“gemba walk” (lean thinking term) to go to the actual place where value is added + “walkabout” (Australian aborigine) a short period of wandering bush life engaged as an occasional interruption of regular work

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Operational excellence cannot be achieved through top-down directives or piecemeal implementation of tools.  Something more is required.  The Shingo Model for Operational Excellence appears to be one of the best approaches available.  It has two elements: 1) the “house” (the principles, the “what”), and 2) the “diamond” (the transformational element, which is the method - the “how”).  The “who” is everyone, beginning with top management.  Achieving operational excellence requires a widespread commitment throughout the organization to execute according to the principles of operational excellence.  I’m going to describe my understanding of the 10 guiding principles (described in the house element) two at a time and also describe how top management might use these to transform culture using the diamond element of the model.

Last time, I discussed the two principles at the base of the house element -  Focus on Process and Embrace Scientific Thinking.  This time I will describe “Flow & Pull Value” and “Assure Quality at the Source”.

Flow & Pull Value

Flow thinking is the focus on shortening lead-time from the beginning of the value stream to the end of the value stream, and on removing all barriers (waste) that impeded the creation of value and its delivery to the customer.  Flow is the best drive to make processes faster, easier, cheaper and better.  Other potential drivers such as unit cost or process variability are too narrowly focused, distorting priorities and delivering suboptimal results.  A cost focus is particularly dangerous, when it creates perverse incentives and budget manipulations incidental to actual improvement.  

An example of the problem with “focus cost” rather than “flow” can be found in some of the previous work I found myself involved in with my last employer.  The thinking seemed to follow this line of logic: Based on some traditional cost account work (basically reviewing an organization’s income and expense statement) the finance department determined that the #1 cost item in the hospital (or clinic) was “labor expense”.  So, using analytic thinking (breaking the problem into parts) it is easy to find out which departments contributed to the highest labor costs.  The next step was to calculate a ratio (labor cost/unit of service), then find out how this ratio compared to other “like” organizations (what has become known as benchmarking).  This then led to pointing out how far each department’s ratio was from the benchmark.  Actually, “pointing out” was the first step.  What really happened is pressure to reduced the number, get it closer to the desired target. The goal became get better numbers - by department - (and by any method possible).  Brian Joiner once pointed out that if people are asked to produce better numbers they have 3 choices: 1) manipulate the data, 2) manipulate the system (sub-optimize the system, or 3) improve the system which drives the results.  In my experience, we see far too much emphasis on #1 & 2.  By thinking about flow and reducing the barriers that impede flow, we are working on strategy #3 - improve the system.

Pull is the concept of matching the rate of production to the level of demand, the goal in any environment.  Yet pull is not feasible or cost-effective without the flexibility and short lead times that result from flow.

I’ve not seen the concept of “pull” widely understood and applied in healthcare.  ”Push” is a much more common approach.  For example, how do we typically operate our clinics, or our operating rooms?  There is an appointment time and the patient (typically arrives early - sometimes way early - and waits.  So we have a queue that develops (thus waiting rooms) where we create an inventory of “work in process” (non-value-added activity.  The result is a push to get the patients in to see the doctor, have the procedure, etc. What would “pull” look like?  Have the patient arrive just in enough time to be pulled to the next step quickly, with less (or no) waiting.  Each step pulls one patient from the previous step in a continuos flow manner.  No need for waiting rooms.  The result is better value to the patient, better use of everyone’s time and one outcome is lower total cost.

Flow and pull create enormous positive benefits in all aspects of any business.  Focusing on flow will lead to improvements including: better safety and morale, more consistent quality with fewer defects, increases in on-time delivery and flexibility, and lower costs, without running into the traditional trade-offs.  In addition, daily and weekly results become more consistent and predictable. 

Assure Quality at the Source

Assuring quality at the source is the combination of three principles:1) do not pass defects forward, 2) stop and fix problems, and 3) respect the individual in the process.  Defects are a source of instability and waste, so assuring quality at the source requires the establishment of processes for recognizing errors in the process itself.  Organizations must commit to stopping and fixing processes that are creating defects, rather than keeping product or services moving while planning to fix the issue later.  Proper use of the human element in the process for thinking, analysis, problem solving, and countermeasures is vital to continuous improvement. 

I see principle violated every day, and I’ve violated it myself - sometimes on purpose - so that we can all learn and work harder to apply the principle every day.  Here’s an example.  We were planning for one of the first shingo-based assessments that we offer for HVN members.  A critical first step is the preparation of a self-assessment document that the trained assessors use for baseline information.  The typical document is 30-50 pages which provides some details about the systems and activities that the organization has in place.  When I received the self-assessment document from one of our member organizations, it was 2 pages.  Clearly not enough and clearly a defect that I did not want to pass forward.  In hindsight, I could have “pulled the andon cord” and stopped the process.  But I didn’t and we all learned about the importance of a thorough self-assessment document.  On a going forward basis, I do not allow a sub-par self assessment document to proceed forward.

Supporting Principles

There are eight supporting principles related to these two guiding principles, some more strongly than others:
Stabilize processes - First, identify and remove causes of special cause variation.  Stability is a prerequisite for improvement, providing a basis for problem identification and continuous improvement.
Rely on data -  Dr. Shingo emphasized the importance of being data-driven in the pursuit of continuous improvement.
Standardize processes -  Standardization is the supporting principle behind maintaining improvement, rather than springing back to preceding practices and results.
Insist on direct observation -  ”Going to see” is the first step of the scientific method.
Focus on value stream -  Clearly understanding the value stream is the only way to improve the value delivered.
Keep in simple & visual -  Making information visual is the supporting principle that when combined with simplification solves the information defects, which are often the causes of waste.
Identify and eliminate waste -  This principle effectively engages the entire organization in the continuous improvement effort.
Integrate improvement with work -  Every employee becomes a scientist with capability to continually assess the current state of processes and improve. 

How does this relate to the “how”? - the Diamond Element

I’ll trace my understanding of how this works to affect and transform the culture in an organization.  When individual leaders (top management) in an organization think in terms of the guiding principles of “flow & pull value” and “assure quality at the source”, they will design systems that are far different than managers who are not guided by these principles.  For instance, .

The tools they would select would be used to enable the systems they designed which, in turn would drive an organizational focus on the principles.  The tools would be used to achieve results (such as ), and the results would be used to refine how the tools would be used - Plan, Do, Study, Act.  The results that are achieved would affirm the guiding principles, which would drive a focus on the results.

Over time and through the application of the guiding principles, the culture will change to one that achieves operational excellence.  Culture is the sum of the behaviors that are exhibited in the organization (from the board room to the patient bedside).  Two things drive behaviors: 1) systems and 2) what is measured.

Here’s another example.  

Guiding principles are universal truths.  They are like the laws of physics, like gravity.  They govern the consequences of those who understand them and of those who do not.  Managers who do not follow the principles of “flow & pull value” and “embrace scientific thinking” and “assure quality at the source” get and the culture they design - intentionally or unintentionally.  For instance, .  The culture they have (exhibited by the behaviors they see) is a direct result of the systems that they designed (or allowed to prevail) which are a direct result of the principles they use.

If management wants better culture and better results, they need to understand and apply the guiding principles of “flow & pull value” and “assure quality at the source”.  It’s that simple, and that hard.  To understand and apply these guiding principles means letting go of practices in the past.  Letting go of the incorrect notions we have been taught in management schools, by well-meaning managers who came before us (who were only doing their best) is what I believe Dr. Deming meant when he described the “transformation of management”.

In his 1993 book, The New Economics for Industry, Government and Education, Dr. Deming writes, “Once the individual understands the system of profound knowledge, he will apply its principles in every kind of relationship with other people.  He will have a basis for judgement of his own decisions and for transformation of the organizations that he belongs to.  The individual, once transformed, will: set an example; be a good listener, but will not compromise; continually teach other people; and help people to pull away from their current practices and beliefs and move into the new philosophy without a feeling of guilt about the past.”