Lean Daily Management

Jim is the GM at a $65 million / 225 employees, electronics manufacturing firm in the Southwest (let us call it JR manufacturing). In a recent meeting Jim described everyday life at work.

“At JR Manufacturing, time flies for everyone. The moment I walk in every morning, people come to me with different issues, ask my opinion on how to solve them and you have no idea what kind of issues are waiting for you daily. This is what makes it interesting and exciting. I am a hands-on kind of manager and I do get involved with everyday issues and my people appreciate that.”

Sounds familiar?

In fact, this situation, where the senior and mid-level managers spend majority of their time to put out fires, prevails in more than 90% of the firms in the US. This is “normal” to many in those circumstances.

Let’s take a look at the significant downsides to this style of management.

a) Jim’s recommendations mostly came from prior experience with little in-depth analysis of the current issue or data to back up his decisions. As a result, the managers and shop floor associates don’t bother to find a solution to the issue. They were used to seeing all the decisions coming from Jim. Jim needed to develop new customers and start a new product line. However, he was so busy with everyday issues; the growth of the business was suffering.

b) No one developed skills for root cause and problem solving; everything depends on Jim and two of his supervisors (the benefit of thorough root cause analysis, documentation and communication to standardize did not exist). How effective can a hands-on kind of manager be in this working environment?

c) All major key performance issues (such as customer quality issues and on-time delivery) are published at the end of the month and corrective actions are discussed at that time. Vital metrics are now lagging indicators, and could be changed to leading indicators if JR Manufacturing used Lean Daily Management and Problem Solving Techniques.

Lean Daily Management involves looking at issues on all key performance indicators from the day before, finding the root cause and putting in countermeasures. Issues from the day before are fresh in the minds of all involved and investigation of the problem will be much easier. Management of the issues and root cause analysis takes place where the issues occur.

Let’s look at an example of a visual dash-board display of performance indicators that helps managers to understand the “state of the union,” in a timely manner.

BDC Manufacturing (not a true company-Note: these methods can also be applied in a service environment) has implemented lean daily management to monitor safety, quality, delivery and cost (SQDC, as commonly called in a Lean organization). At every department (engineering, manufacturing, sales) you would find a 5 ft x 8 ft board that displays the results of 5 key performance indicators – the goals and month-to-date performance, results from the day before, pareto of issues, root causes and corrective actions to each issues, year-to- date performance. Each sheet is color coded. Green, means the goals are met and red means goals are not met.

Graphs on daily key performance indicators (KPI’s) charts are prepared with green and red marker pens. As a manager looking at this dash-board, it is clear he/she should spend the time on the most critical issue and try to understand what the root causes are. The visual dash-boards give a prioritization of issues to the management in a 15-second glance.

When the expectations are established by management and employees are expecting questions such as “why did this happened and what are you doing about it,” they will take ownership of the issues and find the solutions. The management is there only to counsel and make sure this process works. The senior management now can focus their attention to strategic issues such as business growth and customer relationship.

An important note, the biggest start-up mistakes to good lean daily management is, a) putting the blame on people, b) people talking about irrelevant issues and prolonging the meeting and c) the managers proposing solutions. It all takes training and discipline.

Next month, we will discuss some good examples of solving problems at the department level. Article written by Mathew Nadakal, a Lean Six Sigma Blackbelt and associate of the Quality Guru.

Quality Guru Asks: What success have you had in your company with Lean Daily Management and what methods do you find work the best?

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