Visual Management

Visual management means to direct or administer using methods of instructions involving the sense of sight.  Consider the popular sport of baseball. Why do avid fans glance repeatedly at the scoreboard when the action is clearly on the field? The scoreboard answers important questions about the status of the game. It tells us how our team is doing in relation to the goal (to win the game!)

What is being measured? What does it mean to win? What do we need to do to win? Are we winning? Do we even have a chance? How many runs do we need?

The scoreboard also provides real-time information about other important game parameters:

What inning is it? What is the count? Was that a ball or a strike? How many outs? How many hits? How many errors?

The scoreboard generates and maintains interest. It provided unambiguous feedback about performance. It presents the same information to everyone, whether owner, manager, player, or spectator. Most importantly, it keeps us focused on the measures that are important and lets us know what must be done to win the game.

By analogy, true visual management shares real-time information about the status of a factory:

What are our goals? What are our key measures? How is the factory performing in relation to those goals? What is preventing us from reaching our goals? Most importantly, how does my individual effort contribute toward success.

Imagine a game - baseball, football , whatever - where no one knows the score. Scoring defines what it means to win. It tells players how the team is doing and how their individual efforts contribute to its success. It tells the team or individual what they need to do to win.

Visual management is the company-wide “nervous system” enabling all employees to understand how they affect the factory’s performance.

Using simple visual signals that provide an immediate understanding of a situation or condition will clearly define the normal or desired condition and expose the abnormal undesired condition.

Visual signals are efficient, self regulating, and worker managed.   They can be Signals, Floor markings, Codes, Supply Replenishment Cards, Supermarkets, Measurements, Performance Metrics, Color Coding, and/or Labels / Signs. 

You know you have been successful using visual signals when anyone can walk into a workplace and visually understand the current situation (self-explaining), understand the work process (self-ordering), know if you are ahead, behind, or on schedule (self-regulating), and see when there is an abnormality (self-improving). 

Here are some examples:

Remember to manage from the floor, not from your desk!  Keep it simple and keep it visual, and continuously improve!

Lean Engineering Event

Within the past year, many companies have experienced an industry downturn; however, the opportunity to work on new programs and the engineering effort that goes with them has never been higher.  The decision was made to hold a lean engineering event with the intention of removing waste from the design process.  The team was assembled and consisted of multi-disciplined team members heavily involved in the new product design and development process. 

It was explained that we didn't just want to change the development process and have a theoretical outcome, but we should also try the process on a real product.  At that point we broke the team into 2 teams with one focused on improving the process and the other focused on a new product.

This new product we determined to work on had volume potential up to 10,000/year, however the price target was under $300.  A similar product currently sold for over $1200 a piece.  We had just notified the customer that delivery of the initial prototype for the new product would be in 6 months.  We did not know if we could achieve the cost target.  The team went to work starting with a phone call to the customer (who was pleasantly shocked to learn that a team was now focused on his project).  A schedule with responsibilities for the week was established, a supplier was brought in to meet with the team, and in 3 days the team had great success. 

The design was completed in a cross-functional environment, with open communication and out of the box input from team members, especially those who were not experienced with this particular product line.  The cost of the product was reduced from $1200 to $190 with firm supplier quotes leaving us with good margin at $300.  Best of all, a schedule with clear accountability was established (see post on Gantt Charts) to deliver initial units to the customer within 2 months.  The customer was very excited and after the initial units were successful, he received an additional customer order for over 750 systems.  Many of the cost savings ideas were implemented on the similar product selling at $1200 allowing us to take at least $200 of cost out for an annual savings of $100,000.

The second team also completed their project of improving the design process.  Improvements centered around utilizing focused multi-disciplined teams working in a very defined timeframe to accomplish the design.  The concept of freeze gates was implemented to eliminate mistakes and back tracking.  To be successful at focusing effort, a better system for establishing product line priorities is also being implemented.

Both teams agreed that a focused burst of effort was significantly faster that the current way of designing product and the initial open communications allow s the team to really optimize the design for cost & quality.

Eliminate the Eight Wastes!

Understanding “Waste” is an integral step to your lean journey.  Some have 7 wastes, however, I teach 8 wastes.  I remember them by the acronym “DOWNTIME.” 

The first waste is “DEFECTS.”  Defects include making bad parts, scrap, and/or doing rework.  Causes include a lack of in-process checks, incapable equipment, poor quality materials, poor product design, inadequate training, or poor work instructions.  Each time a defect is passed onto the next process, it takes 10x more money to solve the defect.   

The second waste is “OVERPRODUCTION.”  Overproductions means making more products than the next process (the customer) needs.  Causes include just-in-case thinking, misuse of automation, long set-up times, inadequate forecasting, & keeping busy. 

The third waste is “WAITING.”  Waiting includes idle time created when waiting for materials, machines, inspection, & information.  Causes include an unbalanced work load, equipment breakdown, upstream quality problems, & imbalances in scheduling.  Waiting is very difficult for everyone!  William Feather said, “The hardest job of all is trying to look busy when you’re not.”

The fourth waste is “NON-UTILIZATION OF TALENT.”  It is no secret that some people are talented in certain areas where others may not be as talented.  If we ignore this basic truth, we are creating waste.  As managers, we must discover talents, with persistence develop it to the extent leading to perfection and dedicate it for best use within our facilities.

The fifth waste is “TRANSPORTATION.”  Excessive Transportation includes the movement of product and materials from place to place.  Causes include poor plant layout, large batch sizes production, & storage.

The sixth waste is “INVENTORY.”  Unnecessary Inventory will include any inventory other than what is needed right now to satisfy the customer is considered waste.  Causes include making extra in case of scrap, reward based on output only, scheduling not leveled, poor market forecast, & supplier problems. 

The seventh waste is “MOTION.”  Unnecessary Motion means any movement of people that does not add value to the product or service.  Causes include poorly designed process, lack of standard work methods, poor work area design, & disorganization and clutter.  A good rule is to eliminate the “Ugly INGs.” These include: Searching, Lifting, Bending, Choosing, Carrying, Arranging, Walking, Stretching, Reaching, etc. 

Finally, the eighth waste is “EXCESSIVE PROCESSING.”  Inappropriate Processing is the effort that adds no value to the product from the customers’ viewpoint.  Causes include customer requirements being unclear, overcomplicated paperwork, lack of communication, & redundant steps.  The Process itself is Waste! Peter Drucker wrote, “There is nothing so useless as doing efficiently that which should not be done at all.”

Now go out into your facility and take a “WASTE WALK.”  Don’t forget to have fun!