White Gloves – is this 5S thinking?
We at the Kaizen Institute offer guided Kaizen Lean study tours to Japan each year, to view the best practice in Lean and to see how Japanese organisations including Toyota operate.
These tours have been running for almost 30 years, and are expertly guided by our founder, the original Lean guru, Masaaki Imai. I have been fortunate to attend a number of Lean study tours over the years; however there is nothing that compares to the Japan Study Tour, whereby you can directly observe the origins of Kaizen and Lean Thinking.
During my visits to Japan I have made it a hobby of mine to note and document examples of Lean thinking in everyday life. If you believe that the Japanese culture of Total Quality purely relates to the factories and offices, I assure you there are plenty of examples to see just about everywhere you go.
So, one of the things I have noted over the years is the wearing of white cotton gloves. I have noticed that a variety of Japanese employees have taken to wearing these pristine white gloves, which arguably are part of a uniform or a safety countermeasure, however I am not convinced.
My interest was now piqued, I see gloves on train drivers, bus drivers, cleaners and smartly dressed stewardesses…
Is this another example of 5S thinking?
What is the meaning of the wearing of the white glove? Is this a statement from each employee saying that my workplace is so clean and well maintained I can wear white gloves with no fear of them getting dirty? Is this maybe another personal form of Visual Management, see how white the gloves are, so don’t bother checking my workplace?
I have some photographic evidence from my Gemba observations for your perusal.
I would be interested in your thoughts on this matter. What do you believe wearing white gloves means?
Furthermore I have written to Masaaki Imai for further clarification and I will advise in due course!
Reducing Delays Through Cross-Training
New Zealand's public health system is a double-edged sword. On the one hand universal health care means every New Zealand resident is entitled to free hospital-based medical care so in theory no-one misses out. On the other hand, the processes and resources in the system are not well balanced, frequently leading to delays and procedures being carried out in resource-stressed hospitals where more flexible general practitioners could carry those out instead.
On 6 February 2010 the Christchurch Press carried a story about how one region of New Zealand, covering 10% of the population, had carried out 4,000 procedures to remove skin lesions in general practices rather than in hospitals.
Sixty-four GPs have been trained by plastic surgeons to remove the lesions at their own practices rather than take up specialists' time. The programme is part of the Canterbury District Health Board's focus on care in the community to keep people away from expensive hospital beds. In the past, patients had to be referred to a hospital specialist, which could take up to six months, and then wait many months for an operation.
The queue for specialists is so long that even removal of a simple skin lesion was being substantially delayed leading sometimes to the lesion becoming cancerous, causing needless suffering to the patient and their family and substantially increasing the costs to the health system.
With new training introduced in October 2008, GPs can now perform non-complex operations or refer patients to a GP who has been trained. Dr Graham McGeoch said he was removing up to five skin lesions a week at his Barrington practice in Christchurch.
The training was relatively quick and simple and the procedure in simple cases is also quick so general practices can get through significant numbers of them.
The complex cases [Dr McGeoch] referred for surgery were being seen faster and were referred back to him for checkups rather than having to visit the hospital a second time.
So the benefits list grows - now the complex cases where the delay in being seen by a specialist can be critical were now being handled more successfully as well.
This is a great case of cross-training leading to reduced delays and more effective utilisation of scarce resources in the New Zealand health system.
The same principles apply in all industries. Wherever bottlenecks and queues build up, wherever there are interruptions to flow, there are always ways to improve the process and reduce delay to the customer (patient).
"Is it Really KAIZEN?"
It is interesting reading the various blogs and other media referring to KAIZEN. In the USA in particular, the term is often used with reference to so-called Kaizen events – when a cross-functional team is brought together for say 3-5 days to try to create immediate improvements.
It grates with me every time I hear the term KAIZEN used in this way. The term first arrived in the west courtesy of Masaaki Imai, our chairman at the KAIZEN Institute. It refers to "small changes for the better" and equates to continuous improvement in English.
The terms "KAIZEN event" and "continuous improvement" are contradictions in terms – Kaizen should be practised by everyone, everywhere, everyday, with many small steps adding up over time to dramatic change.
Basing your KAIZEN activities on these events (or blitzes or whatever you want to call them) emphasises fast, large changes. However, likely as not the people involved, let alone the rest of the organisation, will not be focusing on looking for and making improvements everyday – they will wait for the next event before they think of improvements again, hoping they have put the big changes developed in the last event into place by then. As a result the opportunity to drive the culture toward true continuous improvement will likely be missed.
A blitz can work sometimes, but first the organisation needs to have a strong commitment to continuous improvement, a specific problem to be solved, a team with as many of the people likely to be affected by the changes involved as possible and the discipline to use these events sparingly so they don’t become the normal way to do improvement. Only a very few organisations will meet all these criteria.
So what’s it going to be, real KAIZEN or lurching from event to event?
How EBITDA Can Mislead – Anyone for Lean Accounting?
I read with some amusement a post on Thursday 19 November on the Harvard Business Blog. Entitled “How EBITDA Can Mislead”, it demonstrates the rut traditional accounting measurement is in, while allowing the benefits of real value-adding lean accounting measurement to become apparent.
The blog post authors highlight two issues without realising the true implications of what they are saying. The first is that manipulation of numbers for short-term window-dressing purposes has been going on for a long time:
In the mid-nineties when Waste Management was struggling with earnings, they changed their depreciation schedule on their thousands of garbage trucks from 5 years to 8 years. This made profit jump in the current period because less depreciation was charged in the current period. Another example is the airline industry, where depreciation schedules were extended on the 737 to make profits appear better.
So people switched their attention to EBITDA and guess what happened?
When WorldCom started trending toward negative EBITDA, they began to change regular period expenses to assets so they could depreciate them. This removed the expense and increased depreciation, which inflated their EBITDA. This kept the bankers happy and protected WorldCom's stock.
The second issue is that EBITDA still needs to be interpreted in light of other information to give real guidance:
Because EBITDA can be manipulated like this, some analysts argue that a it doesn't truly reflect what is happening in companies. Most now realize that EBITDA must be compared to cash flow to insure that EBITDA does actually convert to cash as expected.
The question I keep asking myself is when will accounting practitioners and analysts alike realise that cash flow and the key drivers of the changes in cash flow are a better indicator of the true health of a business? Anyone who wants a company to be profitable wants it to be so to enable further investment (growth) or dividends (return on investment). Neither of these are possible without cash.
What is the primary measure in lean accounting? I’m sure you won’t be surprised to discover it is cash flow. Lean accounting focuses on an organisation’s value streams and drivers of cash flow within those value streams. Profit follows from generating cash – not the other way around.
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