The Role Of Front-Line Ideas In Lean Performance Improvement

The Role of Front-Line Ideas in Lean Performance Improvement Ideas are integrated into everyday work The emphasis is on small ideas Front-line performance metrics focus ideas onwhat is important Both managers and workers are held accountablefor their roles in the idea processIdeas Are Integrated IntoEveryday WorkIn traditional suggestion systems, ideas are voluntary. Management may welcome them, butemployees are not required, or even expected, to offerthem (recall the participation rate of 9 percent inTable 1). Because high-performance idea systemsbegin with the expectation that every employee cansee many improvement opportunities, these systemsare designed with the capability to process largenumbers of ideas rapidly and efficiently. (Thirteenof the companies in the sample were implementingmore than 50 ideas per employee per year.)Take, for example, the Scania engine assembly plantin Södertälje, just outside of Stockholm, Sweden. EveryWednesday at 8:00 a.m. the production line is stoppedfor 26 minutes so every work team, generally consisting of 9 to 12 people, can hold its weekly improvementmeeting around its idea whiteboard. Team memberscheck the progress of each open idea, remove those thathave been completed, and discuss the new problems andideas that have been posted during the week. To ensureworkers have enough time to implement the improvements, every team has built-in slack; it is deliberately“over staffed” by two positions. If additional resourcesor authority are needed for a specific idea, it is escalatedup to the idea board of the next level of management.If necessary, an idea that needs the highest level ofapproval can move within a week from the team boardto the supervisor group’s board, to the managementgroup’s board, and finally to the plant manager’s board.All boards are public. Top management’s board is inthe middle of the plant where everyone can see the ideasthat it is working on.The weekly process is aimed at improvement activities, but Scania also uses the same boards for daily30 QMJ VOL. 16, no. 4/ 2009, ASQcorrective action of urgent problems. At 8:00 every morning, each team meets around its idea board for eightminutes to discuss the previous day’s performance on theplant’s three key performance indicators: safety, quality,and line stoppage. Performance issues that emerged theprevious day are discussed and, if possible, ideas to correct them are proposed and implemented. If the teamcannot resolve an issue, it is escalated to the next leveland posted on the local supervisor group’s idea board tobe addressed at its 8:15 a.m. meeting. Each supervisorgroup has technicians and additional resources at itsdisposal. If the issue is beyond the scope of this group, itis escalated again, this time to the management group,and it is listed on its board for discussion at its 8:45 a.m.meeting. This group includes plant maintenance andstill more support and authority. If further escalation isstill needed, it is addressed at the 9:30 a.m. top management meeting, which includes the plant manager and allof his direct reports, including plant engineering.According to the company’s CEO, in order to staycompetitive, Scania has to improve productivity bya minimum of 8 to 10 percent each year. In eachof the last two years, the company has increased itsmanufacturing productivity by 15 percent.Emphasis on Small IdeasTraditional suggestion systems focus on getting bigideas with major cost or revenue implications. Butto generate more involvement, increase the rate ofimprovement, and achieve the greatest overall impact,high-performance idea systems target small ideas(Imai 1986; Japan Human Relations Association 1988;Robinson and Schroeder 2006; Tozawa and Bodek2001). Not only can front-line workers come up witha lot of them, but small ideas are easier to implement, face little resistance, and don’t need to go farup the hierarchy for approval. Small ideas can be aroutine part of daily work, and employees can see theirideas making a difference. This creates an invigoratingatmosphere of rapid ongoing improvement.One of the surprising benefits of small ideasis that they create competitive advantage that ismore sustainable (see, for example, Robinsonand Schroeder 2006). While competitors generally

The Role of Front-Line Ideas in Lean Performance Improvementbecome aware of big ideas fairly quickly, and cancopy or counter them, it is much harder for themto find out about small ideas. Because these remaineffectively proprietary, they accumulate over timeinto a cushion of significant competitive advantage.Take Milliken & Company, a U.S.-based textile company, for example, whose idea system has consistentlyaveraged around 100 implemented ideas per personper year. In Milliken Denmark, the managing director showed the authors a number of looms, each ofwhich had several hundred small ideas applied to it,that collectively made them two to three times fasterthan they were designed to operate, and capable ofmaking special weaves that their manufacturers hadthought were impossible. Competitors could easilybuy the same models of loom, but would find it muchmore difficult to come up with all of the ideas thatwould be needed to match this performance.Performance MetricsThat Focus IdeasA standard complaint about suggestion systems isthat the ideas that come in are unfocused and of littlevalue (see, for example, Savageau 1996). If ideas areto be integrated into the daily work, they must be tiedto key companywide improvement goals. The case ofIntroduxi, a large Iberian electronics retail chain—and one of the high-performing companies in theauthors’ sample—illustrates this point.In 2006, the company launched an idea system.The first year’s results met the standard of a highperforming system—the company received 18 ideasper employee, with almost 100 percent participation.The authors were surprised when they met with theCEO to hear he was concerned about the system,because he thought the ideas were scattershot and oflimited value. The authors spent several days in thiscompany studying its idea system. They visited stores,interviewed employees and managers, and examinedthe kinds of ideas the employees had come up with.They found that the company did indeed have awell-designed process. Its problem, however, was thatmanagement had not told the employees what kindsof ideas it wanted.The central warehouse was the one exception.The warehouse manager had translated the company’s strategic goals into lean metrics that hisfront-line workers could understand and that theycould affect directly with their ideas. He came upwith three metrics: Shipments (in euros) per week per employee Percentage of orders shipped correctly and on thesame day Inventory turnoverThese three metrics encompassed the primarygoals of the company for the shipping department:efficiency/productivity, quality/customer satisfaction,and flexibility and innovativeness. (In the electronics and software business, high inventory turnoveris particularly important because of the rapid rate ofproduct obsolescence.)The warehouse manager believed that theseprominently displayed performance measuresplayed an important role in stimulating ideas in hisarea for three reasons. First, they emphasized theaspects of performance that were important. Second,they sensitized employees to problems and opportunities they might otherwise have ignored. Finally,keeping score added a bit of competitiveness andfun. As his workers saw the numbers reflecting theimprovements from their ideas, they felt a sense ofinvolvement and personal achievement.The result of these employee ideas was that injust over a year, the shipping department was ableto double the number of orders it shipped withoutadding any employees. The number of orders filledincorrectly dropped by 90 percent, and inventoryturnover increased 30 percent.Holding People Accountablefor IdeasA number of researchers have observed that traditional suggestion systems have trouble with followthrough and implementation. Generally, thereare large backlogs of unevaluated and unimplemented ideas (Savageau 1996; Fairbank, Spangler,and Williams 2003). This was corroborated by thewww.asq.org 31

The Role of Front-Line Ideas in Lean Performance ImprovementFigure 1 Siemens VDO idea accountability tracking.Idea Performance by Unit5045Ideas/Employee4035“.you do not want to be oneof the executives out here.”Siemens Executive3025201510organizations in the authors’ sample. In those withtraditional suggestion systems, backlogs of 18 monthsor more were common. The reason was that no onewas held accountable for getting, processing, orimplementing ideas.To assure prompt action on ideas, high-performingsystems have strong mechanisms for accountability.Idea performance often is included in annual reviewsand taken into consideration when making decisionsabout pay raises and bonuses.The mechanisms used to hold people accountabledo not need to be complicated. Take, for example,the approach used by Siemens VDO (the global vehicle parts division with almost 100,000 employees,now Continental VDO). The CEO used a very simplechart to track his division managers’ performancein getting ideas. Every month his staff prepared anddistributed a chart (like the one in Figure 1, wherefor illustrative purposes the authors have curtailedthe number of locations and changed their names)showing how many ideas per person each of his 98plants had implemented that month. As one of hisexecutives said, “When the CEO gets this chart, youdo not want to be the executive in charge of one ofthese operations [pointing to the right end, where thepoor performers were].”32 QMJ VOL. 16, no. 4/ 2009, ASQHIGH-PERFORMANCEIDEA SYSTEMS AND LEANPERFORMANCE IMPROVEMENTThe three strongest relationships the authors’ datashowed between high-performing idea systems andlean performance improvement are as follows. Ahigh-performing idea system: Creates a “lean improvement culture” by engagingthe work force in daily improvement activity Taps improvement opportunities that are difficultfor managers to spot Promotes rapid organizational learningCreating a Lean ImprovementCulture by Engaging theWork ForceAs a number of researchers have identified, a common reason lean initiatives perform poorly is thatthey fail to engage the work force in creating a cultureof lean improvement (see, for example, Imai 1997;Liker 2004; Liker and Hoseus 2007; Spear and Bowen 2009, an FranciscoPlantHartfordBonnWarsawPeoriaSt. Korea5

The Role of Front-Line Ideas in Lean Performance ImprovementTable 2 Differences between high- and low-performing lean initiatives.Less successful lean initiatives Successful lean initiativesImprovement is management driven Improvement is front-line drivenThere are limited opportunities for front-line involvement Front-line involvement is primary to improvement activityImprovement activity is results focused Improvement activity is process focused1999). Almost all the company leaders the authorsinterviewed stressed the importance of employeeengagement, and the amount of training they provided to their employees was not a differentiator.But clear differences emerged in the nature andextent of employee involvement. These differencesare summarized in Table 2.Generally, in the less-successful lean initiatives,improvement efforts were management driven. Theyfocused on larger-scale improvement projects —using tools such as kaizen events, ad-hoc task forces,or Six Sigma—intended to generate significant bottom-line results. Ongoing or regular opportunitiesfor front-line people to engage in the improvementprocess were not emphasized. In the more successfullean initiatives, however, generating, processing andimplementing ideas were integrated into the normalwork of front-line workers. The high-performanceidea system was the primary vehicle by which frontline employees drove the lean improvement process.It was this ongoing and regular engagement withdaily problems and opportunities, and the companies’ process-focused approaches (see Choi and Liker1995), that built their lean cultures. The example ofPyromation shows how this happens.In 2002, Pyromation, a medium-sized producerof high-temperature measurement and controldevices located in Fort Wayne, IN, began implementing lean. The company launched the initiative withgreat fanfare, trained its people in the standard leantools (such as 5S, poka-yoke, quick changeover, andvalue-stream mapping), created new work teams, andradically restructured reporting relationships on theproduction floor. But two years later, the lean effortwas still struggling to gain traction. Morale was low.Since all the improvement projects had been dictatedfrom above, the employees felt disconnected fromthe lean effort; indeed, they had become very cynicalabout it. All six production coordinators asked to betransferred to other jobs.Management realized the company couldn’tmake any real progress with lean until the work forcebecame more engaged in the improvement process.After some study and benchmarking, in late 2004,Pyromation decided to integrate problem-identificationand idea-generation into the regular work of frontline employees. Idea boards were set up, supervisorswere trained in idea-meeting facilitation, and weeklyshop-floor idea meetings were scheduled. In this way,front-line workers were given the opportunity to usethe tools and techniques of lean production that theyhad been taught.The resulting stream of improvement ideas madean enormous difference. In two years, productivityincreased by a third, lead-time was cut by 60 percent,and late deliveries were reduced by 70 percent. By 2008,Pyromation was getting an average of 47 implementedideas per person per year. Dan Atkinson, the company’slean coordinator, observed that “the idea system wasthe turning point in our lean effort—it was what wehad been missing all along.”Improvement OpportunitiesThat Are Hard forManagers to SeeManagers deal primarily with information thathas been aggregated — such as “profits aredown,” “market share is dropping,” or “laborwww.asq.org 33 2009, ASQImprovement is done primarily through larger-scale events or projects Small improvements are made on a daily basis

The Role of Front-Line Ideas in Lean Performance Improvementas a percentage of costs is up” (Hayek 1945).Information in this form is helpful in identifyingissues, but not so helpful in dealing with them. But,as Hayek also observed, front-line workers are theones who have specific and detailed knowledge ofhow their organization’s work actually gets done.As such, they are in much better positions than theirmanagers to see many problems and opportunities. They also are in the best positions to developideas that will work to deal with these problemsand opportunities. Consider the example of theCoca-Cola bottling plant in Stockholm, Sweden, thehighest-performing corporate bottling plant in theCoca-Cola system.A few years ago, Coca-Cola headquarters requiredall corporate-owned bottlers to implement Six Sigma.Each plant was expected to: a) train a cadre of Blackand Green Belts; b) focus on Six Sigma improvementprojects that generated large documented monetarysavings; and c) strive for high plant capacity utilization. But unlike its peers, Coca-Cola Stockholmalready had a high-performance idea system inplace. In 2007, the company implemented 15 ideasper person.The implementation of Six Sigma on top of aneffective idea system provided interesting data on therelative impact of both approaches. In 2007, there wereseven Six Sigma projects (both Green and Black Belt),which saved a total of 2.5 million Swedish Kronor (oneU.S. dollar equals about seven Swedish Kronor). Theidea system, however, generated 8 million in savingsfrom a total of 1,720 front-line ideas. In 2008, CocaCola Stockholm increased its emphasis on the ideasystem. As a result, front-line ideas saved 9 millionSwedish Kronor as compared to 1.5 million from SixSigma projects.One example of an idea that illustrated the advantage of the front-line perspective came from a workeron the high-speed, half-liter Coca-Cola bottling line.It solved what had been a tricky problem there. Afterbeing filled and capped, the bottles zoomed arounda 90-degree curve before passing an electronic eyethat scanned each bottle in order to assure it hadbeen properly filled. If not, an air piston would automatically activate and push the defective bottle off34 QMJ VOL. 16, no. 4/ 2009, ASQthe line. As long as the bottles were properly spaced,this process worked quite well. Unfortunately, thebottles often would bunch together as they roundedthe corner. Then, when the air piston pushed a defective bottle aside, the next bottle (now in contact withthe first one) sometimes would be shifted slightly,nick the corner, and tip over and block the line. Tenbottles of Coke per second would then slam into thefallen bottle and fly everywhere, creating a huge messand many defective bottles before the line could bestopped. This disruption to production occurred twoor three times per day.Two Six Sigma Black Belt projects had failedto solve the problem, which was caused by frictionbetween the bottles and the corner guide. The project teams had fiddled with many variables: the linespeed, different kinds of lubricating strips along thecurve guide, the spacing of the bottles — but withlittle success. The problem eventually was solved byan idea from one of the bottling-line workers. Hissimple solution was to reduce the contact surfacearea between the guide and the bottles. By using astandard washer as a spacer in between the guideand its lower mounting bracket, the guide wascocked inward slightly so only its upper edge nowcame in contact with the bottle. In this way, thefriction was lowered enough to keep the bottles frombunching. The idea saved 91,000 kronor per year,not including the costs of damaged product.Over the three-year period that the authors trackedthis plant, it ranked first among Coca-Cola’s corporate-owned bottlers around the world in productivity,quality, safety, environmental performance, and customer fulfillment. The only key metric in which theStockholm bottler did not outperform its peers wasplant capacity utilization. Managers said this wasbecause the large number of front-line improvementideas kept increasing plant capacity.Notice that in 2007, 76 percent of the overallcost savings for Coca-Cola Stockholm came from itsidea system. In 2008, the figure was 86 percent. Fiveother companies in the authors’ sample with highperforming idea systems also measured bottom-lineimprovement by source. Each of these companiesreported similar results — around 80 percent of

The Role of Front-Line Ideas in Lean Performance Improvementoverall improvement came from front-line ideas.While the authors initially were surprised by thesedata, they clearly attest to the extent that front-linepeople see improvement possibilities that their bossesdo not.Ide

“kaizen event” (also known as a “kaizen blitz” or “kaizen burst”). The APICS Dictionary defines a kaizen event as “a rapid improvement of a limited process area, for example, a production cell” (Cox and Blackstone 1999). For many companies, the kaizen