Lean Value Solutions E Book

Lean Value Solutions
Guest was Tom DeForge of
Lean Value Solutions International

Business901 Podcast
Transcript

Tom has an extensive background in helping organizations develop
and implement Lean Manufacturing principles within a variety of
production settings. Tom has served in management positions with
United Technologies, Pratt & Whitney, where he was an operations
Business Unit Manager, and Site Manager responsible for
implementing Lean Manufacturing in both the Supplier base and
Internal Business Units.

Over the past 20 years, Tom has been featured in several articles and
seminars on the subject of Lean Manufacturing implementation. Tom
has also studied Lean Principles in the United States and Japan with
the originators of the Toyota Production System and has facilitated
numerous Improvement workshops in the United States, South
America, Europe, Mexico, Middle East, and Central America.
Tom applies the disciplined approach and analysis tools taught to him during his 8 year
tenure by the Shingijutsu consulting group, who are considered 2nd tier consultants to
the father of The Toyota Production System, Taiichi Ohno .

Lean Value Solutions International (LVSI) is the destination for
organizations seeking results-based partnerships that require
rapid results - whether the assignments are strategic or tactical
in nature. Regardless of the size of your organization, the
fundamental obstacles to implementing a Lean strategy are
fundamentally the same. LVSI provides the expertise and
infrastructure necessary to help you implement strategy and
align culture, processes and execution to achieve a series of
quick results along a roadmap that is focused on achieving
sustainable competitive advantage.

Business901 Product Marketing Lean Marketing

Joe Dager: Thanks everyone for joining us. Participating in the program today is Tom
Deforge, the President of Lean Value Solutions International. Tom has an extensive
background in helping organizations develop and implement Lean manufacturing
principles within a variety of production settings. Tom, could you explain your company to
us and your areas of expertise?

Tom DeForge: Good morning, Joe, and thank you. Our company was started about 14
years ago as a result of several of us being in a Kaizen promotion office under the
tutelage of the Shingijutsu consultant group for about six years. We specialize in Lean
implementation enterprise solutions throughout a global scenario. We've been doing this,
again, not only for the 14 years at our company, but also in our previous life for about 10
years. So, we do the typical Kaizen stuff and the Lean Six Sigma training and certification.
Of course, we're working on our new platform of assessments and monitoring.

Joe: You've been working with the software company for the past two years. Could you
explain that a bit to me? That seems like a big direction, a big thrust for your company
right now.

Tom: One of the things that we've noticed in our approach to Lean is the ability to get
data off the shop floor quickly, cleanly, and with a great degree of accuracy. Back in the
days when the Japanese Sensai would send us to the shop floor, we would go out there,
and we'd see several assets. We'd see these assets running across three shifts. There
were several part numbers there to observe. We were trying to do this, manually. It was
very static in nature. We'd take these observations, go back to our rooms to analyze it
and understanding that 10 minutes later, down on the shop floor, things were changing
rapidly. A few years ago, we got approached by a software company that had a very good
idea relative to capturing that data in a real time setting. It kind of intrigued us because it
solved the problem I just discussed.


So, we entered into two and a half to three year collaboration with them to get the Lean
tools integrated into this system. As we worked through this, what we noticed is that we
were able to set some parameters with that. Such as the workers, giving us that data off
the shop floor in four seconds or less, being able to help customize that feedback data as
well, relative to what they're doing everyday and have it tied into the financial returns.

So that as we make improvements, it shows throughout the entire organization to a
dashboard type scenario, exactly how that impacts the financials. It shows how we
integrate the entire organization into that process. Again, it’s a simple easy-to-hook-up,
easy-to-use feedback mechanism. It takes the continuous improvement group to quicker
and faster action with more integrity. Quite frankly, it shows us where to go and what to
do faster than any manual system that’s out there today.

Joe: There’s a lot of software out there nowadays. Who is really your target market for
something like this?

Tom: Well, we are going after the discreet market, actually, where people are either
running machine tools or doing assembly, those types of things, with the operator. We like
to call it, really, the voice of the operator. You're right, Joe, there are tons of software out
there. The unique thing about our package is that the software is tied to actionable items.
So, therefore, when we install it into our client base, we monitor what the employees are
feeding back to the system. Which helps link us to their continuous improvement office
and their executives, and collectively, together, we form a game plan. Then more,
importantly, our group will go in, in conjunction with the continuous improvement group
of that company. We execute the events relative to what the employees are telling us is
wrong with the process. So, software, in and of itself is, absolutely, nothing unless you
have an executional piece behind it. So, our model really is to collect that data and then
execute on that data so that the needle, from a performance standpoint, moves forward.


Joe: Most lean practices and most lean practitioners will come in and say, "You have to
get next to the operator. You have to listen to what he has to say." Lean software doesn't
play that big of a role at the beginning of implementing Lean tools. Do you agree with
that? I mean, do you implement the software in let’s say, maybe, stage two?

Tom: Actually, it is implemented in stage two. The first stage is understanding the asset
and how to connect into the M codes. Or if it’s an assembly process, how we're going to,
manually, do that. We, truly, believe that the operator input is the king, that’s the way
we've been trained. So, therefore, one of our parameters was that the operator gets
intricately involved in the process. Not only designing the buttons that they push relative
to the problems that are happening on the floor, but also that feedback of a process.

Because think of it, if I'm not on the shop floor, I have a time observation form, I'm
working with one operator, and there are 65 other machines running. Those operators are
looking at us going, "Well, what about me?" With the implementation of this structure, all
65 operators are pushing buttons, giving us feedback relative to their day. Then, that stuff
is being fed back up into a dashboard scenario. From that dashboard scenario, we are
taking those problems and those issues, wracking and stacking them to a parade of
process, essentially, at a high level. Then, going in there and fixing those problems.

So, therefore, instead of having one person on the floor, you're really integrating the
entire company. Using the machine operator’s feedback, which is where it should come
from, in a much faster and more precise way. So, yes, we are, heavily, going to agree
with you that operator, their feedback, and that process feedback is huge. That was one
of our parameters when we sat down to help design this system.


Joe: The person who is observing the software, they are remote from the floor. They're
looking at a dashboard and watch it continuously. Then, an alarm goes off if something’s
happening in the flow. Before it becomes an alarm, is it giving you some on time analysis
to correct problems on the fly?

Tom: It will do that. We've instituted some, what we call, "Alerts and Alarms." As this
process matures on the shop floor, we bolt on these modules, and one of them happens
to be "Alarms and Alerts." So, therefore, you can get real time feedback relative to
parameters that you set within the system. For example, if I know I have an asset, and I
know from an OEE perspective - overall equipment effectiveness - that particular piece
of equipment needs to run at, let’s say, 75% OEE. In order to facilitate the flow to the
process and hits specific financial targets it sets an alarm and a notification option on the
software. If it drops below that, it rings my pager, sends me an email, et cetera. So,
therefore, it monitors and gets the voice of the employees back upstream where it
belongs. It also gives those alarms and alerts that helps us go to that floor quickly and
expediently to fix those problems. So, that module is available on that software.

However, we like to make sure that during the implementation piece...because quite
frankly, it’s a bit of a culture change. We get the operators comfortable; this is not big
brother watching you. We get the continuous improvement team on board with reading
these specific reports and how we take those reports, and we wrack and stack them and
then go to the floor and fix the problems. Then, as this process matures, we bolt on the
alerts and alarms modules and other modules as they get comfortable with the scenario.

Quite frankly, what we're finding is that the operators love it because, again, it ties the
entire organization into seeing what’s actually going on in the process. Typical General
Managers, Presidents, and CEOs, you know, running a company, the phone calls that.


they get. The financials they've got to handle and other things happen around a typical
General Manager’s or President’s day, I know, sometimes they don't have that real close
look at what’s going on. This kind of ties it all together, which is why we love it.

Joe: That was really where my question was leading to is how has it been received by
the operators because, normally, that's what makes or breaks any system.

Tom: Right, you're absolutely right. Operators - and of course, I was once on the shop
floor, I was a machinist. Occasionally, you'd raise your hand and say, "Gee, I really have
a great idea" or "I really have this problem." In the busyness of a production day, a
supervisor - I was one of those, too - I'd say, "It’s OK, I'll get back to you" or "Gee, that’s
really important, but I've got to go over here." Suddenly, all that great feedback from
the floor gets lost. Here, in this system, we capture every idea because it’s got a note
section in it as well. Ideas from the shop floor, from the people doing the work, and we
capture that so it’s no longer a gone or lost thought. Then LVSI and the continuous
improvement group, we meet up, and we execute against those problems and issues on
the floor. So, it’s a very good way to not let good ideas go by the wayside. It’s also a way
by which we capture exact process problems and issues that happen on the floor.

Joe: Is this software available to people on the open market or how would they obtain
it?

Tom: It’s interesting that you ask that. We get approached a lot by several software
companies (and we being training by the Japanese and everything has to be written on a
piece of paper) where we kind of rejected a lot of them. What intrigued us with this
company is that they had, again, a process by which we could tap into the shop floor and
the people who actually do the work, and on occasion, assembly as well.


This is available on the open market, but our model really is a piece of software that’s
no good, unless you take action. So when we developed this, the model is that we come
along with the package. This means we do the installation, we do all the tweaking in,
and we download all the software. And then we work side by side again with the CI
group to facilitate actually doing something on the shop floor in the guise of doing
Kaiser Interventions to fix the problems.

So yes, it is available; you could buy it, I guess, as a stand-alone. But again, without
taking action and not having a group behind it, to take action, it is kind of a risk.

Joe: That’s what I found out in a lot of the different packages of software that I found
on the web - I mean we all have a pile of software sitting behind us, on the shelf. And
some of us have bigger piles than others, me being one of them. It truly is the
implementation of it that is the secret in anything anymore. As much as the Internet has
allowed us to do things and become so proactive and get our hands on so much
information, it still is a people thing.

Tom: Absolutely, and anybody who is going after the Six Sigma piece or the Lean piece
or any continuous improvement piece - you know that the people are the key. Mister
Iwata, who was just a great guy to work with, used to say, "Tom, this isn't more work.
The people are the king." They were great at writing things on flip-charts. And I
remember that he wrote a picture of a hospital in there. And he’s lecturing me and
others. And he drew patients in a hospital bed.

And he said, "This is your process, this is your shop floor. The people on the shop floor
are the patients." And he said, "You in the Kaiser and promotion office and the
engineers that are in the room, maintenance and others, you are the doctors. And when
the patient is sick, the doctors must come or the patient dies."


And I'll never forget that because it’s so true. We're trying to reverse to that through this
implementation of technology, and I hate to use the word, software, because you're
right. It has all those implications.

But through the use of this software, it’s really having the patient tell us what’s wrong.
And it’s the organization’s job to go down and take action to fix those things. And
through this dashboard scenario, it ties everything together, which I think is kind of neat.

It takes away that big black hole or void in between the shop floor and the executive.
And it marries them together so that everyone is on the same page fixing the problem.
The cool thing is it hooks into financial-store-value calculator.

So it takes away that, "Gees, I've been doing this lean for all these years, and what am I
getting back out of it?“ Well, in this system we tied into financial, so we know exactly
what we're getting back out of it. And I think that is a great thing.

Joe: I love to see it when people go through a process such as Lean or Six Sigma, and
they start seeing the measurements. Sometimes, when they realize where the bottleneck
or the problem is and the cost of that to be able to free up the entire system is
astronomical. They're just amazed because they're sitting there, been fighting the
systems and putting more and more in but not really looking at core issues and core
problems. Implementing a system allows you to do that, I think.

Tom: I agree, and quite honestly the involvement of the CFO is critical because you want
to do this to make the business healthy. And in order to make it healthy, you've got to
have an impact on the financials. That’s how you invest in people and equipment and
those kinds of things to assist in moving any organization forward.


So it’s very, very important that we get that process feedback as quickly as possible and
with a high degree of integrity. So over the past couple of years, we made sure that
happened within this package. And again, it’s taking action against those data sets.

Joe: You were part of the PAS Technologies story, along with Bob Weiner when he took
over out there. And I was just really impressed with what happened. You were there at
the ground floor. Could you explain your role in that turnaround?

Tom: Bob Weiner was hired by PAS Technologies to be the CEO. And when Bob Weiner
became the CEO, a week later he called me up, and he said, "I'm ready to implement a
lead enterprise strategy in our company." Because that’s the way Bob works and the way
he thinks. He doesn't wait around to wait or hope for things to happen. So we
immediately launched into a training exercise, getting all the executives together for a
training exercise and Lean enterprise and our approach and strategy; for us to get a feel
for them and the feedback of what’s important to them. From there we launched out into
the middle management training. During that training exercise, we like to use the shop
floor to go out and collect information and data, which we did. And then we got a
strategy out of that, and then we launched into training of the workers on the floor. Once
that was completed, everyone on the same page, everyone understands the language
and the lingo, we then came back and began to work with their internal continuous
improvement group executing events on the shop floor. And because of the executive
leadership and commitment, and the middle management commitment, I might add; and
also the enthusiasm out of the employees on the floor, we were able to put some great
cells into place, which had a huge impact on their turnaround time. In an engine
overhaul, turnaround time is the king. Our goal was to be the best in turnaround of
engine components in the world. So, the employees executed in that regard.


Then we brought it across the entire enterprise. We went out to Ohio, we went to
Ireland, and a couple of other locations that PAS owned and helped them set the
foundation and strategy for lean enterprise and then turned it over to their internal group
to continue the execution process. So, we go in there now as an advisory role. We're
very proud of the things that they've done; what the internal group has been able to do
to carry the Lean enterprise situation forward.

So, we were kind of in there to help set the foundation. Our motto is that we're not there
forever. We want to help train, execute, do what we call "technology transfer" to the
organization and then end up in an advisory role because we know that internalizing the
process is what makes them strong.

Joe: You talk a lot about work cell groups. Is that a real area of expertise for you?

Tom: Yes it is, actually. I can remember when we first started working with this one
group, and they were talking about "cells" and I'm thinking about a red blood cell. What’s
a cell? We quickly learned this notion of standard work after being called a concrete head
about 52 times and being stuck in the old batch and cue method that I learned growing
up through the organization. A cell really is a living and breathing entity. It’s not just a
group of machines put into a horseshoe shaped cell. But yet, it’s a group of machines
putting, or processes, putting into an U-shape configuration. Then you add the people in
there, which gives it the movement, the momentum and also the thinking relative of
getting things to flow.

So, the purpose of a cell really is a team of people dedicated to maximizing the
affectivity and efficiency of not only the work being done, but the effect and efficiency of
the people doing the work as well which is, in the Toyota world, called "standard work.”


So yes, a cell is really, from a manufacturing standpoint, and a production systems
standpoint, a living and breathing entity, in my opinion, made up of people and some
type of assets to be the best and the most efficient way of making something certainly
better than your competition.

Joe: Now, you've been doing this for eleven years as Lean value solutions. What
changes have you seen take place in the Lean Six Sigma mode during that time?

Tom: Well certainly, Six Sigma has come up on the radar scope, and as a combination of
Lean Sick Sigma out in the world today, which is a good thing because, quite honestly, I
look at continuous improvement people, whether you're in the Lean world, Sick Sigma
world - whatever world, that when you are executing, or you're out on the shop floor, or
you're in the middle of some type of process analytics that you need a quiver of tools to
facilitate fixing a problem. These tools can be used at the appropriate times. I see a lot
of people misusing tools and using the wrong tools for the wrong thing or
misunderstanding this notion of "standard work," or whatever. I don't see a lot of
changes. But, I do see something that’s probably not new to anyone where companies
will enter into the first one or two years of Lean implementation and then begin to slide
backwards. That’s always a concern of most of us, and I'm sure you've seen that as well
on how you keep your finger on that pulse.

But, relative to the tools, relative to the philosophy I don't see a lot of change in it.
Although, if you look at Toyota, they say it’s the last principal. It’s never good enough. I
think that’s a very true statement. But, I still see companies that are very good at this as
well, on the other side of the coin that just continued to say, "Hey, you know. I
understand I'm going to take three steps forward and maybe a step backwards. But, it’s


the right thing to do, and I'm going to continue to push". So hopefully, the energy behind
Lean and some of the misnomers behind Lean are no longer there. It's not about
eliminating the jobs. It’s about- certainly about building, not destroying.

Joe: I've seen more of a push of Lean, not being necessarily a cost cutting type venture,
but a way to build quality and build customer base. I look at Lean as being more of a
culture type thing in a continuous improvement; Six Sigma being more of a definition of
going in and fixing a problem. Do you take a similar approach or is yours a little different?

Tom: Well, I think we- I've had that discussion a lot of times with Six Sigma facilitators, and
it's a great discussion that I have because at the end of the day, we're trying to get to the
same place.

I was at a workshop once where someone drew an umbrella on the board and inside the
umbrella they said, anyhow, "this is a Lean enterprise and a Lean enterprise consists of
understanding the philosophy, understanding the tools, understanding the 14 management
principles, and then being able to lead an organization to this culture of change."

And underneath was the Lean tools and happening to be underneath those tools was a Six
Sigma enterprise. And it kind of made sense to me that if you're up here, and you're trying
to lead an organizational Lean enterprise, obviously those principles and those values are
very, very key and those tools to get you there to build that foundation are key as well.

So I kind of look at it like that. I have a Lean enterprise; I've a series of tools. I'm going to
understand the philosophy, I'm going to understand the management principles, and then
I'm going to use these tools underneath, at the appropriate times in order to facilitate
getting that company to where you quite rightly said, to be the best at speed, cost and
quality.


Joe: I think many times people just don't finalize projects. Lot of times, they just wander
on instead of bringing finalities to what they have accomplished. Here is our next
continuous improvement step.

Tom: I can give you two examples that a company that spent over a million-and-a-half
dollars; total productive maintenance is all they did. And then, we followed in behind
them, and they did all these TPM on about, I'd say, about at least 80 assets. We went in
put the cells together and got rid of 50 percent of those assets. There are companies that
focus on 5S. And that’s all they do. They 5S the heck out of everything. It looks beautiful,
but from a financial standpoint, a customer satisfaction standpoint, and throughput
standpoint. It didn't have a big, huge impact on them like they could have gotten out of it
if they followed that roadmap that says I'm going to have a Lean enterprise in an
umbrella, and then follow that roadmap through, by using a combination of all the tools at
the appropriate place and time.

So that’s the way I look at that, and again to get that, to me, to get the biggest benefit of
Lean, you really got to think about how you're going to approach it, and not just use one
tool, but use them all to your advantage.

Joe: Where do you see your company going in the future?

Tom: Well, we really like the model I described earlier, relative to getting that data off the
floor and helping focus more on those Kaizen promotion offices, continuous improvement
offices. We really like the monitoring capability of it because we could move faster and
quicker, and certainly be more expedient and be more -- I guess, be more intelligent
about where we go and where we put our resources. So we're reluctant at first, and after
two and a half years working through that, we see a great opportunity for us to bring this
new concept into the workplace. And I think that’s going to keep us really busy.


The good news is that we, in working with our Japanese Senseis, in my previous life,
which was five years, seven days a week, pretty much 16 or 17 hours a day, those core
concepts of the principles of Lean philosophy are stuck with us, so that we see this
technology piece and this execution piece faster and quicker and cleaner, as they're
being really our future because it could fit into small, medium or large companies. So
we're pretty excited with that. So that probably be or is going to be our next transition.

Joe: It sounds pretty exciting. You have a real separation from other companies, with
the software available, and more importantly, the understanding of the software. Is
there anything you like to add before we finish up here?

Tom: No, I really appreciate the time and the conversation. I love to talk about this
stuff. People will often say to me, "how during this change process did you ever laugh as
long?" and all that stuff. It’s the people that I meet around the globe actually, from all
levels of the organization, to things I get to see on the shop floor. I even, still today
watch that show, "How Things are Made" and I go, "boy that’s like my life." I get to walk
to shop floors and meet people and understand some of their ambitions, some of their
goals, some of their challenges, and to be able to facilitate helping them out either
through tools that we've learned, experiences that we've had, technology that we can
point them to or other things, as a real benefit to what we do.

And we've been kind of blessed, our entire group really, to be able to spend the time
even though we were complaining at the time, to be able to spend the time with the
second tier consultant to Mr. Ono. Again, that’s what drives us every day, is because we
know we can bring value to an organization.


Joe: Where we would someone get a hold of you, Tom?

Tom: Well, we are on the website. Our website is www.lvsillc.com. It may come up to
www.lvsionline.com is another way. Our office number is 860-370-9657 and my
extension is 11. My cell phone 860-836-6427, and give us a call, and we'd be happy to
talk with you about anything we've discussed today.

Joe: OK. Well, I've certainly enjoyed it. I went through your website, and I noticed in
the pictures that the majority of your pictures, there you are in roll-up sleeves on the
shop floor. And looking at this, I thought, "Oh, this guy’s walking the walk. That’s what is
important to him. It’s not so much of how well I look on the website, the picture here, it’s
what I do. I compliment you for including those pictures; I think it’s very important.


Joseph T. Dager
Lean Six Sigma Black Belt

Ph: 260-438-0411 Fax: 260-818-2022
Email: jtdager@business901.com
Web/Blog: http://www.business901.com
Twitter: @business901
What others say:
In the past 20 years, Joe and I have collaborated on many difficult issues. Joe's ability to combine his
expertise with "out of the box" thinking is unsurpassed. He has always delivered quickly, cost
effectively and with ingenuity. A brilliant mind that is always a pleasure to work with." James R.

Joe Dager is President of Business901, a progressive company providing direction in areas
such as Lean Marketing, Product Marketing, Product Launches and Re-Launches. As a Lean
Six Sigma Black Belt and a certified coach of the Duct Tape Marketing organization,
Business901 provides and implements marketing, project and performance planning
methodologies in small businesses. The simplicity of a single flexible model will create
clarity for your staff and as a result better execution. My goal is to allow you spend your
time on the need versus the plan.

An example of how we may work: Business901 could start with a consulting style
utilizing an individual from your organization or a virtual assistance that is well versed in
our principles. We have capabilities to plug virtually any marketing function into your
process immediately. As proficiencies develop, Business901 moves into a coach’s role
supporting the process as needed. The goal of implementing a system is that the processes
will become a habit and not an event. Part of your marketing strategy is to learn and
implement these tools.


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