We all know that line from the movie “Jerry Maguire,” where Tom Cruise screams in the phone, “Show me the money! Show me the money!” Whenever you put effort into continuous improvement, at some point you’ll want to shout, “Show me the money!”
As someone who owns manufacturing companies and have been practicing lean for nearly 20 years, I distinctly remember in the early days, making so many improvements, a ton of videos, and multitudes of morning meetings. I felt we were doing everything right. But for some strange reason the financial results weren’t there. Could I be the only one experiencing this phenomenon?
At dinner at a lean summit a few years ago, I was seated beside a wonderful gentleman who ran a kitchen cabinet company. He told me all about improvements they were making around the shop. It sounded really impressive. So, I asked the million-dollar question, “Are you making more money?”
What followed was a series of hems and haws and reasons why the financial results haven’t surfaced yet. I began to make this my first question when I talk to people, I quickly learned that I was not alone. That begs the question: How is it possible to have all your people all making improvements, making their jobs easier, processing things faster but not making more money? If this sounds familiar, don’t worry you’re not alone and there’s a cure for this disease!
First, let’s discuss how to improve the throughput, then the structure of improvement efforts. Here is the ONE AND ONLY way to improve throughput: You must have a positive effect on the bottleneck of your operation.
This word “bottleneck” gets used loosely. Soon as someone sees one area falling a little behind they say, “That’s the bottleneck.” Then tomorrow it moves, and the following day it moves again. The wandering bottleneck syndrome is caused by two factors.
- Not really knowing the real bottleneck
- Labor misallocation
Knowing the real bottleneck is critical to improving throughput. Despite what it may feel like, there is only ONE real bottleneck. Some capacity constraints can rear up now and then and appear as bottlenecks, but don’t be fooled.
The real bottleneck
So, now that we know what has to be done, let’s examine improvement allocation. If you just set your entire team loose on making improvements, then there is no guarantee someone will manage to affect the bottleneck. So, what then?
We all know empowering your team to make their jobs easier is the best way to have happy productive people, but if in the end it doesn’t make a financial difference, what’s the point? Hold that thought, because there is a really good point. First and foremost is the culture shift. You just can’t beat that. You need to think of all their small improvements as preparation for the impending throughput increase when we exploit the real bottleneck!
Now, if everyone is working on their own 2-second improvements, who is working on the bottleneck? It’s the job of the leadership team to direct the company with the five focusing steps:
- Identify the bottleneck
- Exploit the bottleneck
- Subordinate all activity to the bottleneck
- Elevate the bottleneck
Depending on the size of your organization this could be one level up from the shop floor or filter through the ranks down to supervisors and team leads. This is NOT to say you can’t put your production team to work fixing the bottleneck. Absolutely you can. I’m just saying there is typically a little more planning involved. It could be rearranging equipment for better flow, connecting processes, investing in automation or organizing training. The one thing beyond a shadow of a doubt is leadership must know where the bottleneck is, and should constantly be working on a plan to fix it.
On one of my visits to a cabinet door manufacturer, I was sitting with the CEO in his office. There was a sign on the wall, it said, “What am I doing to effect the bottleneck today?” It was a daily priority to take action.
If you want to see some tips and tricks on finding bottlenecks, scan the QR code in this article with your phone camera. I share one particular place bottlenecks hide that can be a bit tricky to find.
As simple as it sounds to just turn everyone loose making improvements — make no mistake this is a critical step you should do — if you want improvements to yield throughput, it takes just a little more planning. This is not to say that some of the 2-second improvements wouldn’t hit the bottleneck and yield gains. I’m more referring to being intentional about throughput improvement.
Look at the graph earlier in this article. It’s a start at who should be doing what, but EVERYONE should be doing 2-second improvements, as well. Remember the #1 rule of lean thinking is there are no rules. Modify, tweak or change as you see fit, and just do what works for you.
My good friend Michael Althoff owns Yellotools in Germany. He says, “Remember 8+1=9 but so does 6+3!”
Metaphorically speaking, “If you want to bake my cookies, use my recipe in the beginning, but as you get better, feel free to change the ingredients to your taste.”
If you think having a lean coach in your back pocket would benefit your organization, it doesn’t have to be a scary or expensive experience. Our mission is “to improve the woodworking industry and the lives working within it.” We have programs to fit any size company on any budget. Together with our friends at Woodworking Network, we can change the world.
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