the actions necessary to get a KPI metric or other goal back on track.
Color-coding KPIs based on performance against targets is an effective visual communication method in manufacturing units.
Here’s a breakdown of using colors to signify different performance levels:
Missed Targets: Red is commonly used to indicate missed targets or critical issues. Highlighting KPIs in red draws immediate attention, signaling areas that require urgent attention or improvement. It prompts swift action and intervention to address shortcomings.
Close to a Miss: Yellow or amber shades can signify performance that is close to missing the target. It serves as a warning or cautionary signal, indicating that while performance is not meeting expectations, it’s not severely off-track yet. Yellow prompts proactive measures to prevent the KPI from turning red.
On-Target: Green typically represents KPIs that are on-target or meeting desired objectives. Using green signifies success and encourages maintaining or replicating successful practices. It provides visual affirmation of positive performance.
The use of colors allows for quick comprehension of performance levels without diving into detailed data. It enables immediate identification of areas that need attention and recognition of successful outcomes. This visual representation enhances the efficiency of communication, allowing stakeholders to quickly assess the status of various metrics, enabling prompt decision-making and action.
However, it’s crucial to establish a clear color scheme and standards within the organization to ensure consistent interpretation across different teams or departments. Consistency in color usage helps avoid confusion and ensures everyone understands the meaning behind each color, fostering a shared understanding of performance levels.
It is vitally important that communication occurs within each manufacturing cell that the color red is not a negative. The concept of viewing the color red, particularly in the context of missed targets or mistakes, is a gift or opportunity for learning and improvement and is often attributed to various leadership and management philosophies, including Lean and continuous improvement methodologies.
The idea revolves around reframing failures or shortcomings as valuable learning experiences rather than purely negative outcomes. In this perspective, the color red, indicating a missed target, serves as a signal to stop, assess, and learn. It encourages teams to delve deeper into the root causes of the issue, fostering a culture where mistakes are seen as opportunities for improvement rather than as failures.
Caution Regarding External Visibility: While displaying metrics is essential internally, caution must be exercised when placing metric boards in areas visible to external customers. Exposing sensitive or overly detailed metrics might convey unintended messages or create misunderstandings. Careful curation of displayed information is essential to maintain confidentiality, protect proprietary data, and present an image that aligns with the company’s brand and customer relationships.
Optimizing Performance: Implementing Lean Daily Management (LDM)
Now that we have a central platform for KPI display facilitates collaboration and communication among team members. It becomes a common ground where employees can converge to discuss performance, share insights, and strategize improvements. This platform encourages a culture of continuous improvement by enabling regular discussions centered around actionable data.
LDM draws from Lean principles, emphasizing the elimination of waste, continuous improvement, respect for people, and creating value for customers. It aims to streamline processes, reduce inefficiencies, and foster a culture of continuous improvement. LDM is a process that ensures we engage and empower our employees by including them in developing solutions, standardized methodology for problem solving at the real point of impact, visually understand daily winning or losing from the operator to the General Manager and manages the health of the business daily vs. firefighting.
LDM takes place in a tiered meeting approach.
Tier 1 – Daily Huddle (toolbox huddle)
Location
- Cellular SQDC Boards
Participants
- Supervisor and area team members
Scope
- Previous Day and Current Day
Purpose
- Update and review the board for the team’s previous day performance to goals (actual v. plan).
- Report and discuss if target goals for Safety / Quality / Delivery / Cost were met (green) or missed (red).
- What went well? What went wrong? Document why the target goal was missed; Identify if help is needed.
Agenda (Meeting should last ~10 mins)
- All area team members should attend the huddle.
- Metric owners update their column charts prior to the start of the meeting.
- Metric owner presents the team’s previous day performance to goal; discuss misses and why (red/green)
- Cause(s) for goal misses shall be captured on the Pareto.
- If help is needed, document the issue, and discuss at the Tier 2 meeting.
Tier II – Daily Problem Solving
Location
- Walk about meeting every day at each Cellular True North Board
Participants
- Cell Team Members (rotate), Supervisor, Operations Manager, Support Resources (Quality Assurance, Maintenance, Engineering, OpEx, and Safety)
Scope
- Previous Day Red Metrics
Purpose
- Review the True North Board for the team’s previous day performance to goals (actual vs. plan)
- Escalated support requests to be addressed immediately by support functions.
- Utilize problem solving tools such as fishbone / 5-why combo and Manage by Facts (MBF). Countermeasures created.
- Review progress on existing countermeasure form to ensure completion.
Agenda (Meeting should last ~20-30 mins)
- All participants identified above should attend at the board(s) initially and then move to a meeting room, if necessary, for formal problem solving (due to noise in the area)
- For prioritized KPI miss (burning platform), initiate formal problem-solving utilizing Pareto and any other information (what is the problem, where is it, what is causing it, and how do we solve it)
- Identify short term containment and long-term permanent countermeasures.
- Review of existing countermeasures for progress / completion. If external help is needed, escalate to GM or higher.
Tier III – Weekly Site SQDC “True North” Board Review
Location
- SQDC Board and Selected Areas
Participants
- General Manager, Operations Manager, Support Resources
Scope
- Week in Review
Purpose
To review:
- Winning or losing for the week – immediate response taken.
- Tiered meeting progress and address any deficiencies (PDCA).
- Countermeasures for progress/completion.
- Perform Gemba walk in each area.
- Provide recognition for improvements.
Agenda (Walk about should last ~ 5-7 mins in every cell)
- Each Supervisor should attend their respective boards and areas.
- Team to review metrics off pace with Supervisor and discuss reason(s) why.
- Identify risks to meeting the week’s production plan.
Conclusion Summary:
In the intersection of sports and manufacturing lies a treasure. The analogy between tracking statistics in sports and monitoring Key Performance Indicators (KPIs) in manufacturing illuminates a common pursuit of improvement, strategy, and teamwork.
Just as sports players glimpses at a scoreboard in a sports stadium, teams in manufacturing units rely on KPIs as a visual representation of their performance. This shared focus on metrics becomes a catalyst for improvement, driving a relentless pursuit of excellence.
The integration of Lean Daily Management (LDM) principles into manufacturing operations stands as a testament to this pursuit. By engaging employees at all levels, implementing structured problem-solving methodologies, and leveraging visual management techniques, organizations foster a culture of continuous improvement similarly to the focus, strategy, and teamwork observed in sports.
The adoption of standardized boards, color-coded performance indicators, and the cultivation of a learning culture around ‘red’ indicators all echo the notion that setbacks or missed targets are opportunities for reflection, learning, and growth – a philosophy inherent in both sports and Lean methodologies.
Ultimately, the fusion of sports analogies, Lean principles, and the implementation of methodologies like LDM forms a symbiotic relationship driving organizational success. It empowers teams to constantly aim higher, learn from setbacks, and consistently deliver excellence, mirroring the relentless pursuit of victory witnessed on the sports field.
This convergence, where strategy, statistics, and teamwork converge, becomes the cornerstone for organizational triumph – where lessons from the field enhance the performance in the factory and vice versa, leading to a culture of continuous improvement and sustained success.
Feel free to reach out to Lean Forward – Continuous Improvement for assistance in selecting and implementing KPIs and the LDM process. We’re eager to guide you in embracing the inherent advancements that come with focusing on “the health of the business.” Let’s embark on this journey together!