Applying Lean Six Sigma to Facilities Management

Note:  This is the first installment of a two part series on Lean Six Sigma.

Two Disciplines with Common Goals Combine to Improve Operations and Profitability

More than ever before companies are under pressure to improve operational efficiency and bottom line profitability.  It does not matter if your business is manufacturing, service or knowledge based; all are under the same pressures.  Increasingly companies are turning to Lean Six Sigma as a strategic tool to achieve measurable improvements at the bottom line, reflecting the results of changes made throughout the value chain, including internal processes, suppliers and most importantly customers.  As a facility management professional you have likely been challenged to keep pace and may have wondered if and how these principles can be applied to your organization.  Rest assured that they can be, and that your staff and internal customers are up for the challenge.   As with any Continuous Improvement (CI) program strong leadership and commitment from the top is a requirement.  Your understanding, sponsorship, and support will help launch and sustain the effort.

What is Lean?

The term “Lean” was first used in reference to quality improvement systems when it was applied to the Toyota Production System (TPS) in the nineteen eighties.  Reduced to its basic premise, the system seeks to improve process efficiency and quality by increasing speed and eliminating waste.  Students of TPS will be familiar with the concepts and methodologies of Kaizen, the never ending effort to discover and eliminate all forms of waste in a process.  While originally developed during Japan’s post-WWII recovery to improve manufacturing quality and efficiency it is now routinely applied to all forms of work processes. 

It is a gross mistake, however, to think of Lean as a one-time project or improvement effort.  It is about establishing a new culture that pervades the organization and becomes a part of its very DNA.  It does not happen overnight, but it can (and should) happen more quickly than you might think.  This rapid adoption occurs best where strong leadership and commitment are obvious to all, setting an expectation.  Including Lean participation and results as a part of performance management signals to every worker at every level just how important it is.  Lean should be viewed as a journey.  One that can begin with early results to be sure, but those first positive outcomes should not lead to a declaration of victory and the sure to follow loss of interest.

Remember that the two prime points of focus in Lean are increasing speed and eliminating waste to improve overall quality and value.  To achieve this Lean practitioners take a customer view of every process and outcome, looking to improve customer value in terms defined by the customer.   Value stream mapping will identify areas for rapid waste elimination opportunities while flow management will optimize the sequence of process steps.  Allowing customers to control the pace of production through pull management systems that deliver products and services based on actual consumption need prevents the waste of over production and the transportation and storage activities associated with it. 

Lean’s attention to eliminating waste evaluates all areas of value provision.  Defects such as bad product or service quality and missed deadlines cause rework and increased resource utilization.  Over producing consumes materials and adds time cost as well as transportation and storage.  And lest you be thinking to yourself, “I see how that applies in a manufacturing environment but what effect does it have for my service organization?” think about the costs associated with your service quality shortfalls, the cost of bad information that leads to bad decisions, or the hidden costs of over-provisioning to provide contingencies that may never be required. 

Lean’s three basic components; Quality, Just-In-Time, and Stable Operations often require a different way of thinking about the work of the enterprise.  Where most are focused along functional lines Lean requires a re-focusing to improve efficiencies throughout the value stream.

  

What is Six Sigma?

Six Sigma is essentially a statistical regime that improves process effectiveness by reducing process variability and improving process yield.  It is a collection of various statistical and analysis tools which are used to discover process defects, and a set of methodologies for curing them.  The term “Six Sigma” represents 3.4 defects per one million opportunities.  Compare that to the average manufacturing quality level of three sigma, or 67,000 defects per million, and think about the human, material and opportunity costs associated with the difference between the two.  Not in manufacturing?  Then think about your service processes and the cost of your defects when applied to your corporation’s cost of producing its products or services.  Customers pay that cost and they know who provides the best quality at the best price.  Customers know where the value is.

Interestingly, the Six Sigma “movement,” if one can call it that, began in the eighties when Motorola took on the challenge of reducing product defects as a way of improving market position at about the time Toyota was inventing its Lean processes.  Like Lean, Six Sigma is best thought of as a philosophy and culture that is customer focused, in which the customer defines product or service specifications and the provider meets those needs with optimized efficiency.

The goals of Six Sigma are much the same as those of Lean but it approaches these from a statistical perspective.  Decreasing process complexity, reducing cycle time, and minimizing defects all contribute to increased customer satisfaction and all can be measured, mapped, analyzed and improved. 

All quality improvement programs include improving financial performance as a goal.  Six Sigma, however, uniquely equips an organization owing to its statistical nature and allegiance to empirical data and the scientific method of investigation.  Pre-project scoping analyses of financial benefits allow management to prioritize projects based on expected beneficial outcomes.  Continuing financial analysis during project evolution keeps the team focused on delivering bottom line results by fine tuning the project.  This also provides management a view into the project’s progress as it evolves, thereby improving and speeding intelligence on “ground level” operational developments.  At the same time it informs management the financial analyses educates the team members and allows them to recognize other opportunities for improvement.

Next week:  Combining Lean and Six Sigma, and a shared services implementation case study.

Changing the Education Paradigm

I'm a new fan of RSA Animate.  If you haven't seen their stuff then start with this video.  Compelling, insightful, thought provoking analysis of our broken education system - done in an entertaining and enjoyable fashion.  Brilliant, I say!

Discovering Differences in Doha

For the last week I have been in Doha, Qatar, a return visit from my first eight years ago.  Boy, have things changed.  What was largely a barren peninsula has been transformed into a vibrant, energetic, and beautiful gem by the sea.  Then it was just a few isolated buildings surrounded by flat desert, now parts of Doha look like a new Manhattan.  The contrasts between old and new, between wealth and working class are obvious but the people are uniformly friendly.

West Bay from the Corniche

The architecture in Doha is as varied as you might expect.  As a metaphor for all societies in general, outward appearance is not the whole story and Doha is no different.  Underneath the façade lies a rich and diverse culture that is much different than what I am used to, and in many ways very appealing.  Not necessarily in all ways, however.  I will take LA traffic and drivers any day.   Just sayin.’

Islamic Museum of Art from Dhow Harbor along the Corniche

For those construction folks among you, concrete and CMU are the materials of choice here.  I am not certain why these materials are the standard but suspect a strong combination of familiarity and availability.  Observing multiple construction sites gives one appreciation for advanced technology and equipment.  Looking at the finished product from the 

outside and experiencing it from the inside of the buildings, however, one would never suspect or wonder what is underneath.

Dhow Harbor

Qatari’s are taking good advantage of a unique opportunity.  The growth they are experiencing is multi-dimensional, not just in the built environment.  The government is aggressively funding large infrastructure projects and leap frogging the country with the aid of private investment. Great attention is being paid to the development of institutions that will underpin and sustain the maturation of society on a broad scale.   It is a country of great contrasts but also one of great promise, energy and enthusiasm. 

Even the streetlights look like cranes

There is a lot going on here and it feels a bit like the Old West of American lore at times.  Entrepreneurship is the driving force.  If you’re looking for energy and opportunity it would be hard to find a better place to hitch your horse….or camel.

You can see my other Doha photos here.

How Can You Lead When You Don’t Agree With Your Leader?

Leading can be messy business.  It has its rewards but challenges are never in short supply it seems.  Partly I think leading is complicated because it is relationship based and relationships are always in flux. It is easy when the person you look to for leadership is aligned perfectly with you and the same is true of your relationship with those you lead.  But that doesn’t happen very often.  In a large sense, successful leadership is defined in our ability to be effective in spite of these mis-alignments.  Yes, one of a leader’s most important functions is to improve alignment, but when alignment is a goal and not the reality a leader and those he or she leads must still be effective.

Understanding the other person’s perspective is a key for me when I am in this misaligned state.  To understand I must listen, pay attention, synthesize, evaluate and reach conclusions on why the other person has the perspective they do, its validity and importantly its motivation. 

An interesting thing happens here.  I cannot understand without information.  In order to get the information I need to ask open questions and listen honestly.  I must probe to find out what the other leader believes, why he or she believes it, what experiences or data has led them in this particular direction, and I must be willing to accept that they may be correct.  I must engage our relationship in open dialogue which in turn engenders mutual respect, transparency, and trust.  In the end I may not necessarily agree with their conclusions or they with mine, but if I can understand their process and reasoning I can make an informed decision to support them anyway or continue the dialogue to press my perspective. 

It’s that relationship thing again.  By nurturing it through rough spots I help strengthen it.  By abandoning the effort I weaken it.  By leaving it I lose my voice.

This is not an unimportant point.  People sometimes flee positions because of misalignment conflict, robbing themselves of an opportunity to contribute and mature.  These are conditions that will be repeated often throughout a career.  Fleeing such a situation now does nothing to prepare you for the next.

The value of visible conflict resolution should not be underestimated in its effect on others.  When these types of leadership conflicts exist in organizations it makes people nervous.  There will probably those who are aligned with each side for a variety of reasons, but everyone will know that the leadership tension exists, and that will make people nervous.  Some may even begin postulating negative repercussions of the conflict and then begin to act on those concerns, creating another set of issues that must be overcome.  But, just as everyone will know there is a conflict among leadership they will also know how it is being processed.  They will see when you are honestly looking for ways to make it work, and that fact alone will build their trust in your leadership.  Why?  Because they will see that you take it seriously, are willing to listen and learn, and that you conduct yourself respectfully – all traits that people value in leaders.

Asking yourself what you need to learn about a particular conflict is possibly the most important step when beginning to face a conflict in leadership.  This internal question sets the tone for how you will engage the other leader.  Often you will find that the most important things you have to learn are about yourself.  What is this situation trying to teach me?  What deficiencies do I have in dealing with this situation and how can I improve them?  How can I approach the other leader in a way that encourages transparency?  What is my responsibility to those I lead and the larger organization in this circumstance?  What is really at stake here?  All of these are important questions to ask as you begin to seek information that will contribute to resolution.

Leading really is a relationship thing.  Paying attention to your relationship with other leaders should be a purposed and principled behavior.  Expecting that you will be in perfect alignment with them at all times is not reasonable.  Seeking to fairly understand, communicating and leading effectively as you work to resolve misalignment issues is absolutely expected of you – by those you lead, other leaders, and I hope by you.

Why Philosophy in Prison Matters

Can you be wrong about "Wrong?"  Listen as Damon Horowitz describes an unlikely encounter in an unlikely place.  Inspiring and challenging.