1 00:00:00,000 --> 00:00:02,430 The following content is provided under a Creative 2 00:00:02,430 --> 00:00:03,730 Commons license. 3 00:00:03,730 --> 00:00:06,060 Your support will help MIT OpenCourseWare 4 00:00:06,060 --> 00:00:10,090 continue to offer high-quality educational resources for free. 5 00:00:10,090 --> 00:00:12,690 To make a donation or to view additional materials 6 00:00:12,690 --> 00:00:16,560 from hundreds of MIT courses, visit MIT OpenCourseWare 7 00:00:16,560 --> 00:00:17,744 at ocw.mit.edu. 8 00:00:26,060 --> 00:00:29,687 EARLL MURMAN: OK, well, this is literally, for most of you, 9 00:00:29,687 --> 00:00:31,520 the start of your lean journey because we've 10 00:00:31,520 --> 00:00:35,960 seen the value of data, and we know that, for many of you, 11 00:00:35,960 --> 00:00:37,790 this whole subject matter is something 12 00:00:37,790 --> 00:00:39,477 you've hardly heard about. 13 00:00:39,477 --> 00:00:41,060 And that's perfect because that's what 14 00:00:41,060 --> 00:00:42,800 this course is designed for. 15 00:00:42,800 --> 00:00:44,390 So welcome. 16 00:00:44,390 --> 00:00:47,400 So, at the end of this module, we 17 00:00:47,400 --> 00:00:50,370 hope you'll be able to explain the origins of Lean and Six 18 00:00:50,370 --> 00:00:54,210 Sigma, explain the lean 6S tool. 19 00:00:54,210 --> 00:00:56,982 You're going to learn your first lean tool here. 20 00:00:56,982 --> 00:00:58,940 You're going to be able to define what is lean, 21 00:00:58,940 --> 00:01:02,030 what's a lean enterprise, and who are stakeholders 22 00:01:02,030 --> 00:01:04,140 of the lean enterprise. 23 00:01:04,140 --> 00:01:06,810 You'll recognize why Lean Six Sigma principles 24 00:01:06,810 --> 00:01:09,628 are being implemented in aerospace, 25 00:01:09,628 --> 00:01:10,920 health care, and other sectors. 26 00:01:10,920 --> 00:01:13,980 We're going to talk about why these sectors are 27 00:01:13,980 --> 00:01:15,840 moving in this direction. 28 00:01:15,840 --> 00:01:19,110 And you'll be able to explain that lean is a journey. 29 00:01:19,110 --> 00:01:20,290 It's not a state. 30 00:01:20,290 --> 00:01:21,330 You never are lean. 31 00:01:21,330 --> 00:01:23,665 You're always trying to become lean. 32 00:01:23,665 --> 00:01:25,290 And we'll talk a little bit about that. 33 00:01:29,120 --> 00:01:33,020 So this subject matter comes out of the Japanese automotive 34 00:01:33,020 --> 00:01:33,860 industry. 35 00:01:33,860 --> 00:01:39,410 And, unlike aerospace engineering and structures 36 00:01:39,410 --> 00:01:43,640 and controls and aerodynamics where 37 00:01:43,640 --> 00:01:46,445 you can go to the laboratory and see what's happening 38 00:01:46,445 --> 00:01:48,320 and do experiments and things, in this field, 39 00:01:48,320 --> 00:01:50,600 you have to go to where it's actually 40 00:01:50,600 --> 00:01:54,050 being practiced because the body of knowledge 41 00:01:54,050 --> 00:01:56,030 comes from that field. 42 00:01:56,030 --> 00:02:00,010 So this all kind of came to the surface in 1990 43 00:02:00,010 --> 00:02:02,440 when MIT published a book called The Machine That 44 00:02:02,440 --> 00:02:04,160 Changed the World. 45 00:02:04,160 --> 00:02:06,820 It was a study of the Japanese, North American, 46 00:02:06,820 --> 00:02:09,740 and European automotive manufacturing. 47 00:02:09,740 --> 00:02:13,210 And this is a plot given then of production of cars. 48 00:02:13,210 --> 00:02:17,010 These are all the US car manufacturers, 49 00:02:17,010 --> 00:02:19,390 and here's Japan. 50 00:02:19,390 --> 00:02:21,950 And what do you see in that chart? 51 00:02:21,950 --> 00:02:23,150 What jumps out at you? 52 00:02:26,930 --> 00:02:29,300 What's the first thing you see? 53 00:02:29,300 --> 00:02:32,100 AUDIENCE: Japan is increasing a lot faster than US 54 00:02:32,100 --> 00:02:33,650 and passes us in-- 55 00:02:33,650 --> 00:02:34,900 EARLL MURMAN: Yeah, close to-- 56 00:02:34,900 --> 00:02:35,320 AUDIENCE: --1980. 57 00:02:35,320 --> 00:02:36,420 EARLL MURMAN: It's now kept going. 58 00:02:36,420 --> 00:02:36,760 AUDIENCE: Yeah. 59 00:02:36,760 --> 00:02:38,177 EARLL MURMAN: So that's one thing. 60 00:02:38,177 --> 00:02:39,880 Japan has just steady growth. 61 00:02:39,880 --> 00:02:42,225 What's the next thing you see? 62 00:02:42,225 --> 00:02:43,600 AUDIENCE: It's pretty consistent. 63 00:02:43,600 --> 00:02:46,130 EARLL MURMAN: Inconsistent, right. 64 00:02:46,130 --> 00:02:47,905 This is the typical US thing. 65 00:02:47,905 --> 00:02:50,030 You kind of overproduce, underproduce, overproduce. 66 00:02:50,030 --> 00:02:52,240 And the Japanese are nice, smooth, and steady. 67 00:02:52,240 --> 00:02:54,740 There's a lot of data in The Machine That Changed the World. 68 00:02:54,740 --> 00:02:56,030 And we're not going to go through all this, 69 00:02:56,030 --> 00:02:57,900 but I want to make a couple of points. 70 00:02:57,900 --> 00:03:00,410 First of all, the data in this chart 71 00:03:00,410 --> 00:03:02,650 is product development and manufacturing. 72 00:03:02,650 --> 00:03:05,030 Now, a big mistake a lot of US companies 73 00:03:05,030 --> 00:03:07,160 made when they read this book was that lean 74 00:03:07,160 --> 00:03:09,990 is a manufacturing paradigm. 75 00:03:09,990 --> 00:03:11,370 It's a manufacturing system. 76 00:03:11,370 --> 00:03:14,120 In fact, most of my friends, when they talk to me say, 77 00:03:14,120 --> 00:03:16,370 oh, you're in lean manufacturing. 78 00:03:16,370 --> 00:03:18,170 The Japanese never saw it that way. 79 00:03:18,170 --> 00:03:21,110 They implement lean right back in engineering and product 80 00:03:21,110 --> 00:03:22,820 development. 81 00:03:22,820 --> 00:03:24,740 So, in product development, for instance, 82 00:03:24,740 --> 00:03:30,150 the average engineering hours in a new car, 1.7 million 83 00:03:30,150 --> 00:03:33,210 for Japanese, 3.1 million for US, almost twice 84 00:03:33,210 --> 00:03:38,220 the number of engineering hours for the same car. 85 00:03:38,220 --> 00:03:41,790 Supplier share of engineering, how many of the suppliers 86 00:03:41,790 --> 00:03:43,440 are actually doing engineering compared 87 00:03:43,440 --> 00:03:44,820 to just supplying parts? 88 00:03:44,820 --> 00:03:47,950 51% in Japan, 14% in US. 89 00:03:47,950 --> 00:03:49,950 So we're going to be talking about that tomorrow 90 00:03:49,950 --> 00:03:51,390 in the engineering section. 91 00:03:53,960 --> 00:03:55,880 That's design. 92 00:03:55,880 --> 00:03:57,050 Here's production. 93 00:03:57,050 --> 00:04:00,090 Let's just get a couple of numbers. 94 00:04:00,090 --> 00:04:03,780 Quality defects per 100 vehicles, 60 for Japanese, 95 00:04:03,780 --> 00:04:06,480 82 for US. 96 00:04:06,480 --> 00:04:13,850 Training hours of new workers, 380 for Japan, 46 for US. 97 00:04:13,850 --> 00:04:17,450 That's probably not because the Japanese need more training. 98 00:04:17,450 --> 00:04:20,750 It's probably because Japan invests more in training. 99 00:04:20,750 --> 00:04:26,750 So this is what started the whole lean activity 100 00:04:26,750 --> 00:04:28,280 around the world and in the US. 101 00:04:28,280 --> 00:04:29,780 Now, how does lean compare-- 102 00:04:29,780 --> 00:04:31,370 what are the fundamental comparisons 103 00:04:31,370 --> 00:04:32,787 of lean with what we already know? 104 00:04:32,787 --> 00:04:37,790 Well, we have here lean thinking, mass production, 105 00:04:37,790 --> 00:04:40,070 and craft production as sort of three paradigms. 106 00:04:40,070 --> 00:04:41,660 Let's just-- we're going to spend a bit of time 107 00:04:41,660 --> 00:04:43,118 on this chart because this is going 108 00:04:43,118 --> 00:04:45,750 to set your thoughts for the whole course. 109 00:04:45,750 --> 00:04:48,480 So let's look at these are different focus areas. 110 00:04:48,480 --> 00:04:51,150 So, in operations, in a craft thing, 111 00:04:51,150 --> 00:04:53,090 a person is working on a single item. 112 00:04:53,090 --> 00:04:56,363 In mass production, the idea is you make a lot of them, 113 00:04:56,363 --> 00:04:57,530 and you put them in a queue. 114 00:04:57,530 --> 00:04:59,900 You make more, and you put them in a queue. 115 00:04:59,900 --> 00:05:01,940 In lean thinking, it's all flow. 116 00:05:01,940 --> 00:05:04,640 Everything is flowing very smoothly and synchronized. 117 00:05:04,640 --> 00:05:06,920 And we're going to talk a lot about flow. 118 00:05:06,920 --> 00:05:09,670 What's the overall aim? 119 00:05:09,670 --> 00:05:12,400 In craft, it was the mastery of the craft. 120 00:05:12,400 --> 00:05:14,830 In mass production, it's reduced unit cost 121 00:05:14,830 --> 00:05:17,360 and increased efficiency. 122 00:05:17,360 --> 00:05:19,820 In lean, it's eliminating all waste 123 00:05:19,820 --> 00:05:22,777 and only doing value-added activities. 124 00:05:22,777 --> 00:05:24,610 You're going to be hearing a lot about this. 125 00:05:24,610 --> 00:05:27,160 By the way, most of the things that we talk about today, 126 00:05:27,160 --> 00:05:28,740 we're going to come back and talk about tomorrow. 127 00:05:28,740 --> 00:05:29,970 And then we're going to come back and talk about 128 00:05:29,970 --> 00:05:30,910 on Wednesday. 129 00:05:30,910 --> 00:05:33,240 So, if something goes by you today 130 00:05:33,240 --> 00:05:35,830 and you go home and say I don't think I really got it, 131 00:05:35,830 --> 00:05:37,288 that's good because tomorrow you're 132 00:05:37,288 --> 00:05:38,790 going to get it again probably. 133 00:05:38,790 --> 00:05:40,957 So we're going to be talking about all these things. 134 00:05:40,957 --> 00:05:43,830 Quality, in craft production, it was just 135 00:05:43,830 --> 00:05:45,000 part of how they did things. 136 00:05:45,000 --> 00:05:46,750 It was integrated into their whole system. 137 00:05:46,750 --> 00:05:50,110 In mass production, quality was treated as a second step. 138 00:05:50,110 --> 00:05:52,120 We inspect, and we correct. 139 00:05:52,120 --> 00:05:54,040 In lean thinking, it's built-- 140 00:05:54,040 --> 00:05:59,290 the quality is built in at every step of the whole activity 141 00:05:59,290 --> 00:06:01,580 from engineering right through production. 142 00:06:01,580 --> 00:06:04,960 And one of the things that was so hard for Westerners to grasp 143 00:06:04,960 --> 00:06:09,730 was most Westerners thought I'll give you a quality output, 144 00:06:09,730 --> 00:06:11,650 but it's going to cost you more money. 145 00:06:11,650 --> 00:06:14,910 And what the Japanese found was I'll give you a quality output, 146 00:06:14,910 --> 00:06:16,750 and it costs less money. 147 00:06:16,750 --> 00:06:19,493 Quality-- and this is really important in health care. 148 00:06:19,493 --> 00:06:21,160 This is really important in health care. 149 00:06:21,160 --> 00:06:24,840 Focusing on quality will drive down cost. 150 00:06:24,840 --> 00:06:26,400 It always has. 151 00:06:26,400 --> 00:06:28,290 Business strategy here was customization. 152 00:06:28,290 --> 00:06:30,600 Here it's economies of scale and automation. 153 00:06:30,600 --> 00:06:33,480 Here it's being flexible and adaptable to the changing 154 00:06:33,480 --> 00:06:35,740 customer demands. 155 00:06:35,740 --> 00:06:39,220 And I think this is really the heart of lean, this last one. 156 00:06:39,220 --> 00:06:41,260 In the craft, who does the improvement? 157 00:06:41,260 --> 00:06:45,460 In the craft world, it was the master-driven continuous 158 00:06:45,460 --> 00:06:46,600 improvement. 159 00:06:46,600 --> 00:06:48,100 In the mass production world, it was 160 00:06:48,100 --> 00:06:50,808 the expert-driven periodic improvement. 161 00:06:50,808 --> 00:06:52,350 We'd bring in the consulting company. 162 00:06:52,350 --> 00:06:54,150 They'd tell us how to improve. 163 00:06:54,150 --> 00:06:56,370 Here it's the worker does the improvement 164 00:06:56,370 --> 00:06:58,440 in a continuous way. 165 00:06:58,440 --> 00:07:01,080 The worker is a continuous problem solver. 166 00:07:01,080 --> 00:07:02,970 So I spent a lot of time on that chart 167 00:07:02,970 --> 00:07:06,310 because this really sets up the whole course. 168 00:07:06,310 --> 00:07:09,550 And, when we wrote a book on this, 169 00:07:09,550 --> 00:07:11,470 we struggled with how we define lean. 170 00:07:11,470 --> 00:07:12,970 And here's the term we came up with. 171 00:07:12,970 --> 00:07:17,260 Lean thinking is the dynamic, knowledge-driven, 172 00:07:17,260 --> 00:07:19,810 customer-focused process through which 173 00:07:19,810 --> 00:07:23,590 all people in an enterprise continuously eliminate waste 174 00:07:23,590 --> 00:07:25,520 and create value. 175 00:07:25,520 --> 00:07:28,020 So you guys are actually little enterprises for this course. 176 00:07:28,020 --> 00:07:29,978 You guys are going to be airplane manufacturing 177 00:07:29,978 --> 00:07:30,750 enterprises. 178 00:07:30,750 --> 00:07:33,450 And you guys are going to be clinics. 179 00:07:33,450 --> 00:07:35,970 And tomorrow, when we do our LEGO simulations, 180 00:07:35,970 --> 00:07:37,830 you're going to be applying these principles 181 00:07:37,830 --> 00:07:39,426 in your enterprises. 182 00:07:42,620 --> 00:07:45,320 OK, so what about Lean and Six Sigma? 183 00:07:45,320 --> 00:07:47,693 They're very interrelated. 184 00:07:47,693 --> 00:07:49,610 They came from somewhat different backgrounds. 185 00:07:49,610 --> 00:07:51,350 Six Sigma was developed by Motorola 186 00:07:51,350 --> 00:07:55,880 in the 1980s when they decided that the big problem they had 187 00:07:55,880 --> 00:07:59,220 was that all their processes had too much variation. 188 00:07:59,220 --> 00:08:01,195 So, when they built something, they 189 00:08:01,195 --> 00:08:03,070 weren't sure what the output was going to be. 190 00:08:03,070 --> 00:08:05,690 And so they didn't have very good what you might call yield. 191 00:08:05,690 --> 00:08:08,540 They had a lot of scrap and not just in production, 192 00:08:08,540 --> 00:08:11,540 but in office processes and everything. 193 00:08:11,540 --> 00:08:15,130 So Motorola focused on reducing the variation of every process 194 00:08:15,130 --> 00:08:18,970 so that every process would have a predictable output 195 00:08:18,970 --> 00:08:20,930 to deliver value to their customers. 196 00:08:20,930 --> 00:08:24,300 It was very problem focused, and the assumption 197 00:08:24,300 --> 00:08:25,420 is you've got a-- 198 00:08:25,420 --> 00:08:26,700 that a process isn't working. 199 00:08:26,700 --> 00:08:29,850 So you go, and you do a very kind of quantitative analysis 200 00:08:29,850 --> 00:08:33,360 and fix that process and get the variation down. 201 00:08:33,360 --> 00:08:36,150 Lean has the same end objective of delivering value 202 00:08:36,150 --> 00:08:38,789 to the customer, but its focus is 203 00:08:38,789 --> 00:08:41,370 to reduce waste, to get all the waste out of the system. 204 00:08:41,370 --> 00:08:43,289 And we'll find out that most of the thing-- 205 00:08:43,289 --> 00:08:46,290 most of the inefficiency is not the people. 206 00:08:46,290 --> 00:08:50,760 It's the system in which the people are working is wasteful. 207 00:08:50,760 --> 00:08:53,500 And it's focused on keeping everything flowing. 208 00:08:53,500 --> 00:08:56,280 And so the assumption is that waste removal will improve 209 00:08:56,280 --> 00:08:59,010 businesses and that many small improvements are 210 00:08:59,010 --> 00:09:00,510 better than a big, giant step. 211 00:09:00,510 --> 00:09:04,350 So lean is very much a process of starting where you are, 212 00:09:04,350 --> 00:09:06,720 taking whatever system you have, making 213 00:09:06,720 --> 00:09:09,300 it a little bit better or a lot better, and then making it 214 00:09:09,300 --> 00:09:11,190 a lot better and then making it a lot better 215 00:09:11,190 --> 00:09:12,940 and just continually trying to improve it. 216 00:09:12,940 --> 00:09:14,190 And that's why it's a journey. 217 00:09:16,610 --> 00:09:23,950 Now, what's happened over the past 10, 15 years is that-- 218 00:09:23,950 --> 00:09:25,917 well, let me back up and say, 15 years ago, 219 00:09:25,917 --> 00:09:28,000 there were people saying, oh, I'm doing Six Sigma, 220 00:09:28,000 --> 00:09:29,410 or I'm doing lean. 221 00:09:29,410 --> 00:09:31,240 It was like there were two camps. 222 00:09:31,240 --> 00:09:34,440 And, luckily, eventually we got past that, 223 00:09:34,440 --> 00:09:38,890 and most organizations now pick some portions 224 00:09:38,890 --> 00:09:43,790 of lean, some portions of Six Sigma, and bring them together. 225 00:09:43,790 --> 00:09:47,120 We think of lean as sort of optimizing flow and Six 226 00:09:47,120 --> 00:09:49,520 Sigma as reducing variation. 227 00:09:49,520 --> 00:09:52,370 And the body of knowledges have come together 228 00:09:52,370 --> 00:09:54,620 into something that's generally called Lean Six Sigma. 229 00:09:54,620 --> 00:09:57,440 There are books you can buy called Lean Six Sigma. 230 00:09:57,440 --> 00:10:00,140 And what happens is an enterprise 231 00:10:00,140 --> 00:10:03,810 will look at these principles. 232 00:10:03,810 --> 00:10:06,720 They will tailor their own version of it. 233 00:10:06,720 --> 00:10:08,790 They will name it and brand it. 234 00:10:08,790 --> 00:10:12,570 And it becomes their operating strategy or their improvement 235 00:10:12,570 --> 00:10:13,710 strategy. 236 00:10:13,710 --> 00:10:16,270 So Textron calls theirs Textron Six Sigma. 237 00:10:16,270 --> 00:10:19,500 Virginia Mason Medical Center calls it the Virginia Mason 238 00:10:19,500 --> 00:10:20,860 Production System. 239 00:10:20,860 --> 00:10:22,678 Some of you are either going to work 240 00:10:22,678 --> 00:10:23,970 or have been working at Boeing. 241 00:10:23,970 --> 00:10:26,640 They call theirs Lean+ now. 242 00:10:26,640 --> 00:10:29,032 And I was talking with Susan a little earlier. 243 00:10:29,032 --> 00:10:30,990 Dartmouth, which is a real leader in this area, 244 00:10:30,990 --> 00:10:33,180 doesn't even call it lean at all. 245 00:10:33,180 --> 00:10:34,360 And that doesn't matter. 246 00:10:34,360 --> 00:10:38,400 It's that the organization understands their process 247 00:10:38,400 --> 00:10:41,340 improvement and identifies with it and takes ownership of it 248 00:10:41,340 --> 00:10:44,880 and doesn't get hung up on what the name is. 249 00:10:44,880 --> 00:10:48,210 So our course is going to cover all the principles that 250 00:10:48,210 --> 00:10:49,350 underlie all these things. 251 00:10:49,350 --> 00:10:50,370 If you are going-- 252 00:10:50,370 --> 00:10:53,640 if you were in a company or a hospital in which they're 253 00:10:53,640 --> 00:10:55,770 training, they would give you specific training 254 00:10:55,770 --> 00:10:58,980 on their system because you're working for them. 255 00:10:58,980 --> 00:11:00,480 But you're all going to go somewhere 256 00:11:00,480 --> 00:11:01,785 else, different places. 257 00:11:01,785 --> 00:11:03,660 So what we give you are the fundamentals that 258 00:11:03,660 --> 00:11:06,130 apply to any of those systems. 259 00:11:06,130 --> 00:11:07,960 Let's wind up the first part of this module 260 00:11:07,960 --> 00:11:10,630 with a slide that shows how important people are 261 00:11:10,630 --> 00:11:13,240 in implementing continuous improvement. 262 00:11:13,240 --> 00:11:16,270 I often hear that there are two jobs we all have. 263 00:11:16,270 --> 00:11:18,490 One job is the work we do, and the other job 264 00:11:18,490 --> 00:11:20,680 is improving how we do our work. 265 00:11:20,680 --> 00:11:22,930 And we're going to emphasize the importance of people 266 00:11:22,930 --> 00:11:26,590 in implementing lean thinking throughout the whole course. 267 00:11:26,590 --> 00:11:28,590 And we'll even get ahead of it in this exercise 268 00:11:28,590 --> 00:11:30,023 we're now going to do. 269 00:11:30,023 --> 00:11:30,940 That's the background. 270 00:11:30,940 --> 00:11:32,860 Now, let's get some of these specifics. 271 00:11:32,860 --> 00:11:34,900 On the right-hand side of your folder 272 00:11:34,900 --> 00:11:37,230 is an exercise that looks like this. 273 00:11:37,230 --> 00:11:38,980 And take it out, and don't open it up yet. 274 00:11:38,980 --> 00:11:40,147 Just put it in front of you. 275 00:11:43,460 --> 00:11:45,050 OK, this is called 6S. 276 00:11:45,050 --> 00:11:48,005 Now, there are two versions of this out there. 277 00:11:48,005 --> 00:11:49,260 There are multiple versions. 278 00:11:49,260 --> 00:11:50,440 There's 5S and 6S. 279 00:11:50,440 --> 00:11:53,328 So 5S came from the Japanese. 280 00:11:53,328 --> 00:11:55,370 They were Japanese words, which I don't remember, 281 00:11:55,370 --> 00:11:59,580 but they've been translated into basically sort, 282 00:11:59,580 --> 00:12:02,430 straighten, scrub, standardize, and sustain. 283 00:12:02,430 --> 00:12:05,490 And this is a way of improving your work environment, 284 00:12:05,490 --> 00:12:05,990 very simple. 285 00:12:05,990 --> 00:12:07,532 And we'll talk a little bit about it. 286 00:12:07,532 --> 00:12:09,960 Now, what happened when this came to the Western world? 287 00:12:09,960 --> 00:12:13,110 The Western world said, ah, safety, that starts with an S 288 00:12:13,110 --> 00:12:13,740 too. 289 00:12:13,740 --> 00:12:15,050 And safety is very important. 290 00:12:15,050 --> 00:12:19,620 So we'll make it 6S, and we'll add safety onto the list. 291 00:12:19,620 --> 00:12:21,750 And, when we put-- this is the only place 292 00:12:21,750 --> 00:12:24,360 in the course where we've actually taken something 293 00:12:24,360 --> 00:12:26,280 that we didn't observe in the field. 294 00:12:26,280 --> 00:12:30,580 When we did this, we thought that's kind of an afterthought 295 00:12:30,580 --> 00:12:32,260 just to put safety at the end of a list. 296 00:12:32,260 --> 00:12:33,885 And safety is more important than that. 297 00:12:33,885 --> 00:12:36,640 So either leave it off, or, if you're going to integrate it, 298 00:12:36,640 --> 00:12:37,270 integrate it. 299 00:12:37,270 --> 00:12:39,260 And so we put it as the second S. 300 00:12:39,260 --> 00:12:41,680 And we call it safe, which is an action verb. 301 00:12:41,680 --> 00:12:44,740 This is probably the only place you'll see this version of 6S, 302 00:12:44,740 --> 00:12:45,500 but that's OK. 303 00:12:45,500 --> 00:12:47,320 Don't worry about that. 304 00:12:47,320 --> 00:12:49,320 So what we're going to do is we're 305 00:12:49,320 --> 00:12:51,030 going to do a little exercise. 306 00:12:51,030 --> 00:12:53,130 And this is your workplace for right now. 307 00:12:53,130 --> 00:12:54,678 This is your work environment. 308 00:12:54,678 --> 00:12:56,220 And we're going to try to improve it, 309 00:12:56,220 --> 00:12:58,395 applying the basic principles of 6S. 310 00:12:58,395 --> 00:13:00,270 And we're going to do it in 20-second rounds. 311 00:13:00,270 --> 00:13:01,812 You can think of each 20-second round 312 00:13:01,812 --> 00:13:04,440 as maybe a work shift or something like that. 313 00:13:04,440 --> 00:13:06,120 And you have a bunch of supplies. 314 00:13:06,120 --> 00:13:07,642 And this is in the medical context, 315 00:13:07,642 --> 00:13:08,850 but we could do it otherwise. 316 00:13:08,850 --> 00:13:12,840 You have some instruments, some bandages, and some medications. 317 00:13:12,840 --> 00:13:16,180 And you're going to-- each of your work shifts, 318 00:13:16,180 --> 00:13:20,570 you're going to be asked to fetch some of these supplies 319 00:13:20,570 --> 00:13:22,610 from your storeroom. 320 00:13:22,610 --> 00:13:25,400 And don't turn it over yet, but the first page represents 321 00:13:25,400 --> 00:13:28,010 your current work environment. 322 00:13:28,010 --> 00:13:31,160 And then each next slide will show you 323 00:13:31,160 --> 00:13:33,247 what you have to fetch in your first work shift. 324 00:13:33,247 --> 00:13:35,330 And, when you fetch it, so what you're going to do 325 00:13:35,330 --> 00:13:37,333 is just put an X through whatever you fetch. 326 00:13:37,333 --> 00:13:39,500 Or, if you want to circle it, you could do that too. 327 00:13:39,500 --> 00:13:40,227 I don't care. 328 00:13:40,227 --> 00:13:41,810 OK, so here's what we're going to need 329 00:13:41,810 --> 00:13:44,360 to get on the first round. 330 00:13:44,360 --> 00:13:46,540 You're going to have to find five syringes, 331 00:13:46,540 --> 00:13:49,000 five of these Band-Aids, five scissors, 332 00:13:49,000 --> 00:13:51,730 and five of the medication II's. 333 00:13:51,730 --> 00:13:55,370 So don't do it yet, but, when I say go, 334 00:13:55,370 --> 00:13:59,860 you're going to flip the page, cross off five of each of these 335 00:13:59,860 --> 00:14:00,850 until I say stop. 336 00:14:00,850 --> 00:14:02,800 And that's the end of the shift. 337 00:14:02,800 --> 00:14:05,470 OK, any questions on the mechanics of it? 338 00:14:08,050 --> 00:14:11,380 OK, so we'll do ready, set, go. 339 00:14:18,040 --> 00:14:19,990 Stop. 340 00:14:19,990 --> 00:14:22,440 [LAUGHTER] 341 00:14:22,440 --> 00:14:23,670 Shift is over. 342 00:14:23,670 --> 00:14:26,210 Time to go home. 343 00:14:26,210 --> 00:14:29,620 OK, so now count up the number of items, total number of items 344 00:14:29,620 --> 00:14:30,120 you got. 345 00:14:30,120 --> 00:14:32,460 I don't need to know items by category, 346 00:14:32,460 --> 00:14:33,820 just the total number of items. 347 00:14:33,820 --> 00:14:36,190 OK, super. 348 00:14:36,190 --> 00:14:40,820 OK, how many are kind of around 8, 9, 10? 349 00:14:40,820 --> 00:14:43,130 OK, probably 10 is roughly about the middle. 350 00:14:43,130 --> 00:14:45,590 We don't have to be too careful. 351 00:14:45,590 --> 00:14:49,750 So this is kind of our workplace. 352 00:14:49,750 --> 00:14:51,410 Well, what do we see? 353 00:14:51,410 --> 00:14:54,430 OK, we didn't get the job done. 354 00:14:54,430 --> 00:14:59,370 And there's high variability, OK? 355 00:14:59,370 --> 00:15:01,400 We have about-- let's see. 356 00:15:01,400 --> 00:15:04,680 We have about 25, 28 workers here in our plant. 357 00:15:04,680 --> 00:15:06,270 And we get quite a variable outcome. 358 00:15:06,270 --> 00:15:08,728 This is the kind of thing Six Sigma was worried about, high 359 00:15:08,728 --> 00:15:09,930 variability. 360 00:15:09,930 --> 00:15:14,630 OK, so that's where we're starting. 361 00:15:14,630 --> 00:15:17,883 Now, our first S is to sort. 362 00:15:17,883 --> 00:15:19,550 And you probably saw, in your workplace, 363 00:15:19,550 --> 00:15:20,810 there's a lot of stuff there that you 364 00:15:20,810 --> 00:15:21,852 don't have to go collect. 365 00:15:21,852 --> 00:15:24,560 There's some old equipment that's in your storeroom. 366 00:15:24,560 --> 00:15:27,890 There may be some medications that have been there. 367 00:15:27,890 --> 00:15:29,960 When this first started, a lot of these companies 368 00:15:29,960 --> 00:15:32,270 go into the storeroom, and they find out 369 00:15:32,270 --> 00:15:35,540 that somebody in purchasing got a good deal some time 370 00:15:35,540 --> 00:15:39,050 on some piece of some equipment or supply. 371 00:15:39,050 --> 00:15:40,460 They got a volume discount. 372 00:15:40,460 --> 00:15:41,990 They bought 10 years worth of it. 373 00:15:41,990 --> 00:15:44,450 And, a year later, they stopped using that stuff. 374 00:15:44,450 --> 00:15:47,300 And then another nine years are still in the storeroom. 375 00:15:47,300 --> 00:15:48,405 That's waste, OK? 376 00:15:48,405 --> 00:15:50,030 So what we're going to do is we're just 377 00:15:50,030 --> 00:15:53,180 going to go through and clean up, get everything out 378 00:15:53,180 --> 00:15:55,850 of the workplace that we're not looking for. 379 00:15:55,850 --> 00:15:57,420 And then we're going to redo this. 380 00:15:57,420 --> 00:15:59,888 So it's the same thing, but now we've gotten rid of all 381 00:15:59,888 --> 00:16:01,430 the clutter, but we're going to get-- 382 00:16:01,430 --> 00:16:02,910 just so we take the learning out, 383 00:16:02,910 --> 00:16:05,600 we're going to get now five tape rolls, five Band-Aids, 384 00:16:05,600 --> 00:16:09,370 five tweezers, and five medication III's. 385 00:16:09,370 --> 00:16:11,560 OK, ready, set, go. 386 00:16:17,830 --> 00:16:20,080 Stop. 387 00:16:20,080 --> 00:16:21,520 OK, now, we count them up again. 388 00:16:21,520 --> 00:16:24,660 And then we'll see where we're at. 389 00:16:24,660 --> 00:16:27,990 OK, anybody get all 20? 390 00:16:27,990 --> 00:16:29,670 19? 391 00:16:29,670 --> 00:16:30,520 19, OK. 392 00:16:33,490 --> 00:16:39,020 OK, how many are around 15, 15? 393 00:16:39,020 --> 00:16:41,330 OK, that's good enough. 394 00:16:41,330 --> 00:16:43,638 OK. 395 00:16:43,638 --> 00:16:45,470 AUDIENCE: 25. 396 00:16:45,470 --> 00:16:46,667 EARLL MURMAN: 25? 397 00:16:46,667 --> 00:16:49,052 AUDIENCE: [INAUDIBLE] 398 00:16:49,052 --> 00:16:52,870 [LAUGHTER] 399 00:16:52,870 --> 00:16:55,900 EARLL MURMAN: So you've made a-- you've made a-- 400 00:16:55,900 --> 00:16:57,964 we're going to talk a lot. 401 00:16:57,964 --> 00:17:03,880 AUDIENCE: [INAUDIBLE] 402 00:17:03,880 --> 00:17:08,740 EARLL MURMAN: So, just a heads up, 403 00:17:08,740 --> 00:17:10,960 one of the things about lean is you're trying 404 00:17:10,960 --> 00:17:12,550 to meet your customer's demand. 405 00:17:12,550 --> 00:17:14,329 And you exceeded customer demand. 406 00:17:14,329 --> 00:17:16,510 OK, sometimes, the customer won't pay you for it, 407 00:17:16,510 --> 00:17:18,099 but, this time, it's probably OK. 408 00:17:18,099 --> 00:17:20,670 How many got-- look at your medications. 409 00:17:20,670 --> 00:17:23,879 Did anybody get a medication I or a medication II? 410 00:17:23,879 --> 00:17:24,421 AUDIENCE: Oh. 411 00:17:24,421 --> 00:17:25,339 AUDIENCE: Yeah, that one is right. 412 00:17:25,339 --> 00:17:25,799 That one is right. 413 00:17:25,799 --> 00:17:26,466 AUDIENCE: I did. 414 00:17:26,466 --> 00:17:27,639 AUDIENCE: Oh, yeah. 415 00:17:27,639 --> 00:17:28,559 [INTERPOSING VOICES] 416 00:17:28,559 --> 00:17:30,850 EARLL MURMAN: Ah, OK. 417 00:17:33,460 --> 00:17:36,070 OK, so now we're going to safe. 418 00:17:36,070 --> 00:17:39,230 Getting the wrong medications is a big problem. 419 00:17:39,230 --> 00:17:41,173 So that's an example of why we set it up-- 420 00:17:41,173 --> 00:17:42,340 that's why we put safe here. 421 00:17:42,340 --> 00:17:46,090 So safe is just making the workplace safe. 422 00:17:46,090 --> 00:17:48,990 If your workers get injured or if the customers get 423 00:17:48,990 --> 00:17:52,260 injured or suppliers get injured, that's pure waste. 424 00:17:52,260 --> 00:17:57,500 That's lost time that they can't contribute to your enterprise. 425 00:17:57,500 --> 00:18:02,330 So safety is not good-- safety is important for many reasons, 426 00:18:02,330 --> 00:18:04,680 but it's very much a lean principle. 427 00:18:04,680 --> 00:18:06,500 You don't want anything that-- 428 00:18:06,500 --> 00:18:09,290 well, I've always said accidents are waste. 429 00:18:09,290 --> 00:18:11,840 So we've gone in, and we've made our workplace a little safe 430 00:18:11,840 --> 00:18:12,590 now. 431 00:18:12,590 --> 00:18:16,370 We've put sheaths on our syringes. 432 00:18:16,370 --> 00:18:18,440 We've made the medications different shapes. 433 00:18:18,440 --> 00:18:19,610 We've closed the scissors. 434 00:18:19,610 --> 00:18:23,540 And so we're going to do the same thing, get 20 items. 435 00:18:23,540 --> 00:18:26,060 And ready, set, go. 436 00:18:30,670 --> 00:18:31,170 Stop. 437 00:18:35,045 --> 00:18:36,920 I think everybody has got the mechanics down. 438 00:18:39,700 --> 00:18:43,580 OK, anybody get 10 or less than 10? 439 00:18:43,580 --> 00:18:45,480 12? 440 00:18:45,480 --> 00:18:47,052 11? 441 00:18:47,052 --> 00:18:47,552 11? 442 00:18:47,552 --> 00:18:47,964 AUDIENCE: 12. 443 00:18:47,964 --> 00:18:49,090 EARLL MURMAN: 11, 11, 12. 444 00:18:49,090 --> 00:18:52,570 OK, we had a little bit of improvement here. 445 00:18:52,570 --> 00:18:55,300 Anybody get all 20? 446 00:18:55,300 --> 00:18:57,090 18? 447 00:18:57,090 --> 00:18:58,690 19? 448 00:18:58,690 --> 00:19:01,600 19, OK. 449 00:19:01,600 --> 00:19:12,260 OK, how about 16, 17, 18, 15, 14? 450 00:19:12,260 --> 00:19:13,610 OK, it's kind of hard to see. 451 00:19:13,610 --> 00:19:16,680 I think we're maybe a little bit better than before, 452 00:19:16,680 --> 00:19:18,750 but about the same. 453 00:19:18,750 --> 00:19:22,220 So we've closed down the variation a little bit. 454 00:19:22,220 --> 00:19:25,463 We didn't expect to get too much improvement in productivity 455 00:19:25,463 --> 00:19:27,630 because all we did was we made the environment safe. 456 00:19:27,630 --> 00:19:31,510 We didn't really do any reorganization. 457 00:19:31,510 --> 00:19:33,130 OK, now we're going to straighten. 458 00:19:33,130 --> 00:19:34,880 Now, that we've gotten all the clutter out 459 00:19:34,880 --> 00:19:36,040 and we've made things safe, now, let's 460 00:19:36,040 --> 00:19:37,998 get our workplace a little bit better organized 461 00:19:37,998 --> 00:19:39,260 so it's not so helter-skelter. 462 00:19:39,260 --> 00:19:40,760 So we're going to straighten things. 463 00:19:40,760 --> 00:19:43,580 So we've installed some racks in our storeroom. 464 00:19:43,580 --> 00:19:48,330 Because management has seen this great increase in productivity, 465 00:19:48,330 --> 00:19:50,760 they're going to ask for more now on the shift. 466 00:19:50,760 --> 00:19:52,940 They want 25. 467 00:19:52,940 --> 00:19:55,000 They want 25 things found. 468 00:19:55,000 --> 00:19:58,220 OK, so you can see the list up there. 469 00:19:58,220 --> 00:20:00,410 OK, ready, set, go. 470 00:20:05,770 --> 00:20:08,170 Stop. 471 00:20:08,170 --> 00:20:11,290 OK, anybody 15 or less? 472 00:20:11,290 --> 00:20:11,790 How many? 473 00:20:11,790 --> 00:20:12,390 AUDIENCE: 14. 474 00:20:12,390 --> 00:20:13,338 EARLL MURMAN: 14. 475 00:20:13,338 --> 00:20:13,880 AUDIENCE: 14. 476 00:20:13,880 --> 00:20:14,300 EARLL MURMAN: 14. 477 00:20:14,300 --> 00:20:14,990 OK, 14. 478 00:20:14,990 --> 00:20:15,760 OK. 479 00:20:15,760 --> 00:20:16,640 AUDIENCE: 15. 480 00:20:16,640 --> 00:20:18,598 EARLL MURMAN: Yeah, you got 15, but she got 14. 481 00:20:18,598 --> 00:20:19,170 What did you? 482 00:20:19,170 --> 00:20:20,110 AUDIENCE: I got 15. 483 00:20:20,110 --> 00:20:21,030 EARLL MURMAN: 15, OK. 484 00:20:21,030 --> 00:20:24,040 Anybody get 25? 485 00:20:24,040 --> 00:20:25,540 24? 486 00:20:25,540 --> 00:20:26,540 23? 487 00:20:26,540 --> 00:20:29,470 23, OK. 488 00:20:29,470 --> 00:20:34,390 And how many are 19, 20, 21? 489 00:20:34,390 --> 00:20:37,420 OK, that looks like we're about in the middle here. 490 00:20:37,420 --> 00:20:40,450 OK, well, we see the increase in productivity there. 491 00:20:40,450 --> 00:20:44,170 OK, now the next S is to basically clean things up, 492 00:20:44,170 --> 00:20:45,040 to scrub. 493 00:20:45,040 --> 00:20:47,410 By the way, in these charts, there 494 00:20:47,410 --> 00:20:50,510 are multiple translations of the Japanese word. 495 00:20:50,510 --> 00:20:51,760 And we've given them all here. 496 00:20:51,760 --> 00:20:54,130 So, for scrub, it's scrub, shine, or sweep 497 00:20:54,130 --> 00:20:58,840 you might find in a particular 5 or 6S incarnation. 498 00:20:58,840 --> 00:21:00,250 And that's pretty important. 499 00:21:00,250 --> 00:21:01,917 Of course, in a health care environment, 500 00:21:01,917 --> 00:21:04,370 it's critical for all sorts of reasons. 501 00:21:04,370 --> 00:21:07,210 But, in an aerospace environment or a production environment, 502 00:21:07,210 --> 00:21:10,450 you can walk-- a lean factory, you can walk into, 503 00:21:10,450 --> 00:21:12,550 and you can eat off the floor. 504 00:21:12,550 --> 00:21:13,480 I mean, we'll see. 505 00:21:13,480 --> 00:21:16,780 We're going to have a video of New Balance shoe. 506 00:21:16,780 --> 00:21:19,090 And you'll see, when we get into that factory, 507 00:21:19,090 --> 00:21:21,490 how clean it is and well lit. 508 00:21:21,490 --> 00:21:23,710 Everything is clean. 509 00:21:23,710 --> 00:21:26,780 It's just a way of thinking. 510 00:21:26,780 --> 00:21:30,820 So keeping your workplace tidy and neat is just part of it. 511 00:21:30,820 --> 00:21:33,350 We can't find a good way to do that exercise here. 512 00:21:33,350 --> 00:21:36,947 So we're going to skip this S and move on to standardize. 513 00:21:36,947 --> 00:21:38,530 So now we want to make it-- now, we've 514 00:21:38,530 --> 00:21:39,822 got everything straightened up. 515 00:21:39,822 --> 00:21:41,740 Now, we make it really easy to find things. 516 00:21:41,740 --> 00:21:45,870 So we've got three clinics here. 517 00:21:45,870 --> 00:21:49,162 It'd be nice if each clinic had its own way of storing things. 518 00:21:49,162 --> 00:21:51,120 OK, and we're going to talk about that tomorrow 519 00:21:51,120 --> 00:21:52,260 in our simulation. 520 00:21:52,260 --> 00:21:54,835 Or we've got two production facilities here. 521 00:21:54,835 --> 00:21:57,210 It'd be nice that, in the two production facilities maybe 522 00:21:57,210 --> 00:22:00,090 of the same company, you'd have the same way of storing things 523 00:22:00,090 --> 00:22:02,250 so you can go from one to the other 524 00:22:02,250 --> 00:22:04,170 and not have to be trained. 525 00:22:04,170 --> 00:22:05,460 So we're now going to-- 526 00:22:05,460 --> 00:22:07,638 we've done a good job of that. 527 00:22:07,638 --> 00:22:08,430 We've standardized. 528 00:22:08,430 --> 00:22:09,330 This as an example. 529 00:22:09,330 --> 00:22:11,670 It's hard to see, but these are a bunch of binders. 530 00:22:11,670 --> 00:22:12,940 And they just put little tags on them 531 00:22:12,940 --> 00:22:15,023 so you can immediately see which binder is missing 532 00:22:15,023 --> 00:22:17,350 because it's out of sequence. 533 00:22:17,350 --> 00:22:19,800 OK, well, now we're up to 30. 534 00:22:19,800 --> 00:22:22,192 OK, we want to get 30 items on this round. 535 00:22:22,192 --> 00:22:23,650 This is the last shift of the week. 536 00:22:23,650 --> 00:22:27,050 You're going to have the weekend off after this. 537 00:22:27,050 --> 00:22:28,740 Ready, set, go. 538 00:22:33,800 --> 00:22:35,570 Stop. 539 00:22:35,570 --> 00:22:37,592 OK, anybody get 30? 540 00:22:37,592 --> 00:22:38,725 AUDIENCE: I got 30. 541 00:22:38,725 --> 00:22:39,850 EARLL MURMAN: Look at that. 542 00:22:39,850 --> 00:22:40,350 Wow. 543 00:22:42,610 --> 00:22:45,420 Anybody get 25 or less? 544 00:22:45,420 --> 00:22:45,920 How many? 545 00:22:45,920 --> 00:22:46,580 AUDIENCE: 25. 546 00:22:46,580 --> 00:22:49,030 EARLL MURMAN: 25. 547 00:22:49,030 --> 00:22:50,570 OK, and how many got 30? 548 00:22:50,570 --> 00:22:52,680 Let's see your hands again. 549 00:22:52,680 --> 00:22:54,260 29? 550 00:22:54,260 --> 00:22:58,490 I mean, it's like this. 551 00:22:58,490 --> 00:23:00,090 OK, well, let's look at this chart. 552 00:23:00,090 --> 00:23:03,080 So we've gone from a system that has high variability and low 553 00:23:03,080 --> 00:23:06,470 productivity to a system that has high productivity 554 00:23:06,470 --> 00:23:07,580 and low variability. 555 00:23:10,230 --> 00:23:12,600 How many of you would-- 556 00:23:12,600 --> 00:23:14,640 how many of you found this environment 557 00:23:14,640 --> 00:23:18,140 where you produced so much more to be more stressful to work in 558 00:23:18,140 --> 00:23:20,280 than this environment? 559 00:23:20,280 --> 00:23:22,050 Nobody, right? 560 00:23:22,050 --> 00:23:23,520 That's what lean is about. 561 00:23:23,520 --> 00:23:26,310 OK, lean is about doing simple things 562 00:23:26,310 --> 00:23:27,570 to improve your workplace. 563 00:23:27,570 --> 00:23:30,300 When I toured the Sikorsky plant where they make the Black Hawk 564 00:23:30,300 --> 00:23:33,780 helicopter, the plant manager said, Earll, lean 565 00:23:33,780 --> 00:23:37,420 is the focused application of common sense. 566 00:23:37,420 --> 00:23:41,290 This is not complicated stuff. 567 00:23:41,290 --> 00:23:44,440 And lean is not about making the worker work harder. 568 00:23:44,440 --> 00:23:48,280 Lean is about putting the worker in an environment where 569 00:23:48,280 --> 00:23:50,910 they can be more productive and happier. 570 00:23:50,910 --> 00:23:53,320 OK, so this is what lean is about. 571 00:23:53,320 --> 00:23:58,420 Most organizations start with 5S as their first thing. 572 00:23:58,420 --> 00:23:59,860 And let me just share-- 573 00:23:59,860 --> 00:24:01,860 just to underline it, I'll share you an example. 574 00:24:01,860 --> 00:24:04,560 So I live in the small town of 9,000 people. 575 00:24:04,560 --> 00:24:06,360 The whole county only has 30,000 people. 576 00:24:06,360 --> 00:24:07,860 It's a rural community. 577 00:24:07,860 --> 00:24:10,535 Our hospital started adopting lean. 578 00:24:10,535 --> 00:24:11,910 The very first thing they did was 579 00:24:11,910 --> 00:24:15,210 they went into the hospital laundry and applied 5S. 580 00:24:15,210 --> 00:24:17,380 The laundry was so dysfunctional. 581 00:24:17,380 --> 00:24:19,590 They had high turnover of employees. 582 00:24:19,590 --> 00:24:22,530 The linens and gowns were not on the floors 583 00:24:22,530 --> 00:24:23,490 when they needed to be. 584 00:24:23,490 --> 00:24:27,030 The laundry bin, they didn't get to the bottom of it each day, 585 00:24:27,030 --> 00:24:27,780 the dirty laundry. 586 00:24:27,780 --> 00:24:30,240 So, the next day, more laundry was on top and so on. 587 00:24:30,240 --> 00:24:35,240 In one week, the women in the laundry who operate the laundry 588 00:24:35,240 --> 00:24:37,850 took 5S with a facilitator and a coach. 589 00:24:37,850 --> 00:24:39,950 They reorganized their laundry. 590 00:24:39,950 --> 00:24:43,970 And it went from that to now they get 591 00:24:43,970 --> 00:24:45,410 all the laundry done every day. 592 00:24:45,410 --> 00:24:46,493 I've been in this laundry. 593 00:24:46,493 --> 00:24:47,857 The women are so happy. 594 00:24:47,857 --> 00:24:49,940 They just can't-- they just want to tell you about 595 00:24:49,940 --> 00:24:51,140 their workplace. 596 00:24:51,140 --> 00:24:53,780 They've had no turnover since they did this. 597 00:24:53,780 --> 00:24:56,300 And everybody in the hospital is affected by the laundry. 598 00:24:56,300 --> 00:24:58,620 And they all knew it was a success. 599 00:24:58,620 --> 00:25:00,350 So, if you want to start in a hospital, 600 00:25:00,350 --> 00:25:04,230 start in the laundry with 5S. 601 00:25:04,230 --> 00:25:07,700 The last S is to sustain, often the hardest part. 602 00:25:07,700 --> 00:25:12,030 I like the Virginia Mason version of it, self-discipline. 603 00:25:12,030 --> 00:25:15,830 Sustainment should be-- the trap as you do this one-week event 604 00:25:15,830 --> 00:25:18,070 like I mentioned in the laundry, and then 605 00:25:18,070 --> 00:25:19,440 you drift back into old habits. 606 00:25:19,440 --> 00:25:23,090 So the hard part is keeping this as a mindset. 607 00:25:23,090 --> 00:25:24,590 Sometimes, you have to have a chart, 608 00:25:24,590 --> 00:25:27,510 but usually you should just be able to do it. 609 00:25:27,510 --> 00:25:31,150 OK, so that's your first lean experience. 610 00:25:31,150 --> 00:25:35,617 Let's now talk about why lean is being applied in these areas. 611 00:25:35,617 --> 00:25:37,700 OK, we're going to look at aerospace, health here. 612 00:25:37,700 --> 00:25:39,610 And we're to look also at New Balance shoes 613 00:25:39,610 --> 00:25:40,793 just for three comparisons. 614 00:25:40,793 --> 00:25:42,710 So aerospace is a really interesting industry. 615 00:25:42,710 --> 00:25:45,693 It's a flagship industry of the United States. 616 00:25:45,693 --> 00:25:47,110 It's one of these things that goes 617 00:25:47,110 --> 00:25:48,820 with the image of the country. 618 00:25:48,820 --> 00:25:50,770 It enables the movement of people and goods. 619 00:25:53,710 --> 00:25:56,400 It enables communication. 620 00:25:56,400 --> 00:25:59,150 It's critical to national security. 621 00:25:59,150 --> 00:26:02,110 And it's a source of inspiration for many people 622 00:26:02,110 --> 00:26:03,880 for exploration. 623 00:26:03,880 --> 00:26:07,930 Now, why did aerospace turn to adopting lean? 624 00:26:07,930 --> 00:26:12,750 Here's an industry where we think we're the world's leader. 625 00:26:12,750 --> 00:26:15,063 And I pause because we may not be, but we think we are. 626 00:26:15,063 --> 00:26:16,230 But why did we turn to lean? 627 00:26:16,230 --> 00:26:18,860 Well, here's why. 628 00:26:18,860 --> 00:26:21,200 This is a study that came out of the Sloan School 629 00:26:21,200 --> 00:26:23,960 by Jim Utterback that shows the natural progression 630 00:26:23,960 --> 00:26:27,070 of many different industries plotted 631 00:26:27,070 --> 00:26:30,032 by the number of companies in a particular industry. 632 00:26:30,032 --> 00:26:31,490 So this is the typewriter industry. 633 00:26:31,490 --> 00:26:35,320 So it started in the late 1870s, and companies came in. 634 00:26:35,320 --> 00:26:37,330 They reached a peak of about 80 companies. 635 00:26:37,330 --> 00:26:40,150 And then somewhere they reached a peak around 1910. 636 00:26:40,150 --> 00:26:42,310 And then the number of companies started declining. 637 00:26:42,310 --> 00:26:45,880 And, of course, there's probably no typewriter companies now. 638 00:26:45,880 --> 00:26:46,450 What happens? 639 00:26:46,450 --> 00:26:49,900 Well, this phase, this is where the product architecture 640 00:26:49,900 --> 00:26:52,180 and product characteristics are not set. 641 00:26:52,180 --> 00:26:55,240 So many inventors come up with new ways of doing things. 642 00:26:55,240 --> 00:26:58,570 Eventually, somehow, the best design emerges. 643 00:26:58,570 --> 00:27:01,450 And that's where the market consolidates around. 644 00:27:01,450 --> 00:27:04,000 And then, instead, there's not really real opportunities 645 00:27:04,000 --> 00:27:04,750 for new companies. 646 00:27:04,750 --> 00:27:07,720 What happens is companies buy up other companies that emerge. 647 00:27:07,720 --> 00:27:09,160 And, at this point, it's very hard 648 00:27:09,160 --> 00:27:10,810 to change the product architecture. 649 00:27:10,810 --> 00:27:15,432 This keyboard we all use came out of this era. 650 00:27:15,432 --> 00:27:17,890 It's pretty well known that there's more efficient keyboard 651 00:27:17,890 --> 00:27:22,300 layouts, but it's impossible to change that now. 652 00:27:22,300 --> 00:27:24,910 It's impossible to change it because it's the standard. 653 00:27:24,910 --> 00:27:28,810 OK, here's the automobile industry, same kind of thing 654 00:27:28,810 --> 00:27:29,540 here. 655 00:27:29,540 --> 00:27:33,790 The main product architecture was the enclosed steel body. 656 00:27:33,790 --> 00:27:34,990 Here's aerospace. 657 00:27:34,990 --> 00:27:37,195 Now, this is representative aerospace. 658 00:27:37,195 --> 00:27:40,240 So it's probably-- it's just some of the major companies, 659 00:27:40,240 --> 00:27:43,600 but, throughout the 1900s up to about 1960, 660 00:27:43,600 --> 00:27:45,790 we had a growth of the number of companies. 661 00:27:45,790 --> 00:27:51,610 Then along came something that looks like a 747, 707, 662 00:27:51,610 --> 00:27:52,390 and other things. 663 00:27:52,390 --> 00:27:54,650 And we sort of reached the product architecture. 664 00:27:54,650 --> 00:27:58,420 And then we would have gone on this decline just as companies. 665 00:27:58,420 --> 00:28:01,420 But we get to this point here, and there's a plateau. 666 00:28:01,420 --> 00:28:03,610 We're in the Cold War. 667 00:28:03,610 --> 00:28:05,930 And the government, for strategic reasons, 668 00:28:05,930 --> 00:28:07,540 wanted to keep a big industrial base. 669 00:28:07,540 --> 00:28:10,150 So they invested in that industrial base. 670 00:28:10,150 --> 00:28:13,450 When the Cold War was over, the Secretary of Defense 671 00:28:13,450 --> 00:28:16,280 invited all the CEOs of the major aerospace companies 672 00:28:16,280 --> 00:28:16,780 to dinner. 673 00:28:16,780 --> 00:28:18,310 It's called "The Last Supper." 674 00:28:18,310 --> 00:28:21,623 And he said, we don't need this many companies. 675 00:28:21,623 --> 00:28:24,040 And so we're not going to have as many, but it's up to you 676 00:28:24,040 --> 00:28:24,830 to sort it out. 677 00:28:24,830 --> 00:28:26,413 We'll let the marketplace sort it out. 678 00:28:26,413 --> 00:28:31,310 So Boeing buys McDonnell Douglas, so on, and so forth. 679 00:28:31,310 --> 00:28:34,340 And we have now consolidation and fewer aerospace companies. 680 00:28:34,340 --> 00:28:38,110 Had we not had the Cold War, we probably would have done this. 681 00:28:38,110 --> 00:28:43,870 But here's where aerospace-- here's where LAI started. 682 00:28:43,870 --> 00:28:48,520 We had an industry, which was inefficient 683 00:28:48,520 --> 00:28:51,610 and couldn't survive in the new world. 684 00:28:51,610 --> 00:28:54,300 And so they turned to lean. 685 00:28:54,300 --> 00:28:55,902 So we had a company with-- 686 00:28:55,902 --> 00:28:57,360 companies that have mature products 687 00:28:57,360 --> 00:28:59,310 can't survive on a business strategy that's 688 00:28:59,310 --> 00:29:02,720 designed for early growth. 689 00:29:02,720 --> 00:29:04,820 Here's one of the things that happens. 690 00:29:04,820 --> 00:29:06,635 In an early phase, when there's not-- 691 00:29:06,635 --> 00:29:08,510 when the competition really hasn't developed, 692 00:29:08,510 --> 00:29:10,790 you can charge what you want. 693 00:29:10,790 --> 00:29:14,630 You can charge what you want for a new device. 694 00:29:14,630 --> 00:29:16,280 And then you subtract your costs, 695 00:29:16,280 --> 00:29:18,050 and you get whatever profit. 696 00:29:18,050 --> 00:29:20,570 Competition builds up, or the government 697 00:29:20,570 --> 00:29:23,733 says we're not going to pay as much for airplanes anymore. 698 00:29:23,733 --> 00:29:26,810 OK, the customer sets the price. 699 00:29:26,810 --> 00:29:30,680 The only way for you to make a profit is to reduce your costs. 700 00:29:30,680 --> 00:29:33,500 So you have to become more efficient. 701 00:29:33,500 --> 00:29:36,723 It's just the way it is, or you don't survive. 702 00:29:36,723 --> 00:29:39,140 Here's an example of some of the problems in the aerospace 703 00:29:39,140 --> 00:29:40,760 industry. 704 00:29:40,760 --> 00:29:42,500 Here are three programs-- 705 00:29:42,500 --> 00:29:44,750 the second block of the GPS satellites, 706 00:29:44,750 --> 00:29:47,960 the Joint Strike Fighter, Boeing 787. 707 00:29:47,960 --> 00:29:51,760 These are new airplanes, years behind schedule, one, two, 708 00:29:51,760 --> 00:29:57,590 three, four, billion dollars overrun, $12 billion 709 00:29:57,590 --> 00:30:00,470 beyond the development costs. 710 00:30:00,470 --> 00:30:03,650 The price per unit, they're going to buy a lot of F-35's. 711 00:30:03,650 --> 00:30:07,220 The price has doubled, and it's still in trouble. 712 00:30:07,220 --> 00:30:09,680 Other programs where their costs and schedule is overrun is 713 00:30:09,680 --> 00:30:11,450 the F-22 and so on, the A340-- 714 00:30:11,450 --> 00:30:13,940 A380, so on. 715 00:30:13,940 --> 00:30:17,510 This is what's called the burning platform. 716 00:30:17,510 --> 00:30:19,340 The paradigm here is people adopt lean 717 00:30:19,340 --> 00:30:21,420 when the platform they're staying on is burning. 718 00:30:21,420 --> 00:30:24,830 And, if they don't do something, they're going to disappear. 719 00:30:24,830 --> 00:30:26,990 Now, there are so many aerospace programs 720 00:30:26,990 --> 00:30:29,600 which are executed very well. 721 00:30:29,600 --> 00:30:31,760 And we've learned a lot from studying those. 722 00:30:31,760 --> 00:30:34,100 So I don't want to say the aerospace can't do anything, 723 00:30:34,100 --> 00:30:36,750 but there are a lot of problems with the aerospace programs. 724 00:30:36,750 --> 00:30:40,840 Health care, there was a book published in 2003 called 725 00:30:40,840 --> 00:30:42,553 Crossing the Quality Chasm. 726 00:30:42,553 --> 00:30:44,470 It was published by the Institute of Medicine. 727 00:30:44,470 --> 00:30:47,470 And the paradigm here was this is the health 728 00:30:47,470 --> 00:30:48,910 care we're delivering. 729 00:30:48,910 --> 00:30:51,580 This is the health care we know how to deliver. 730 00:30:51,580 --> 00:30:55,688 And there's such a wide gap in quality of health care 731 00:30:55,688 --> 00:30:57,730 that we have a big chasm between what we're doing 732 00:30:57,730 --> 00:30:59,530 and what we should be doing. 733 00:30:59,530 --> 00:31:02,250 And they outlined what the objectives of health care are 734 00:31:02,250 --> 00:31:03,720 and that these are not new aims. 735 00:31:03,720 --> 00:31:06,312 These are aims that have been there for many years. 736 00:31:06,312 --> 00:31:07,770 And most people go into health care 737 00:31:07,770 --> 00:31:10,582 because they want to do this. 738 00:31:10,582 --> 00:31:12,540 Probably, all of you guys are going into health 739 00:31:12,540 --> 00:31:13,748 care because you don't want-- 740 00:31:13,748 --> 00:31:15,582 you probably didn't say I picked health care 741 00:31:15,582 --> 00:31:17,850 because it's an inefficient system that I can work in. 742 00:31:17,850 --> 00:31:19,475 You picked health care because you want 743 00:31:19,475 --> 00:31:20,950 to help people and do things. 744 00:31:20,950 --> 00:31:23,490 So we need to do that. 745 00:31:23,490 --> 00:31:24,690 OK, but what are some signs? 746 00:31:24,690 --> 00:31:28,710 Well, I think we've all heard about the cost of health care. 747 00:31:28,710 --> 00:31:30,713 There are different metrics here. 748 00:31:30,713 --> 00:31:32,880 I don't think we have to go through those in detail. 749 00:31:32,880 --> 00:31:34,330 There are quality issues. 750 00:31:34,330 --> 00:31:36,100 This is the one that was staggering to me, 751 00:31:36,100 --> 00:31:40,410 the study done in 1999 that between about 50,000 752 00:31:40,410 --> 00:31:42,750 and 100,000 people a year in our country 753 00:31:42,750 --> 00:31:46,680 die from perfectly preventable medical mistakes. 754 00:31:46,680 --> 00:31:50,940 OK, that's more people than die on the highway. 755 00:31:50,940 --> 00:31:53,560 And, by the way, that number still has not changed too much. 756 00:31:53,560 --> 00:31:55,920 It's gotten a little bit better maybe, but not changed. 757 00:31:55,920 --> 00:31:59,497 Many people don't have access to health care. 758 00:31:59,497 --> 00:32:01,080 This slide is a little bit out of date 759 00:32:01,080 --> 00:32:04,540 because of the Affordable Health Care Act. 760 00:32:04,540 --> 00:32:08,565 And 60% of the doctors in the survey 761 00:32:08,565 --> 00:32:10,690 said they wouldn't recommend going into health care 762 00:32:10,690 --> 00:32:12,490 to their children. 763 00:32:12,490 --> 00:32:14,970 Here we've got Bo is an emergency doctor, emergency 764 00:32:14,970 --> 00:32:15,790 medicine doctor. 765 00:32:15,790 --> 00:32:19,140 Is 50% of your time spent on paperwork? 766 00:32:19,140 --> 00:32:20,648 AUDIENCE: On waste on a good day. 767 00:32:20,648 --> 00:32:22,440 EARLL MURMAN: On a good day, 50% is wasted. 768 00:32:22,440 --> 00:32:25,080 And Susan is a nurse. 769 00:32:25,080 --> 00:32:27,600 Many studies have shown we have a big shortage of nurses 770 00:32:27,600 --> 00:32:28,740 coming up here. 771 00:32:28,740 --> 00:32:32,310 OK, so we've got some problems, as you all know about. 772 00:32:32,310 --> 00:32:34,140 So, basically, what we say in health care 773 00:32:34,140 --> 00:32:35,430 is there's a value crisis. 774 00:32:35,430 --> 00:32:37,710 Value is defined as what you deliver 775 00:32:37,710 --> 00:32:39,930 and divided by what you pay for. 776 00:32:39,930 --> 00:32:42,720 And roughly about half the health care 777 00:32:42,720 --> 00:32:45,870 we know how to deliver to the patient gets delivered. 778 00:32:45,870 --> 00:32:50,610 And the cost, this is of GDP. 779 00:32:50,610 --> 00:32:54,155 In 2007, we were spending 16% of our gross domestic product 780 00:32:54,155 --> 00:32:54,780 on health care. 781 00:32:54,780 --> 00:32:57,330 In 2050, it's supposed to be 37%. 782 00:32:57,330 --> 00:33:01,260 That's just unsustainable and the same with Medicare. 783 00:33:01,260 --> 00:33:03,780 So we hope that lean thinking can 784 00:33:03,780 --> 00:33:06,490 be one piece of a puzzle of improving health care. 785 00:33:06,490 --> 00:33:09,360 It's a complicated-- it's a complicated field. 786 00:33:09,360 --> 00:33:13,110 And there's no simple solution, but lean can help. 787 00:33:13,110 --> 00:33:15,000 OK, so those are two industries as 788 00:33:15,000 --> 00:33:16,250 to why they're applying lean. 789 00:33:16,250 --> 00:33:17,670 Now, let's talk a little bit about what 790 00:33:17,670 --> 00:33:19,378 is an enterprise because, in this course, 791 00:33:19,378 --> 00:33:22,840 we very much focus on applying lean across an enterprise, 792 00:33:22,840 --> 00:33:27,010 not just a manufacturing or a clinic thing. 793 00:33:27,010 --> 00:33:29,980 So an enterprise is broadly defined 794 00:33:29,980 --> 00:33:31,630 as one or more organizations having 795 00:33:31,630 --> 00:33:34,060 related activities, a unified operation, 796 00:33:34,060 --> 00:33:36,740 and a common business purpose. 797 00:33:36,740 --> 00:33:40,030 And so you might have, in an engineering enterprise, 798 00:33:40,030 --> 00:33:44,360 customers, engineering products, product development 799 00:33:44,360 --> 00:33:48,140 or engineering, manufacturing, suppliers, finance, and so on 800 00:33:48,140 --> 00:33:50,640 and support. 801 00:33:50,640 --> 00:33:53,740 And enterprises can be pretty complex. 802 00:33:53,740 --> 00:33:57,040 So it's hard to define the boundaries in an enterprise. 803 00:33:57,040 --> 00:33:58,530 It's somewhat contextual. 804 00:33:58,530 --> 00:34:04,240 You might draw it around your table here as an enterprise, 805 00:34:04,240 --> 00:34:07,180 but most enterprises have partners 806 00:34:07,180 --> 00:34:11,580 that they have close operating agreements with. 807 00:34:11,580 --> 00:34:16,429 And so we call the core enterprise the organization 808 00:34:16,429 --> 00:34:24,170 plus its most closely related partners that work with them. 809 00:34:24,170 --> 00:34:26,540 And then, beyond that, there's an extended enterprise, 810 00:34:26,540 --> 00:34:31,570 which is all their suppliers and actually their customers too. 811 00:34:31,570 --> 00:34:35,600 And also their community and regulatory agencies and things 812 00:34:35,600 --> 00:34:38,929 like that all can affect their enterprise. 813 00:34:38,929 --> 00:34:46,370 So a company like Boeing has maybe 2,000 suppliers. 814 00:34:46,370 --> 00:34:47,989 And, by the way, those 2,000 suppliers 815 00:34:47,989 --> 00:34:51,290 are suppliers to Airbus and Embraer. 816 00:34:51,290 --> 00:34:54,210 And so this gets very complicated. 817 00:34:54,210 --> 00:34:57,660 OK, so who are the stakeholders of an enterprise? 818 00:34:57,660 --> 00:34:59,400 They're any group or individual who 819 00:34:59,400 --> 00:35:03,230 can affect or is affected by the organizational objective. 820 00:35:03,230 --> 00:35:09,470 So you have your employees, partners, suppliers, unions, 821 00:35:09,470 --> 00:35:11,090 customers, shareholders. 822 00:35:11,090 --> 00:35:13,460 These are all stakeholders who can affect or are 823 00:35:13,460 --> 00:35:16,440 affected by your enterprise. 824 00:35:16,440 --> 00:35:19,903 Jennifer, at Boston Medical Center, do you have any-- 825 00:35:19,903 --> 00:35:22,320 I don't know how long you've been at Boston Medical Center 826 00:35:22,320 --> 00:35:23,030 and whether you-- 827 00:35:25,565 --> 00:35:28,430 do any of these kind of things resonate with you 828 00:35:28,430 --> 00:35:30,763 in terms of who your stakeholders are there? 829 00:35:30,763 --> 00:35:31,430 What department? 830 00:35:31,430 --> 00:35:31,970 You're in radiology? 831 00:35:31,970 --> 00:35:32,750 AUDIENCE: Radiology. 832 00:35:32,750 --> 00:35:33,920 I've been there for five years. 833 00:35:33,920 --> 00:35:35,630 So hopefully I know a little bit about-- 834 00:35:35,630 --> 00:35:37,838 EARLL MURMAN: So you have some suppliers of CAT scans 835 00:35:37,838 --> 00:35:38,963 and all this kind of stuff? 836 00:35:38,963 --> 00:35:39,770 AUDIENCE: Oh, sure. 837 00:35:39,770 --> 00:35:42,350 Sure, I mean, I was actually thinking about the broader 838 00:35:42,350 --> 00:35:44,520 sense in terms of how the community health centers 839 00:35:44,520 --> 00:35:45,020 [INAUDIBLE]. 840 00:35:45,020 --> 00:35:47,420 So we, for instance, serve the emergency room. 841 00:35:47,420 --> 00:35:48,430 We serve the inpatients. 842 00:35:48,430 --> 00:35:50,810 We serve our own BMC outpatients. 843 00:35:50,810 --> 00:35:54,760 Then we also serve a very large network of community health 844 00:35:54,760 --> 00:35:56,440 centers who send all of their patients 845 00:35:56,440 --> 00:36:00,450 to us for imaging that they can't provide. 846 00:36:00,450 --> 00:36:04,080 Then there's the technical arena of all of the-- 847 00:36:04,080 --> 00:36:09,010 GE provides most of our equipment, 848 00:36:09,010 --> 00:36:11,070 but we have different suppliers for our MRIs 849 00:36:11,070 --> 00:36:12,630 and our CTs and our ultrasounds. 850 00:36:12,630 --> 00:36:14,820 Those are all different corporations. 851 00:36:14,820 --> 00:36:17,857 And then they all have their own technical support services. 852 00:36:17,857 --> 00:36:19,690 EARLL MURMAN: I think you've made the point. 853 00:36:19,690 --> 00:36:20,315 AUDIENCE: Yeah. 854 00:36:20,315 --> 00:36:21,318 [LAUGHTER] 855 00:36:21,318 --> 00:36:23,360 EARLL MURMAN: So there are a lot of stakeholders. 856 00:36:23,360 --> 00:36:27,990 And each of these stakeholders-- 857 00:36:27,990 --> 00:36:30,080 this is a very high-level definition of value. 858 00:36:30,080 --> 00:36:31,730 We're going to come in the next module 859 00:36:31,730 --> 00:36:33,770 to a much more specific definition of value. 860 00:36:33,770 --> 00:36:36,810 This is a very high level, but every one of these stakeholders 861 00:36:36,810 --> 00:36:38,670 expects some value from the enterprise 862 00:36:38,670 --> 00:36:43,070 just like Jennifer just outlined. 863 00:36:43,070 --> 00:36:45,920 And, in return, they're supposed to contribute some value 864 00:36:45,920 --> 00:36:47,810 to that enterprise. 865 00:36:47,810 --> 00:36:51,020 So there's kind of a value proposition here. 866 00:36:51,020 --> 00:36:53,900 A value is how various stakeholders 867 00:36:53,900 --> 00:36:55,630 find worth, utility, or a benefit 868 00:36:55,630 --> 00:36:57,980 or reward in exchange for their respective contribution 869 00:36:57,980 --> 00:36:59,250 to the enterprise. 870 00:36:59,250 --> 00:37:02,360 So there's this kind of value relationship 871 00:37:02,360 --> 00:37:05,720 going on here in an enterprise. 872 00:37:05,720 --> 00:37:07,220 And now what's a lean enterprise? 873 00:37:07,220 --> 00:37:09,320 When we started this work, we said 874 00:37:09,320 --> 00:37:12,110 this is a lean enterprise course or a lean enterprise 875 00:37:12,110 --> 00:37:13,130 initiative. 876 00:37:13,130 --> 00:37:15,300 People said, well, what is a lean enterprise? 877 00:37:15,300 --> 00:37:16,817 It turns out that's a good question. 878 00:37:16,817 --> 00:37:17,900 And here's our definition. 879 00:37:17,900 --> 00:37:19,410 It's an enterprise of-- 880 00:37:19,410 --> 00:37:22,370 it's an integrated entity that officially creates 881 00:37:22,370 --> 00:37:24,920 value for its multiple stakeholders 882 00:37:24,920 --> 00:37:27,020 by employing the principles and practices we're 883 00:37:27,020 --> 00:37:28,270 going to cover in this course. 884 00:37:30,920 --> 00:37:34,390 Now, these principles apply across the entire enterprise. 885 00:37:34,390 --> 00:37:37,360 So, in an engineering enterprise, 886 00:37:37,360 --> 00:37:39,610 you have generally what's called the product lifecycle 887 00:37:39,610 --> 00:37:44,820 from the initial concept of a product like this 888 00:37:44,820 --> 00:37:48,187 through the design, definition, design, getting 889 00:37:48,187 --> 00:37:49,770 the supply chain lined up, production, 890 00:37:49,770 --> 00:37:51,100 and distribution of support. 891 00:37:51,100 --> 00:37:54,060 That's what generates money for the enterprise, 892 00:37:54,060 --> 00:37:55,740 selling this product. 893 00:37:55,740 --> 00:38:01,870 But it also has finance, information technology, 894 00:38:01,870 --> 00:38:04,850 human resources, various support functions which are needed, 895 00:38:04,850 --> 00:38:06,820 and the leadership processes. 896 00:38:06,820 --> 00:38:08,680 And the point is lean applies to all these. 897 00:38:08,680 --> 00:38:10,685 It doesn't apply just to manufacturing. 898 00:38:10,685 --> 00:38:12,310 It applies across the whole enterprise. 899 00:38:12,310 --> 00:38:15,313 And we'll show you an example of that in a minute. 900 00:38:15,313 --> 00:38:16,980 In health care, it's very much the same. 901 00:38:16,980 --> 00:38:18,688 Instead of having the product life cycle, 902 00:38:18,688 --> 00:38:21,310 you have the patient life cycle. 903 00:38:21,310 --> 00:38:23,950 So lean doesn't apply just to treatment. 904 00:38:23,950 --> 00:38:28,090 It applies from preventive monitoring 905 00:38:28,090 --> 00:38:30,070 through long-term care management. 906 00:38:30,070 --> 00:38:31,695 We should really be thinking-- in fact, 907 00:38:31,695 --> 00:38:34,195 there are people who feel that the health care system should 908 00:38:34,195 --> 00:38:35,310 be reorganized along-- 909 00:38:38,010 --> 00:38:40,460 let's call them disease pathways or something 910 00:38:40,460 --> 00:38:45,168 like that, instead of segmented into imaging and so on. 911 00:38:45,168 --> 00:38:47,210 And again you have the same supporting functions. 912 00:38:47,210 --> 00:38:49,970 And I'm really glad that a couple of our students here 913 00:38:49,970 --> 00:38:53,150 in health care are administrative fellows, 914 00:38:53,150 --> 00:38:55,040 looking into health care administration. 915 00:38:55,040 --> 00:38:57,860 That's really important. 916 00:38:57,860 --> 00:39:00,410 OK, so does it work? 917 00:39:00,410 --> 00:39:04,320 Well, I told you how LAI got started in 1992. 918 00:39:04,320 --> 00:39:06,980 And it took us 10 years to respond to the general 919 00:39:06,980 --> 00:39:08,540 with a book we wrote. 920 00:39:08,540 --> 00:39:11,180 And we said-- after 10 years, we said to the general-- 921 00:39:11,180 --> 00:39:14,390 by then, we'd been through three or four generals. 922 00:39:14,390 --> 00:39:19,120 And we said, yes, lean does apply to aerospace if we take 923 00:39:19,120 --> 00:39:20,740 it at the enterprise level. 924 00:39:20,740 --> 00:39:22,930 If it's applied to all the functions of aerospace, 925 00:39:22,930 --> 00:39:26,820 not just to manufacturing. 926 00:39:26,820 --> 00:39:31,330 OK, here's a really good example of the F-18 aircraft. 927 00:39:31,330 --> 00:39:36,180 This is a fighter aircraft for the Navy. 928 00:39:36,180 --> 00:39:38,190 They were going through an upgrade to the model 929 00:39:38,190 --> 00:39:40,990 E/F. It was an upgrade, but it was actually 930 00:39:40,990 --> 00:39:42,090 a completely new aircraft. 931 00:39:42,090 --> 00:39:44,310 It was 25% bigger, but it was sold to Congress 932 00:39:44,310 --> 00:39:48,850 as an upgrade, $5 billion budget, 8 and 1/2 years 933 00:39:48,850 --> 00:39:52,390 to do the engineering and design. 934 00:39:52,390 --> 00:39:57,080 The program performed on schedule within cost, 935 00:39:57,080 --> 00:39:59,990 met all its technical requirements, 936 00:39:59,990 --> 00:40:02,510 very unusual compared to those burning platform programs 937 00:40:02,510 --> 00:40:03,320 I showed you. 938 00:40:03,320 --> 00:40:06,230 And, when we went in and studied it and looked 939 00:40:06,230 --> 00:40:08,930 at what they'd done with what the lean principles are, 940 00:40:08,930 --> 00:40:10,643 they were a lean enterprise. 941 00:40:10,643 --> 00:40:12,560 They didn't call themselves a lean enterprise, 942 00:40:12,560 --> 00:40:13,700 but they had done this. 943 00:40:13,700 --> 00:40:16,070 And, in fact, we went and gave them this briefing. 944 00:40:16,070 --> 00:40:19,460 And we said to them, we've concluded your lean enterprise. 945 00:40:19,460 --> 00:40:22,240 And they said, whoa, no, we're not. 946 00:40:22,240 --> 00:40:24,220 We have so much more to do. 947 00:40:24,220 --> 00:40:26,380 Don't tell us we're a lean enterprise. 948 00:40:26,380 --> 00:40:30,560 That's the attitude you want, wonderful program. 949 00:40:30,560 --> 00:40:33,380 Here's a completely different area, electronics, 950 00:40:33,380 --> 00:40:34,190 Rockwell Collins. 951 00:40:34,190 --> 00:40:37,880 We're going to come back to them on Thursday with a case 952 00:40:37,880 --> 00:40:42,190 study of Rockwell Collins, but they applied lean thinking 953 00:40:42,190 --> 00:40:45,100 across their whole company in the office environment, 954 00:40:45,100 --> 00:40:48,670 as well as in the factory, and the great results. 955 00:40:48,670 --> 00:40:51,970 And we'll see data from them on their operating performance 956 00:40:51,970 --> 00:40:52,930 tomorrow. 957 00:40:52,930 --> 00:40:55,700 Health care, many examples in health care, 958 00:40:55,700 --> 00:40:59,680 Susan will give you a lot more when she talks on Thursday, 959 00:40:59,680 --> 00:41:00,610 but just hear a few. 960 00:41:00,610 --> 00:41:03,490 There's a number of books out now. 961 00:41:03,490 --> 00:41:05,920 ThedaCare in Wisconsin, waiting time 962 00:41:05,920 --> 00:41:07,420 from when you first call to when you 963 00:41:07,420 --> 00:41:10,540 get scheduled for orthopedic surgery went from 14 weeks 964 00:41:10,540 --> 00:41:13,570 to 31 hours. 965 00:41:13,570 --> 00:41:15,183 Here's a hospital in Pennsylvania 966 00:41:15,183 --> 00:41:16,600 where they reduced the readmission 967 00:41:16,600 --> 00:41:20,140 rate for COPD patients. 968 00:41:20,140 --> 00:41:23,050 Children's Hospital in Seattle reduced its capital 969 00:41:23,050 --> 00:41:26,410 expenditures by $180 million by using lean improvements. 970 00:41:26,410 --> 00:41:28,990 And Susan mentioned about architecture. 971 00:41:28,990 --> 00:41:32,740 That's becoming a big area for saving in capital improvements. 972 00:41:32,740 --> 00:41:35,230 And here's a hospital in Nebraska 973 00:41:35,230 --> 00:41:38,320 where it reduced the time it took to turn around the lab 974 00:41:38,320 --> 00:41:43,270 results over a six-year period by 72% 975 00:41:43,270 --> 00:41:48,540 by using the same people and the same facilities. 976 00:41:48,540 --> 00:41:50,010 OK, here's the New Balance story. 977 00:41:50,010 --> 00:41:52,980 We're going to see a video on this shortly, 978 00:41:52,980 --> 00:41:54,570 but they're a shoe company. 979 00:41:54,570 --> 00:41:57,060 They're the only company that manufactures athletic shoes 980 00:41:57,060 --> 00:41:58,610 in the United States. 981 00:41:58,610 --> 00:42:03,777 OK, it used to take them eight days to make a pair of shoes. 982 00:42:03,777 --> 00:42:04,860 Now, it takes three hours. 983 00:42:08,322 --> 00:42:10,280 They're actually doing the same amount of work. 984 00:42:10,280 --> 00:42:13,203 So here they were only-- of the eight days, only 2/10 985 00:42:13,203 --> 00:42:14,870 of a percent of the time were they doing 986 00:42:14,870 --> 00:42:18,250 anything useful on the shoe. 987 00:42:18,250 --> 00:42:23,570 The number of items they have to have in inventory went from-- 988 00:42:23,570 --> 00:42:26,600 well, inventory turn is the number 989 00:42:26,600 --> 00:42:28,280 of times you turn over the inventory. 990 00:42:28,280 --> 00:42:31,160 Here it took from 3.5 to 13. 991 00:42:31,160 --> 00:42:32,712 They can make a pair of shoes. 992 00:42:32,712 --> 00:42:34,670 They get a call saying we need some more shoes. 993 00:42:34,670 --> 00:42:37,520 They can ship it in three days. 994 00:42:37,520 --> 00:42:38,840 Floor space reduced. 995 00:42:38,840 --> 00:42:41,090 Production went up and so on. 996 00:42:41,090 --> 00:42:43,130 Let's just talk about this. 997 00:42:43,130 --> 00:42:48,960 Kanban, Japanese word, who's ever heard the word kanban? 998 00:42:48,960 --> 00:42:51,300 One, Catherine has heard kanban. 999 00:42:51,300 --> 00:42:53,460 Kind of a strange word, isn't it? 1000 00:42:53,460 --> 00:42:57,840 How many of you at home keep a shopping list? 1001 00:42:57,840 --> 00:43:00,150 OK, so tell me. 1002 00:43:00,150 --> 00:43:03,360 How do you make your shopping list, Whitney? 1003 00:43:03,360 --> 00:43:05,825 AUDIENCE: Like in terms of which ones? 1004 00:43:05,825 --> 00:43:07,450 Well, now, I use an app for everything. 1005 00:43:07,450 --> 00:43:09,082 So I don't [INAUDIBLE]. 1006 00:43:09,082 --> 00:43:11,410 On the weekends, we'll kind of pick 1007 00:43:11,410 --> 00:43:12,790 what things I'm going to do. 1008 00:43:12,790 --> 00:43:14,230 And it forms a list for me. 1009 00:43:14,230 --> 00:43:16,350 So I carry it around with me everywhere. 1010 00:43:16,350 --> 00:43:19,290 EARLL MURMAN: So how do you make that list of things you-- 1011 00:43:19,290 --> 00:43:20,958 well, let's say grocery shopping, just 1012 00:43:20,958 --> 00:43:21,750 to take an example. 1013 00:43:21,750 --> 00:43:24,210 So grocery shopping, what do you put on your list? 1014 00:43:24,210 --> 00:43:27,210 AUDIENCE: I pick the recipes, and it creates a list for me. 1015 00:43:27,210 --> 00:43:28,260 EARLL MURMAN: OK, so you pick what you need. 1016 00:43:28,260 --> 00:43:28,885 AUDIENCE: Yeah. 1017 00:43:28,885 --> 00:43:30,180 EARLL MURMAN: OK, anybody else? 1018 00:43:30,180 --> 00:43:32,433 How do you do your shopping list, Tony? 1019 00:43:32,433 --> 00:43:33,600 AUDIENCE: I go to my fridge. 1020 00:43:33,600 --> 00:43:38,520 And I look at what is missing I go to my cupboard 1021 00:43:38,520 --> 00:43:40,058 and see if there are things that are 1022 00:43:40,058 --> 00:43:41,350 missing that I need to replace. 1023 00:43:41,350 --> 00:43:43,020 And I write down the list. 1024 00:43:43,020 --> 00:43:44,700 EARLL MURMAN: So he's got 5S working. 1025 00:43:44,700 --> 00:43:47,158 He can look at his cupboard and see he's missing something, 1026 00:43:47,158 --> 00:43:47,700 right? 1027 00:43:47,700 --> 00:43:49,740 OK, you have some kind of standardized way of storing 1028 00:43:49,740 --> 00:43:50,550 things in your cupboard. 1029 00:43:50,550 --> 00:43:51,000 AUDIENCE: Yeah. 1030 00:43:51,000 --> 00:43:52,320 EARLL MURMAN: OK, and you spot what you're missing, 1031 00:43:52,320 --> 00:43:54,200 and you put it on your list again. 1032 00:43:54,200 --> 00:43:55,140 Those are kanbans. 1033 00:43:55,140 --> 00:43:58,830 OK, kanban is nothing more than a queuing system, 1034 00:43:58,830 --> 00:44:01,020 a visual system, to indicate what 1035 00:44:01,020 --> 00:44:03,750 material parts or other information you 1036 00:44:03,750 --> 00:44:07,272 need to keep going. 1037 00:44:07,272 --> 00:44:08,980 In a factory environment, typically, it's 1038 00:44:08,980 --> 00:44:12,400 a card, a barcoded card of some kind. 1039 00:44:12,400 --> 00:44:19,390 And, at some station where they're manufacturing something 1040 00:44:19,390 --> 00:44:20,830 or, in a health care environment, 1041 00:44:20,830 --> 00:44:25,860 where they need some supplies, they need more of that. 1042 00:44:25,860 --> 00:44:27,900 And so they make a little system. 1043 00:44:27,900 --> 00:44:29,600 And then someone delivers it. 1044 00:44:29,600 --> 00:44:33,590 OK, now, the opposite is, instead 1045 00:44:33,590 --> 00:44:35,527 of deciding what recipes you have 1046 00:44:35,527 --> 00:44:37,610 and what you're going to buy, you go to the store, 1047 00:44:37,610 --> 00:44:39,110 and you say, oh, this is on special. 1048 00:44:39,110 --> 00:44:42,440 I'm going to load up on whatever, hamburger or toilet 1049 00:44:42,440 --> 00:44:44,000 paper or ketchup. 1050 00:44:44,000 --> 00:44:45,583 OK, what you're doing is you're buying 1051 00:44:45,583 --> 00:44:47,208 because you're getting volume discount, 1052 00:44:47,208 --> 00:44:48,350 but you may not need it. 1053 00:44:48,350 --> 00:44:50,420 So a kanban system is one where you only 1054 00:44:50,420 --> 00:44:53,810 deliver what's needed to whoever is doing the work. 1055 00:44:53,810 --> 00:44:57,800 And there's some cue, usually a visual cue. 1056 00:44:57,800 --> 00:45:00,410 It can be a barcoded card. 1057 00:45:00,410 --> 00:45:05,210 It could be a bin that's empty, some space on the floor that I 1058 00:45:05,210 --> 00:45:07,100 need a new delivery there. 1059 00:45:07,100 --> 00:45:10,100 In an engineering environment or a work office environment, 1060 00:45:10,100 --> 00:45:12,230 it might be an empty inbox. 1061 00:45:12,230 --> 00:45:15,560 Also, an interesting kanban I saw, 1062 00:45:15,560 --> 00:45:20,210 this was a factory at McDonnell Douglas in East St. Louis. 1063 00:45:20,210 --> 00:45:22,850 And they have supplies, something coming 1064 00:45:22,850 --> 00:45:24,620 from a company in California. 1065 00:45:24,620 --> 00:45:28,730 They make a packaging container that this product went into. 1066 00:45:28,730 --> 00:45:30,230 And so the company is in California. 1067 00:45:30,230 --> 00:45:31,730 The factory is in East St. Louis. 1068 00:45:31,730 --> 00:45:35,640 And on the ceiling is a camera looking down 1069 00:45:35,640 --> 00:45:38,922 at the number of these boxes that are there. 1070 00:45:38,922 --> 00:45:40,380 And, when the company in California 1071 00:45:40,380 --> 00:45:43,560 sees they need more boxes, they ship them. 1072 00:45:43,560 --> 00:45:46,090 That's a kanban. 1073 00:45:46,090 --> 00:45:51,350 So Toyota implemented kanban in their production system. 1074 00:45:51,350 --> 00:45:52,700 It took them 20 years. 1075 00:45:55,310 --> 00:45:57,145 You wouldn't think it would take that long. 1076 00:45:57,145 --> 00:45:58,520 When they first started doing it, 1077 00:45:58,520 --> 00:46:00,145 they actually came to the United States 1078 00:46:00,145 --> 00:46:01,400 and saw the supermarkets. 1079 00:46:01,400 --> 00:46:04,700 And, in the supermarket, the potato chips, 1080 00:46:04,700 --> 00:46:06,740 you buy potato chips, and the shelf looks empty. 1081 00:46:06,740 --> 00:46:08,315 So the potato chip guy comes and sees 1082 00:46:08,315 --> 00:46:09,440 you need more potato chips. 1083 00:46:09,440 --> 00:46:11,793 That's where it came from, supermarkets. 1084 00:46:11,793 --> 00:46:12,710 So they introduced it. 1085 00:46:12,710 --> 00:46:14,480 It took them 10 years after they did the experiments 1086 00:46:14,480 --> 00:46:16,813 to make it across the whole company and another 10 years 1087 00:46:16,813 --> 00:46:18,830 to make it across their suppliers. 1088 00:46:18,830 --> 00:46:21,020 OK, and they continued to work on it. 1089 00:46:21,020 --> 00:46:23,160 So now think a little bit about whatever enterprise 1090 00:46:23,160 --> 00:46:24,530 you might think about. 1091 00:46:24,530 --> 00:46:26,800 Get out your colored cards here. 1092 00:46:26,800 --> 00:46:30,890 Think about where you've had some experiences. 1093 00:46:30,890 --> 00:46:33,650 How long do you think it would take to implement lean 1094 00:46:33,650 --> 00:46:34,980 in some environment? 1095 00:46:34,980 --> 00:46:41,060 You can think about your company or your department at MIT. 1096 00:46:41,060 --> 00:46:45,440 Think about lean thinking in your department. 1097 00:46:45,440 --> 00:46:48,107 Think about your parents' work environment. 1098 00:46:48,107 --> 00:46:50,690 Just pick some work environment, knowing that all the we could 1099 00:46:50,690 --> 00:46:51,800 teach you in three days, how long 1100 00:46:51,800 --> 00:46:54,403 do you think it might take to implement lean in whatever work 1101 00:46:54,403 --> 00:46:55,820 environment you're thinking about? 1102 00:46:55,820 --> 00:46:57,140 And then hold up the colored card 1103 00:46:57,140 --> 00:46:58,265 when you make up your mind. 1104 00:47:01,750 --> 00:47:03,260 OK, I don't see any blues. 1105 00:47:03,260 --> 00:47:05,990 I see a lot of yellows, a lot of greens. 1106 00:47:05,990 --> 00:47:07,850 That's good, some reds. 1107 00:47:07,850 --> 00:47:10,730 OK, so it's going to take a little while. 1108 00:47:10,730 --> 00:47:12,495 Maybe it looks like, I'd say, the bulk 1109 00:47:12,495 --> 00:47:14,370 of the numbers I have up here are five years. 1110 00:47:14,370 --> 00:47:17,690 Susan, you work with a lot of health care organizations. 1111 00:47:17,690 --> 00:47:20,210 You said you've been doing this for five years. 1112 00:47:20,210 --> 00:47:24,150 What kind of-- how long are you seeing that a typical health 1113 00:47:24,150 --> 00:47:25,330 care organization-- 1114 00:47:25,330 --> 00:47:26,788 SUSAN SHEEHY: Most of the hospitals 1115 00:47:26,788 --> 00:47:29,310 we've worked with take at least five years if not more 1116 00:47:29,310 --> 00:47:30,810 because you really have to spread it 1117 00:47:30,810 --> 00:47:32,012 throughout the organization. 1118 00:47:32,012 --> 00:47:32,970 And it takes that long. 1119 00:47:32,970 --> 00:47:36,305 You can't just teach five people and say, OK, we're lean. 1120 00:47:36,305 --> 00:47:38,370 So it's at least five years if not more. 1121 00:47:38,370 --> 00:47:39,930 And that's with an all-out effort. 1122 00:47:39,930 --> 00:47:41,305 EARLL MURMAN: At least five years 1123 00:47:41,305 --> 00:47:45,660 with an all-out effort, not a half-hearted effort. 1124 00:47:45,660 --> 00:47:48,390 OK, so this is a big commitment for an organization 1125 00:47:48,390 --> 00:47:49,240 to implement lean. 1126 00:47:49,240 --> 00:47:52,890 OK, they're not going to see quarterly bottom-line profit 1127 00:47:52,890 --> 00:47:55,050 changes, which their shareholders may 1128 00:47:55,050 --> 00:47:56,660 be looking for. 1129 00:47:56,660 --> 00:47:59,870 What are some questions that this introductory module 1130 00:47:59,870 --> 00:48:01,590 kind of brings up in your mind? 1131 00:48:01,590 --> 00:48:04,910 Or do you have comments you'd like to make or suggestions? 1132 00:48:04,910 --> 00:48:06,500 Yeah, Jennifer. 1133 00:48:06,500 --> 00:48:08,780 AUDIENCE: For the 6S activity, if you 1134 00:48:08,780 --> 00:48:11,930 had asked me to sort that stuff from the very beginning, 1135 00:48:11,930 --> 00:48:14,780 I probably would have ended up on the end page 1136 00:48:14,780 --> 00:48:17,115 first with everything in-- 1137 00:48:17,115 --> 00:48:18,760 if you just said sort these things, 1138 00:48:18,760 --> 00:48:20,638 it would have been super subselected, 1139 00:48:20,638 --> 00:48:22,430 which might just be my own personality when 1140 00:48:22,430 --> 00:48:23,570 somebody says sort. 1141 00:48:23,570 --> 00:48:27,230 So I'm a little unclear what the difference between sort, 1142 00:48:27,230 --> 00:48:30,280 standard, straighten, and standardize 1143 00:48:30,280 --> 00:48:31,113 are in that respect. 1144 00:48:31,113 --> 00:48:32,655 EARLL MURMAN: That's a good question. 1145 00:48:32,655 --> 00:48:35,040 You know, I think the sort one is, first of all, just 1146 00:48:35,040 --> 00:48:38,010 get rid of stuff that shouldn't be there. 1147 00:48:38,010 --> 00:48:41,910 And I have slides from a lot of different examples 1148 00:48:41,910 --> 00:48:46,290 of storerooms that had totally obsolete equipment in them. 1149 00:48:46,290 --> 00:48:48,990 And people were spending lots of time 1150 00:48:48,990 --> 00:48:50,953 looking for something that was not 1151 00:48:50,953 --> 00:48:52,120 all that obsolete equipment. 1152 00:48:52,120 --> 00:48:53,910 So I think the sort part is pretty quick. 1153 00:48:53,910 --> 00:48:56,820 Now, the straighten and standardize I think 1154 00:48:56,820 --> 00:49:00,240 might be done as a single step. 1155 00:49:00,240 --> 00:49:03,330 But I'm not going to-- 1156 00:49:03,330 --> 00:49:04,350 I think you're fine. 1157 00:49:04,350 --> 00:49:05,340 It's a good comment. 1158 00:49:05,340 --> 00:49:07,860 But what's amazing to me is how often 1159 00:49:07,860 --> 00:49:10,493 an organization starts with 5S. 1160 00:49:10,493 --> 00:49:11,910 I mean, you would think, why isn't 1161 00:49:11,910 --> 00:49:13,473 anybody doing it this way? 1162 00:49:13,473 --> 00:49:14,640 SUSAN SHEEHY: It's because-- 1163 00:49:14,640 --> 00:49:16,098 and we hear this term all the time. 1164 00:49:16,098 --> 00:49:17,805 It's the way we've always done it. 1165 00:49:17,805 --> 00:49:18,930 That's what we always hear. 1166 00:49:18,930 --> 00:49:20,388 Because it's the way we've always-- 1167 00:49:20,388 --> 00:49:22,860 and workarounds and do-overs have 1168 00:49:22,860 --> 00:49:24,160 been built into the system. 1169 00:49:24,160 --> 00:49:27,360 So nobody even recognizes that they're doing it. 1170 00:49:27,360 --> 00:49:29,550 It just becomes part of the daily work. 1171 00:49:29,550 --> 00:49:30,600 EARLL MURMAN: Do you have a question, Monica? 1172 00:49:30,600 --> 00:49:32,142 AUDIENCE: Yeah, I was just wondering. 1173 00:49:32,142 --> 00:49:34,540 You said that the average time was five years. 1174 00:49:34,540 --> 00:49:38,010 So I was just wondering, in our culture of immediate response 1175 00:49:38,010 --> 00:49:41,600 time and response to crisis, how do you sustain 1176 00:49:41,600 --> 00:49:43,020 an organization's interest-- 1177 00:49:43,020 --> 00:49:44,020 EARLL MURMAN: That's a-- 1178 00:49:44,020 --> 00:49:45,145 AUDIENCE: --for five years? 1179 00:49:45,145 --> 00:49:48,620 EARLL MURMAN: --really good question 1180 00:49:48,620 --> 00:49:49,820 I'll answer what I can. 1181 00:49:49,820 --> 00:49:53,120 And Bo and Sue and others can pipe in. 1182 00:49:53,120 --> 00:49:55,550 First of all, you have to have this so-called burning 1183 00:49:55,550 --> 00:49:56,540 platform. 1184 00:49:56,540 --> 00:49:58,430 That is there's sort of no other option. 1185 00:49:58,430 --> 00:50:01,200 Either we do it, or we go out of business. 1186 00:50:01,200 --> 00:50:02,870 So it's very hard for an organization 1187 00:50:02,870 --> 00:50:07,100 that's doing extremely well to adopt something like this. 1188 00:50:09,820 --> 00:50:12,995 Secondly, it takes leadership. 1189 00:50:12,995 --> 00:50:18,013 It has to be that the organizational leadership says, 1190 00:50:18,013 --> 00:50:19,430 this is important, and we're going 1191 00:50:19,430 --> 00:50:22,390 to have constancy of purpose and sustain this. 1192 00:50:22,390 --> 00:50:25,077 We're going to start this and do it and stay with it. 1193 00:50:25,077 --> 00:50:27,160 And then, third, it has to align with the strategy 1194 00:50:27,160 --> 00:50:28,145 of the organization. 1195 00:50:28,145 --> 00:50:30,770 That is it has to be built into what the organization is trying 1196 00:50:30,770 --> 00:50:31,270 to do. 1197 00:50:31,270 --> 00:50:32,690 It can't be something separate. 1198 00:50:32,690 --> 00:50:33,950 We're trying to do this, and, meanwhile, 1199 00:50:33,950 --> 00:50:35,180 we're going to do lean. 1200 00:50:35,180 --> 00:50:37,080 The two have to be together. 1201 00:50:37,080 --> 00:50:42,157 And, frankly, many organizations can't do it. 1202 00:50:42,157 --> 00:50:43,740 SUSAN SHEEHY: I could answer that too. 1203 00:50:43,740 --> 00:50:46,540 It's also a series of incremental changes. 1204 00:50:46,540 --> 00:50:48,390 So, if something happens, like a medication 1205 00:50:48,390 --> 00:50:51,450 error that's disastrous, you can certainly start with that. 1206 00:50:51,450 --> 00:50:54,060 And, as you have improvements, you 1207 00:50:54,060 --> 00:50:57,660 celebrate those improvements and distribute that information 1208 00:50:57,660 --> 00:51:00,630 so that it's a continuous improvement. 1209 00:51:00,630 --> 00:51:03,750 And it can happen over time with really good things happening 1210 00:51:03,750 --> 00:51:04,980 along the way. 1211 00:51:04,980 --> 00:51:08,470 But to roll it out to an entire organization takes a long time. 1212 00:51:08,470 --> 00:51:10,470 But we tell people we have to start somewhere. 1213 00:51:10,470 --> 00:51:13,290 And it's not like it's going to alter your whole organization 1214 00:51:13,290 --> 00:51:14,130 overnight. 1215 00:51:14,130 --> 00:51:17,430 It's celebrating those incremental things that you do, 1216 00:51:17,430 --> 00:51:19,860 looking at your data, looking at your outcomes, 1217 00:51:19,860 --> 00:51:23,070 looking at your staff turnover, and using 1218 00:51:23,070 --> 00:51:25,420 that to build your lean program. 1219 00:51:25,420 --> 00:51:29,145 So it takes time, but you can celebrate things along the way. 1220 00:51:29,145 --> 00:51:30,270 EARLL MURMAN: The biggest-- 1221 00:51:30,270 --> 00:51:35,440 I think the biggest barrier to this 1222 00:51:35,440 --> 00:51:38,230 is if there's a change in the leadership at the top, 1223 00:51:38,230 --> 00:51:41,000 and the new person doesn't really understand it. 1224 00:51:41,000 --> 00:51:44,820 And then the whole thing can crash. 1225 00:51:44,820 --> 00:51:45,480 Bo? 1226 00:51:45,480 --> 00:51:47,272 BO MADSEN: I think, as well, it's important 1227 00:51:47,272 --> 00:51:50,040 that you have a vision, that your organization has a vision, 1228 00:51:50,040 --> 00:51:53,520 and that everybody knows what that vision is. 1229 00:51:53,520 --> 00:51:55,770 And then the beginning is the hardest, 1230 00:51:55,770 --> 00:52:00,660 but, in reality, we all want to do value-added work. 1231 00:52:00,660 --> 00:52:03,510 We want to do the work that we're actually employed to do. 1232 00:52:03,510 --> 00:52:05,190 People, they enjoy that. 1233 00:52:05,190 --> 00:52:09,600 When they can see with the first steps that the waste 1234 00:52:09,600 --> 00:52:12,750 that we're sucked into every day, that that goes away 1235 00:52:12,750 --> 00:52:14,970 and you're more productive, that's nice. 1236 00:52:14,970 --> 00:52:17,230 People, they enjoy that. 1237 00:52:17,230 --> 00:52:19,230 EARLL MURMAN: Good, what are some questions that 1238 00:52:19,230 --> 00:52:23,190 come from the engineering folks here? 1239 00:52:23,190 --> 00:52:24,727 Yeah? 1240 00:52:24,727 --> 00:52:27,060 AUDIENCE: So, at some point, you pointed out a disparity 1241 00:52:27,060 --> 00:52:31,380 between how many hours of training both United States 1242 00:52:31,380 --> 00:52:34,460 and Japanese companies, exactly, give to their workers. 1243 00:52:34,460 --> 00:52:37,950 And this might be silly, but it seems 1244 00:52:37,950 --> 00:52:41,648 that the people are what pretty much makes the company run. 1245 00:52:41,648 --> 00:52:46,820 So, if they're spending so much time training their workers 1246 00:52:46,820 --> 00:52:49,800 and getting so much profit off of it, 1247 00:52:49,800 --> 00:52:53,750 how are we not doing the same thing? 1248 00:52:53,750 --> 00:52:55,270 EARLL MURMAN: So is the question-- 1249 00:52:55,270 --> 00:52:57,157 is the question, does the training detract 1250 00:52:57,157 --> 00:52:58,490 from the productive [INAUDIBLE]. 1251 00:52:58,490 --> 00:53:00,940 AUDIENCE: No, my question is, why aren't we investing more 1252 00:53:00,940 --> 00:53:02,185 into training our workers? 1253 00:53:02,185 --> 00:53:06,720 EARLL MURMAN: Oh yeah, so that's been a real change in the US 1254 00:53:06,720 --> 00:53:09,300 companies as they've adopted these 1255 00:53:09,300 --> 00:53:11,760 is they've come to realize the importance of training. 1256 00:53:11,760 --> 00:53:14,670 And they do invest a lot in training. 1257 00:53:14,670 --> 00:53:17,130 A typical company that I know of in the US 1258 00:53:17,130 --> 00:53:19,800 will invest at least 40 hours a week for every employee 1259 00:53:19,800 --> 00:53:21,810 to be trained during the year. 1260 00:53:21,810 --> 00:53:24,090 And training can be broad. 1261 00:53:24,090 --> 00:53:26,280 It can be specific to that particular job, 1262 00:53:26,280 --> 00:53:28,830 but it could be much broader, just communication skills 1263 00:53:28,830 --> 00:53:33,900 or sometimes even just awareness about their culture 1264 00:53:33,900 --> 00:53:35,530 of the customers in other countries. 1265 00:53:35,530 --> 00:53:37,530 AUDIENCE: So do you think that the difference is 1266 00:53:37,530 --> 00:53:42,773 not in training hours anymore, but in the workers themselves? 1267 00:53:42,773 --> 00:53:44,190 EARLL MURMAN: I really don't know. 1268 00:53:44,190 --> 00:53:45,030 I'm not sure I can answer that. 1269 00:53:45,030 --> 00:53:46,410 I can say that they are investing more 1270 00:53:46,410 --> 00:53:47,350 in training hours. 1271 00:53:47,350 --> 00:53:50,250 Whether it's because the workers are different, I don't know. 1272 00:53:50,250 --> 00:53:50,910 Yeah. 1273 00:53:50,910 --> 00:53:53,337 There may be a chicken and egg situation there. 1274 00:53:53,337 --> 00:53:55,170 One question here, and then we'll come back. 1275 00:53:55,170 --> 00:53:59,250 AUDIENCE: OK, so you mentioned that a lean enterprise creates 1276 00:53:59,250 --> 00:54:01,210 value to multiple stakeholders. 1277 00:54:01,210 --> 00:54:02,750 EARLL MURMAN: Yeah. 1278 00:54:02,750 --> 00:54:04,890 AUDIENCE: But what happens if those values are not 1279 00:54:04,890 --> 00:54:05,840 necessarily aligned? 1280 00:54:05,840 --> 00:54:07,007 EARLL MURMAN: Aligned. 1281 00:54:07,007 --> 00:54:07,590 Good question. 1282 00:54:07,590 --> 00:54:09,260 AUDIENCE: I'm thinking, sometimes, 1283 00:54:09,260 --> 00:54:10,465 you have the shareholders. 1284 00:54:10,465 --> 00:54:13,610 And they might be willing to move the enterprise-- transform 1285 00:54:13,610 --> 00:54:15,610 the enterprise in one direction. 1286 00:54:15,610 --> 00:54:17,630 And you can have the employees. 1287 00:54:17,630 --> 00:54:19,550 They don't want change because they're 1288 00:54:19,550 --> 00:54:21,108 comfortable in that situation. 1289 00:54:21,108 --> 00:54:21,650 I don't know. 1290 00:54:21,650 --> 00:54:23,720 EARLL MURMAN: No, it's a great question. 1291 00:54:23,720 --> 00:54:24,519 Is it Matthias? 1292 00:54:24,519 --> 00:54:25,144 AUDIENCE: Yeah. 1293 00:54:25,144 --> 00:54:29,610 EARLL MURMAN: Matthias asked is the shareholders 1294 00:54:29,610 --> 00:54:31,635 values are not always-- 1295 00:54:31,635 --> 00:54:34,270 will normally not be aligned completely. 1296 00:54:34,270 --> 00:54:36,690 OK, so you have to do the best you can. 1297 00:54:36,690 --> 00:54:39,820 OK, I mean, you have to find something. 1298 00:54:39,820 --> 00:54:41,820 I mean, the ideal is if you could find something 1299 00:54:41,820 --> 00:54:43,988 where every stakeholder gains something. 1300 00:54:43,988 --> 00:54:45,780 Maybe they don't gain everything they want, 1301 00:54:45,780 --> 00:54:46,780 but they gain something. 1302 00:54:46,780 --> 00:54:48,570 Something is better than before. 1303 00:54:48,570 --> 00:54:50,310 OK, so let me take the employee thing. 1304 00:54:55,020 --> 00:54:56,280 I think one of the-- 1305 00:54:56,280 --> 00:54:58,670 I think the question Monica asked relates to that too. 1306 00:54:58,670 --> 00:55:02,820 One of the things that-- one of the things 1307 00:55:02,820 --> 00:55:05,967 that successful organizations do that implement lean is they 1308 00:55:05,967 --> 00:55:07,800 make it known to their employees that nobody 1309 00:55:07,800 --> 00:55:10,380 is going to lose their job because of increase 1310 00:55:10,380 --> 00:55:12,590 in productivity. 1311 00:55:12,590 --> 00:55:14,850 So it's very hard if you go into an organization 1312 00:55:14,850 --> 00:55:17,698 and say, Emily, I want you to help improve us. 1313 00:55:17,698 --> 00:55:19,490 And, by the way, we probably won't need you 1314 00:55:19,490 --> 00:55:20,930 when we're finished. 1315 00:55:20,930 --> 00:55:23,390 Your heart is not going to be in that. 1316 00:55:23,390 --> 00:55:27,390 So instead, you say, Emily, we want 1317 00:55:27,390 --> 00:55:29,373 to have a better organization. 1318 00:55:29,373 --> 00:55:30,790 And you're going to be part of it. 1319 00:55:30,790 --> 00:55:32,970 You may not be doing the same thing you were doing before. 1320 00:55:32,970 --> 00:55:34,887 We may have to train you to do something else, 1321 00:55:34,887 --> 00:55:37,140 or we may have to do something. 1322 00:55:37,140 --> 00:55:39,440 But you're valuable to us, and we want you here. 1323 00:55:39,440 --> 00:55:40,920 And we want you to help us improve. 1324 00:55:40,920 --> 00:55:43,710 So Emily is going to come out. 1325 00:55:43,710 --> 00:55:45,290 She'll probably be happier when she's 1326 00:55:45,290 --> 00:55:47,040 done because she's probably not completely 1327 00:55:47,040 --> 00:55:48,538 satisfied with her job. 1328 00:55:48,538 --> 00:55:49,830 And they'll be more productive. 1329 00:55:49,830 --> 00:55:52,830 And maybe they'll end up outsourcing stuff, 1330 00:55:52,830 --> 00:55:55,960 but they'll find a place for Emily in the organization. 1331 00:55:55,960 --> 00:55:59,830 So you want to make sure it's as much of a win-win as you can. 1332 00:55:59,830 --> 00:56:00,900 And that's the challenge. 1333 00:56:00,900 --> 00:56:07,130 I mean, sometimes, it's hard. 1334 00:56:07,130 --> 00:56:10,790 And, unfortunately, the short-term focus 1335 00:56:10,790 --> 00:56:15,243 of our financial system is a barrier 1336 00:56:15,243 --> 00:56:16,910 for some of these long-term commitments. 1337 00:56:16,910 --> 00:56:19,890 So it takes a lot of strong leadership to overcome that. 1338 00:56:19,890 --> 00:56:20,700 And I think Susan-- 1339 00:56:20,700 --> 00:56:21,200 good. 1340 00:56:21,200 --> 00:56:23,983 You want to show incremental improvement. 1341 00:56:23,983 --> 00:56:26,150 You want to try to get better and better and better, 1342 00:56:26,150 --> 00:56:27,360 not [INAUDIBLE]. 1343 00:56:27,360 --> 00:56:29,780 SUSAN SHEEHY: But I also think that the equation in health 1344 00:56:29,780 --> 00:56:33,290 care traditionally has been that employees were on the expense 1345 00:56:33,290 --> 00:56:35,310 side of the equation. 1346 00:56:35,310 --> 00:56:39,020 And so, when they needed to cut costs, they cut positions. 1347 00:56:39,020 --> 00:56:41,780 And what Toyota does is their employees 1348 00:56:41,780 --> 00:56:44,310 are on the value side of the equation. 1349 00:56:44,310 --> 00:56:46,670 And so they value those employees. 1350 00:56:46,670 --> 00:56:49,862 And that makes the difference in the expense side as well. 1351 00:56:49,862 --> 00:56:51,320 And I think that makes a difference 1352 00:56:51,320 --> 00:56:54,980 because Toyota expects their employees to make suggestions. 1353 00:56:54,980 --> 00:56:56,545 And they implement their suggestions 1354 00:56:56,545 --> 00:56:57,920 where, in health care, we haven't 1355 00:56:57,920 --> 00:56:59,870 done a good job at doing that. 1356 00:56:59,870 --> 00:57:02,000 Employees were just employees. 1357 00:57:02,000 --> 00:57:04,580 And now we're starting to see that employees are 1358 00:57:04,580 --> 00:57:05,960 the experts at what they do. 1359 00:57:05,960 --> 00:57:07,710 And so we need to start listening to them. 1360 00:57:07,710 --> 00:57:09,740 And I have an example. 1361 00:57:09,740 --> 00:57:12,530 I was doing work at a small rural hospital in northern New 1362 00:57:12,530 --> 00:57:14,570 England, a 50-bed hospital. 1363 00:57:14,570 --> 00:57:18,140 And this class, I did two classes of 16 people. 1364 00:57:18,140 --> 00:57:21,650 And they were working on some productivity kinds of issues. 1365 00:57:21,650 --> 00:57:24,510 And they came up with $3 million in savings 1366 00:57:24,510 --> 00:57:28,870 from the delayed OR start times and canceled imaging tests 1367 00:57:28,870 --> 00:57:30,120 and all those kinds of things. 1368 00:57:30,120 --> 00:57:32,930 And they really did a beautiful job with their projects. 1369 00:57:32,930 --> 00:57:36,080 And the last day at report out, the CEO was there. 1370 00:57:36,080 --> 00:57:37,080 He didn't hire us. 1371 00:57:37,080 --> 00:57:39,450 It was a grant through the state. 1372 00:57:39,450 --> 00:57:42,030 So they did this report out and talked about what they found. 1373 00:57:42,030 --> 00:57:46,340 And, at the end, he said, this really makes me look bad. 1374 00:57:46,340 --> 00:57:47,580 And I said, excuse me. 1375 00:57:47,580 --> 00:57:50,840 And he said, I should have fixed these things. 1376 00:57:50,840 --> 00:57:52,550 [INAUDIBLE] 1377 00:57:52,550 --> 00:57:55,430 It was just-- it was the old, traditional model 1378 00:57:55,430 --> 00:57:56,480 of the hierarchy. 1379 00:57:56,480 --> 00:57:58,550 I tell you what to do, and you do it. 1380 00:57:58,550 --> 00:58:00,560 If I tell you to cut 10% off your budget, 1381 00:58:00,560 --> 00:58:04,130 you do it, not show me how you can increase 1382 00:58:04,130 --> 00:58:05,850 throughput and revenue. 1383 00:58:05,850 --> 00:58:08,430 So we need to just change our thinking in health care. 1384 00:58:08,430 --> 00:58:10,970 And it's happening, but very slowly. 1385 00:58:10,970 --> 00:58:14,030 And valuing the employee is the most important thing 1386 00:58:14,030 --> 00:58:15,350 we need to do. 1387 00:58:15,350 --> 00:58:17,690 And, unfortunately, the term lean 1388 00:58:17,690 --> 00:58:20,090 gives people the absolute fear that we're 1389 00:58:20,090 --> 00:58:21,590 going to cut positions. 1390 00:58:21,590 --> 00:58:23,240 That's what they immediately think 1391 00:58:23,240 --> 00:58:25,800 when you say we're coming in to do lean, that word. 1392 00:58:25,800 --> 00:58:27,800 EARLL MURMAN: Do that, and lean became the word. 1393 00:58:27,800 --> 00:58:28,220 It's like the-- 1394 00:58:28,220 --> 00:58:29,137 SUSAN SHEEHY: Exactly. 1395 00:58:29,137 --> 00:58:31,040 EARLL MURMAN: It's like the evolution 1396 00:58:31,040 --> 00:58:32,150 of industry I showed you. 1397 00:58:32,150 --> 00:58:33,530 We can't change the word now. 1398 00:58:33,530 --> 00:58:34,790 It's just become part of it. 1399 00:58:34,790 --> 00:58:36,248 SUSAN SHEEHY: It's just what it is. 1400 00:58:36,248 --> 00:58:38,840 EARLL MURMAN: It came actually from a MIT graduate student 1401 00:58:38,840 --> 00:58:40,820 in a research seminar one day when 1402 00:58:40,820 --> 00:58:42,710 they were talking about the things they 1403 00:58:42,710 --> 00:58:46,340 were learning about the Japanese automotive industry. 1404 00:58:46,340 --> 00:58:48,360 And they said, what are we going to call this? 1405 00:58:48,360 --> 00:58:50,120 And he said, well, let's call it lean because we're doing 1406 00:58:50,120 --> 00:58:51,650 more with less, and it stuck. 1407 00:58:51,650 --> 00:58:53,960 But it unfortunately has a negative sound to it, 1408 00:58:53,960 --> 00:58:55,767 lean and mean and all that kind of stuff. 1409 00:58:55,767 --> 00:58:57,350 So we have time for one more question. 1410 00:58:57,350 --> 00:58:58,845 Did you have a question? 1411 00:58:58,845 --> 00:59:01,220 AUDIENCE: Yeah, so I'm going to play the skeptical a bit. 1412 00:59:01,220 --> 00:59:06,380 How do you establish causation between these methods 1413 00:59:06,380 --> 00:59:07,580 and the outcome? 1414 00:59:07,580 --> 00:59:09,500 How is it not just an improvement 1415 00:59:09,500 --> 00:59:10,870 in employee mentality? 1416 00:59:10,870 --> 00:59:14,067 I want to have this company that won't just sit back and-- 1417 00:59:14,067 --> 00:59:15,900 EARLL MURMAN: That's a really good question. 1418 00:59:15,900 --> 00:59:18,110 How can we show that the kind of results we showed 1419 00:59:18,110 --> 00:59:19,617 here come from lean? 1420 00:59:19,617 --> 00:59:21,950 Because there are a lot of confounding factors going on. 1421 00:59:21,950 --> 00:59:23,617 There's a changing business environment. 1422 00:59:23,617 --> 00:59:25,310 There may be other things going on. 1423 00:59:25,310 --> 00:59:30,200 And I guess, in a scientific sense, 1424 00:59:30,200 --> 00:59:32,290 it might be very hard to do that. 1425 00:59:32,290 --> 00:59:36,570 But, when you go and look at organization after organization 1426 00:59:36,570 --> 00:59:39,810 after organization that adopts this and sees improvement, 1427 00:59:39,810 --> 00:59:43,410 there's a correlation there that adopting lean thinking 1428 00:59:43,410 --> 00:59:46,170 and the way we teach it here-- 1429 00:59:46,170 --> 00:59:49,210 one of the pitfalls in adopting lean thinking is-- 1430 00:59:49,210 --> 00:59:51,400 and let's take the 5S or 6S. 1431 00:59:51,400 --> 00:59:54,210 A lot of people think lean is a tool. 1432 00:59:54,210 --> 00:59:55,840 Oh OK, now, I know how to do 5S. 1433 00:59:55,840 --> 00:59:56,510 I can fix it. 1434 00:59:56,510 --> 00:59:57,510 That's not what lean is. 1435 00:59:57,510 --> 01:00:00,380 Lean is this change in culture and the way of thinking 1436 01:00:00,380 --> 01:00:01,450 that Susan mentioned. 1437 01:00:01,450 --> 01:00:04,350 And that takes some time.