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ANNALISA WEIGEL: So let's start with--
HUGH MCMANUS: I'm Hugh McManus, the co-creator
of the lean enterprise value simulation.
I'm going to talk a little bit about teaching lean thinking
principles through hands on learning
with particular reference to what we do in the Lean Academy.
Credited here are Eric Rebentisch Tisch,
my co-creator in the lean enterprise value simulation.
And Earl and Alexis, who were key in integrating
the lean enterprise value simulation, part of it,
into the Lean Academy.
The reason we use simulation-based education
for this is that teaching lean is is a difficult challenge.
A great deal of that is because it's experience-based
and it depends on a context, the context of existing
industrial and engineering processes
that are not familiar to students.
So we really need to give them something
to think about and work with before a lot of these ideas
start to make real sense to them.
So we use simulation-based education
to increase comprehension.
To allow them to put the ideas together
in a more holistic, way not just bits
and pieces of technical knowledge,
but how does it all work together?
And of course learning through experience, getting a tactile
feel for the material.
Final thing for an intensive event like the Lean Academy
is also just to get the energy rubbed off.
To give them something to do.
To get their blood pressure up a little bit.
To keep them awake and excited and involved in the class.
The simulation is built around attempting
to build LEGO airplanes that are actually relatively poorly
designed LEGO airplanes, if the criteria for a LEGO airplane
is that it's relatively easy to put together
and it stays together once you put it there.
This is not a very good airplane.
And it's built in a very unlean way.
It's built in a legacy system which
has an unbalanced production system with bottlenecks
and other problems.
A long supply chain.
A long and uncoordinated supply chain.
The LEGOs actually come from someplace else.
They have to be transported to the table where
the airplanes are built. And there's a lot of paperwork
and communications issues in both getting the plane built.
And then at the end of each round,
doing the accounting necessary to figure out
whether you actually made money or not from the airplane.
The system used in the Lean Academy is moderately simple.
We have four manufacturing plants
that build tails, fuselages, wings, and final assembly
to deliver an airplane to the customer.
We have a supplier quality representative
who interacts with a supply chain consisting
of a single dedicated supplier, but in a different place.
At a table where the suppliers sit.
So there's a flow of information between these people.
And hopefully that creates a flow of parts,
of subassemblies in parts, that result
in some value being delivered in aircraft being delivered
to the customer.
The simulation it's not just a matter
of building LEGO airplanes.
It's actually a fairly rigidly defined simulation
that has a number of features.
For one thing, each student what they're allowed to do
is represented visually like this.
Each student is set is told, take these pieces
and build that assembly.
This both defines what they need to do visually
so it's fairly easy to understand and it's changeable.
Very important.
This is a rather difficult assembly to put together.
If the students wish to change it,
they can in an organized way.
The processes that they do are also
constrained by hourglasses.
It's not a dexterity contest.
It's not a race.
It's a process.
And this process is at many steps constrained
by the pace of some hourglasses in particular, the assembly
operations.
Depending on the part count, hourglasses
with different times are used to represent the actual factory
operations that are happening.
That are simulated by the simulation.
It's not just a matter of the student's dexterity.
And so this becomes a constraint that the students
have to work with and design solutions around.
There's a fairly long paperwork chain and it's fairly clumsy.
It's not that hard to learn but it turns out
it's not that easy to use.
Standard paper order form here.
You could think of that even as a web
form in the modern economy.
But you're just saying, I want this many of this part,
handing it off to your supplier quality representative, who
then hands it to the supplier who has to fill it.
And then they have to fill out essentially an invoice sheet
that they send back to you.
That means that every transaction with LEGOs
involves two pieces of paper and 1, 2, 3, 4 steps just
to get your parts to build.
Not a very good system but not atypical of the real world.
And finally there's an accounting system
for Lean Academy.
It's a cash flow system that tracks all the costs involved.
A fixed costs.
How much does it cost to keep your plants open?
The variable cost.
How much do those parts cost?
What does it cost to do various things?
And you can figure out whether you're making money or not.
Often you're not.
And if you don't get out enough airplanes,
you don't make any money.
Or if you do things in a wasteful way,
if you waste parts, you won't make any money.
ANNALISA WEIGEL: All right everybody.
Let's check in.
I'd like to find out how many planes each table built.
Let's start here.
One plane.
AUDIENCE: One.
ANNALISA WEIGEL: One plane?
Two planes.
One plane.
All right.
Who's making money?
AUDIENCE: No one.
ANNALISA WEIGEL: Let me ask a question.
Is anybody's manufacturing operations making money yet?
No.
OK.
Tell me how much money the supplier
is making whose profitable?
AUDIENCE: 14.
ANNALISA WEIGEL: 14.
OK.
So you're barely profitable.
That's better than being negative.
All right.
So the supplier might be doing well in that enterprise,
but it might be at the expense of the manufacturing portion.
So this is something that you're going
to think about as you go through your simulation.
HUGH MCMANUS: So in the Lean Academy
we dedicate one day to the simulation, about 2/3
of the teaching time in that day.
There's some lectures interspersed.
It happens in 12 minute active rounds--
there's 12 minutes of frenzy.
Followed by on-- preceded by in many cases, time
for reflection, planning, financial analysis,
and so forth.
And these are separated up into basically learning
how to do the simulation, getting past the learning
curve.
Understanding how lean process improvements can
be used to take a legacy state and make it lean and make it
work better.
And then a final round where the manufacturing suppliers
and also a not simulated, but conceptual engineering process,
is used to achieve enterprise lean by redesigning
the airplane, tuning the supply chain to a really high state,
and seeing what you can do in an almost ideal state.
ANNALISA WEIGEL: This is a common tool around the industry
to go and look at other facilities
and benchmark yourselves not only with respect to companies
that do the same thing as you do, but also to benchmark
yourself against companies that do other things
but have similar processes to you.
So there's a lot to learn by going and walking
around and seeing this.
And from what I took away from the tables,
I think we've got two different build-to philosophies going on.
So you'll notice there are two kinds
of build-to packages going on.
Just take a look at that and see what
cause somebody else to think differently than what you did.
I also wanted you guys to notice this table here.
Because I saw you guys.
You flipped your bins upside down when
you are ready for a new ones.
That was your signals?
AUDIENCE: This wasn't, we don't want anymore.
This is, we do.
ANNALISA WEIGEL: And that's you do want more.
So I saw that and I thought that was an interesting practice.
Anybody else have a practice that worked well
for them that might not come out when you're
doing your table tours and just looking at the static display?
AUDIENCE: The clock [INAUDIBLE].
AUDIENCE: We used one timer for all four of us.
AUDIENCE: Oh no.
[INTERPOSING VOICES]
AUDIENCE: No.
Then we're all synchronized.
We're all--
[INTERPOSING VOICES]
ANNALISA WEIGEL: So there's a best practice that you
might consider adopting.
Did we have a comment from this team here?
AUDIENCE: Yeah.
We color coded our bins and then color
coded our standard order sheets so
that she would be able to identify more quickly.
ANNALISA WEIGEL: OK, so did everybody hear that?
There's color coding of bins and color
coding of the different standard orders
to try to match visual inspection
and get quality good.
AUDIENCE: We also color coded.
So the red bin goes here.
[INAUDIBLE]
ANNALISA WEIGEL: So they have three marks of color
to try to get that all coordinated.
Other best practices that won't come out again
if you're just looking around?
AUDIENCE: Yes, we did a continuous delivery cycles up
until we're done.
Because we noticed that there was variability on how long
it took to fill the bin.
[INAUDIBLE]
ALLEN HAGGERTY: The Lean Aerospace Initiative,
which funded all this stuff years ago,
is the consortium of all the aerospace
companies and the government.
And in these conferences that we have,
the suppliers, the engineers, the manufacturers
would get up and make presentations to basically show
how they do things.
And that's the benefit of this--
makes the benchmarking a lot easier because people basically
put their heads together and everybody benefits.
I mean there's an annual fee that the companies pay
that supports all that.
But they in fact get the advantages of--
gee, we took a tour through so many factory
and they going a red light that goes on or something like that.
So all the aerospace companies benefit from the conversation
and the discussion and the presentations
and the factory tours of each other's organization.
HUGH MCMANUS: The tools that they
use include simple organization, which
they can use lean principles like 5S and visual control
to clean up their workplace.
Just get the basic process working.
OK?
Balancing a workload.
Which can be planned around lean principles
like pack time, single piece flow.
Which essentially allows them to move work between plants
to clear bottlenecks and get the work balanced.
They can tear down or move facilities.
Again, based on lean principles, not just random action.
And they can modernize this archaic order system.
Again, planned using lean principles.
And there's a mechanic in the simulation to allow
a paperless-- there's actually still a little bit of paper
but much less--
ordering system that would simulate a modern web-based
perhaps, or certainly electronics-based
inventory management system.
One of the key features is the simulation
allows us is to use data.
It's very difficult to go out to a real aircraft manufacturing
plant and play with it.
With the simulation, we can play with it in these 12 minute
rounds and create and use data that we've
collected to both plan improvements and track
processes.
So we can keep track of how long does it take to do things?
How many parts are involved?
What's the delay involved in ordering parts, et cetera?
And we can do that quantitatively and that's
one of the key aspects of most product improvement techniques.
It's to use the data and let it tell you
what to do, not just make things up as you go along.
Be entirely dependent on common sense
or experience to do these kinds of improvements.
And this data can be incorporated
into classic lean tools like value-stream mapping.
This is the same data plotted in the classic lean value-stream
map.
Again it gives them the opportunity to touch a tool,
to actually use it, to actually fill out the data with data
that they've collected from at least a simulated reality
and then use that to analyze it, so that they
can find bottlenecks.
They can find non-value added steps.
They can find places where paperwork and lack
of synchronization are slowing the process down
and then focus their improvements on those areas.
Finally at the end of the simulation,
we essentially, as we do in the real world with lean thinking,
ask them to expand their horizons.
Expand the boundaries of the enterprise
that they're considering and seeing
if they can get bigger payoffs by doing more.
By bringing in more functions.
In this case, there's not an engineering function
in the simulation, but we do allow them to redesign
the airplane to cut part count.
Reduce part types.
Fix problems with the airplane.
Make it easier to assemble.
Do all of the things--
all of the engineering functions that facilitate
lean in the real world.
And again, touch it, understand it, understand it in context,
and then see how it works in the final round.
And again, by rebalancing work, by redesigning the airplane,
by changing the facility organization and further model
modernizing the supply chain, by getting
into a really clean modern just-in-time supply chain.
Using the lean principles and implementing it
on the simulation, they can get an outstanding process out
of it.
And that gives them a real intuitive and tactile feel
for how lean type product improvement principles can
be used to not just make a process better,
but to make it astonishingly better in a way
that they usually do not think is possible
when they start the simulation.
Another thing that's done is throughout the simulation,
we embed learning by doing mini lessons.
And this is just a single example.
Kanban systems.
Kanbans are a inventory management ordering
and transport system which is difficult to lecture
to because it's a very simple thing that does a lot of-- that
has a lot of different functionalities
in the real world.
And solves a lot of problems in ways that are sometimes
not intuitive.
In the simulation, they use Kanbans to basically solve
their inventory management and supply chain problems.
And they get both repeated reintroduction to the concept
and what they're doing, and mentored execution
of that concept in the simulated world,
so that they really do get an understanding of how
a simple system like Kanban can serve so many functions
and solve some problems.
The overall result-- and this is typical data
from a real event is that they can
go from producing no airplanes, or maybe one,
the first time they try.
To producing a dozen the last time, in the same time
and using the same basic capabilities.
They never get to throw the hourglasses away.
It never turns into a LEGO building race.
This isn't just a learning curve.
What they've done is the process as it exists
and made it much, much better.
And tracking along with that is the financials,
which go from losing a lot of money to making a lot.
Not surprisingly, but again, they
get a feel for how this kind of production efficiency
can lead to financial performance.
OK, so we had a successful conclusion
of our simulation exercise.
All of our tables managed to produce
at least eight aircraft.
One table got all the way up to the 12
that the customer really wanted.
And we had an 11 and a 10.
Everybody got there by a somewhat different route
and we learned some lessons along the way.
Our group that produced eight.
Now that was still better than the theoretical maximum
six they were making before.
But they didn't meet the theoretical capacity of 12
because they still hadn't ironed out issues with their supply
chain and with coordinating.
It wasn't that they didn't have the theoretical capacity,
it was that the coordination of the different components
of their enterprise wasn't completely ironed out yet.
So they didn't meet their production goals.
Very interesting.
The group that made 11 airplanes did get everything coordinated.
They did a very good job.
One order.
One order was one piece short.
And in a lean system, you're very vulnerable to that kind
of disruption.
That one order.
That one piece in that one order cost them
an airplane, because it disrupted
their synchronization.
It took them a minute to recover.
That was an airplane.
Still that is a known issue with lean production systems, not
necessarily a bad thing.
That the issue-- the problem that
caused the one order to be bad was surfaced immediately.
And in the future-- that happened actually
early in the round and they didn't do it again.
And of course they achieved 11, which is a lot better
than seven aircraft.
And we had one group that was hitting on all cylinders
and managed to produce the aircraft a minute
that the customers really wanted.
Interestingly too, if we look over the course
of the whole day, the production-- a little bit
of variation.
Basically everybody's improving production as they go along.
The financial results show some interesting detail.
It's harder to see in the production diagram.
Which is that although everybody's profit improved,
people took different paths.
And this has been a great class for this
because basically the paths that people took pretty much
mirror the kinds of things that can happen in the real world
when you go into improvement events.
Group number one started out losing a lot of money.
As soon as they stabilized their traditional process,
they actually managed to make money.
And when they disrupted it, trying to lean it out.
They had what we call a worse-before-better.
Things actually got worse until they got better again
and stabilized at a high profit situation.
Group number two showed a much steadier increase in profit.
They basically showed an almost linear improvement.
So they were not so disrupted by change.
Didn't come to quick results, but by learning slowly
and steadily as they went through the transformation
process, managed to increase their profits steadily.
That's nice because that looks good.
It's not always what happens.
The green te-- sorry, blue team, showed again,
a typical reaction.
They stabilized and then in the actual improvement round,
the round where they changed things,
showed at best steady financial results.
So this was learning in a given state
but they would have maxed out there.
During the transformation they didn't make more money,
but that set them up for the next round
where they made a lot.
And again during the next transformation
they flattened off again.
This is a lot nicer than that worse-before-better,
but it's still very typical.
While you're investing the resources.
While you're changing things.
You can't expect the dramatic financial results
to happen right away.
What you do is set yourself up for dramatic improvements
in the next period.
And we had a final group which also did
the worse-before-better thing.
It had a little bit of a unfortunate end
result, which is the very last round they actually
had it worse.
And that was the group that only made the eight aircraft.
They were quite certain if we'd done another round that they
could have gotten the 12 and in fact
completed their zig-zag worse-before-better journey.
So that's a description of the simulation and how it's used.
We're going to do a brief description
of the pedagogical goals of the simulation
and how we think they've been achieved in the Lean Academy
context.
We said that we wanted it to increase the comprehension
of the curriculum.
And there is some literature evidence that this works.
In particular, in the computer world people
have played computer games versus static computer
websites.
And it has been shown that the little games--
and these are little toy games.
But the little games basically make people retain
the material much better.
And also if you look at behavior.
There's been studies on things like healthy diet
that people that have learned through game-based learning as
opposed to static learning actually take-- not only learn
and retain the information, better but it actually
affects the outcome.
So that's good.
That evidence is there.
We also hoped that there's better understanding
of the context and the holistic nature of the material.
And we hoped that they learn through experience.
That it engages different learning modes and that
it allows them to practice field,
to actually touch and use the ideas.
These are supported as goals.
But there's not really a whole lot of scientific evidence
that this works.
Intuitively, the evidence is pretty powerful
and the anecdotal experience from the students is powerful.
It's not a proven outcome.
And we can certainly say that we've
observed greatly increased student
involvement and excitement.
AUDIENCE: Yeah, when we were on the same team for the LEGO
simulation and it was a lot of fun.
Especially since we got a little competitive
with the other teams and trying to build the most airplanes.
But that was really cool.
It's something that we played with ever
since we were little kids and to be
able to build something but then apply the lean principles.
And it was really amazing to see how much we
learned through that.
AUDIENCE: It was probably the best way
of demonstrating how process that I
thought it was efficient at first and after applying lean.
We didn't think we could make 12 airplanes in 12 minutes
but well-- we almost made it.
We made 10.
But it is possible to do what some
believe is impossible at first.
And after applying the analysis and getting all the processes
down correctly, we were getting pretty close.
AUDIENCE: Yeah, I mean that's pretty amazing.
I was looking at the chart up there and I was like, wait.
We really only made one in 12 minutes the first time?
And then went all the way up to 10 so.
AUDIENCE: We're impressed.
AUDIENCE: Yeah.
HUGH MCMANUS: So we think this is working.
We also have had very positive experience with basically
teaching complicated systems.
Most of the previous literature evidence
was on relatively simple things.
Fact-based things.
We're actually trying to teach a system that
affects other systems.
So it's a complicated body of knowledge,
body of understanding, that the students
are expected to absorb in a relatively short time.
And most of these systems are not
available for manipulation for teaching purposes.
You can't go play with an airplane factory.
We found that the students have a good experience--
and this experience is not limited
to this particular simulation, although this
is a good exemplar of it.
If the simulation is complex enough to capture the key
features, including the emergent behaviors of the system.
If it's too simple, you're not really changing anything.
You're not really changing a system that
has unexpected behaviors, so you're not
going to capture this kind of learning.
On the other hand, it has to be simple enough
to have an acceptable learning curve.
If it takes three days to learn it's not
going to be a teaching tool.
And of course, it has to be fast enough that you
can do multiple cycles of learning within the teaching
period.
It also has to be credible in the sense
that it can't have artifacts that the students say,
well, this is not realistic and therefore I
will dismiss the experience because I don't believe it.
And it has to be fun to keep people engaged.
And basically on this set of criteria,
we think that the simulation that we use in the Lean Academy
is pretty good.
Students think it's pretty good too.
This is feedback from about 200 students,
194 students over a couple of years of Lean Academies.
And we consistently get the highest score
of the types of learning, both other active learning
and lecturing materials.
That the Lean Academy simulation provides positive reinforcement
of the concepts.
That's the wording of the question
and the students agree that that's the case.
Just qualitatively we also get some written feedback
and verbal feedback.
And it appears, and again this is unprompted.
We asked them the general question,
what do you like about the course
and what do you don't like?
And what we find is what they like
is what we're hoping, which is that it increases
the comprehension of the curriculum.
That the hands-on learning and practice field experiences
are valuable to them.
And that it increases their involvement and excitement
with the material.
As well as-- this was not an explicit,
but it does show up a lot in the student responses
as a team building and camaraderie building activity.
It's also very effective.
And this is just a numerical breakdown
of those kinds of responses.
Out of 106 written responses, we got a lot of illuminatings.
A fair number of, we liked the hands-on aspect.
And the excitement and bonding were somewhat secondary
but mentioned.
As well as a big blob is just generic, we like it.
But that doesn't tell us a whole bunch about why they like it
but these do and it's what we're hoping.
Caveats.
Always important.
This evaluation is based on satisfaction, not really
outcomes.
We don't track the students in their careers
as aerospace engineer so we don't have outcome metrics yet.
It's cost and time intensive to do this kind of thing.
You need trained facilitators.
It takes money to set up a facility
to do this, couple of thousand dollars.
That's the startup cost.
Not the per each, although you do
have to pay these people somehow.
They're vulnerable to disruption.
Logistics, facility, failure to keep on schedule errors
can degrade the experience badly.
Our simulation seems to be fairly robust
but in general simulations are vulnerable to disruption.
And you can't satisfy every learning style.
Amusingly, we've had written feedback
asking for both more and last simulation.
Because some people feel they need more time
to internalize the information that's there.
Others get it quickly and wish they could move on
to other learning modes.
And another one, and it's a unexpected psychological
effect, is that there's real stress
in the simulated process.
And that this sometimes creates difficulties
with people's learning.
Could create competition and bad feeling
if it's not managed carefully.
We've learned that that's something that is an issue that
needs to be managed.
And these, by the way, are typical issues
for teaching simulations.
Conclusion to this part.
We have a unique simulation of aerospace enterprises.
A subset of it is used in the Lean Academy.
We think it works and it provides
a laboratory for experiential learning of complex systems.
There's not a whole lot of work in this area going on.
We've had a very good experience with it.
Certainly the feedback that we have from our students
indicates that it's successful.
And the caveats that we have for our simulation
are typical of learning simulations in general.
ERIC REBENTISCH: There are other aspects of the simulation that
replicate the entire enterprise and I'm
going to talk a little bit about each of those elements.
And the simulations are modular so you
can go through the manufacturing part
or you can go through the engineering part,
depending on what the learning objectives for the course are.
You can combine them in various ways.
You can combine the manufacturing
with the engineering to teach specific lessons
about transition to production and engineering support.
You can look at just engineering alone
if you are interested in understanding
how engineering processes behave in a highly
variable environment.
So there's a lot of flexibility that's
built into the simulation environment.
So this is the simulation that you all experience here
in the Academy that has a manufacturing core
simulation and a simplified supplier
base with a representative.
If you expand out to the full supplier simulation,
you get a much richer experience of understanding
how ordering and fulfillment processes are
dynamic in the enterprise.
And learning much more about network organization structures
and the way they behave and how effective coordination is
critical to lean.
For the full enterprise, you can add the dynamics
of an engineering system that is supporting the manufacturing
and supply base.
And this is the full [INAUDIBLE] sim,
where the engineering changes that you
made during the course of the redesign of the airplane
were done for essentially free in this simulation
that you did in the Lean Academy.
In the real enterprise simulation,
you have to wait for the engineers
to process those jobs.
And that can lead to all sorts of interesting dynamics
amongst the players and simulated organizational
structures.
There's also a service and support
module that looks at aftermarket field support for the products
and this introduces new and interesting complexities
to the enterprise.
Because you now have two main value
streams and sources of revenues.
You have to prioritize where you make
improvements in the enterprise.
All right.
So there's another variant of the simulation
that focuses on just an engineering organization.
Most engineering organizations have multiple projects
going on at a given time and they're
competing for resources.
And those projects aren't always the same.
So this simulation looks at how you prioritize projects,
how you structure the organization, how you manage
the interactions so that you get the highest
throughput through the system and the most
return on investment for improvements
through lean practices.
So some of the things that we're not covered in the Lean Academy
simulation are a more advanced economic system
that allows you to make trade-offs,
to understand what the impact of lean improvements are,
and to actually calculate financial performance
of the kind that you would typically
track with a real company.
There's also a lean calculator that
can be used to evaluate whether one proposed improvement
effort is better than another.
And these are levels of analysis that
are more in-depth tools, that are more sophisticated that
can be added on to the sim environment.
So in all, it's a fairly sophisticated system
for teaching the impact of lean principles and practices
on an enterprise.
So there are a number of organizations
that are using the web simulation and its variants
and they have adopted it for their own use
and are actually using it in their own internal training.
So we have a method for actually disseminating these materials.
And if there are any questions about adopting the simulation,
the best place to go would be to send
a message to ednet@mit.edu.
And you can get more information about how you might
adopt these training materials.