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23rd Edition 

June 2013

In This Issue
The Hidden Face of Waste
"Costed" Value Stream Maps
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We would like to introduce our latest valued contributor to this Lean Construction Newsletter - Gary Santorella. Gary is the owner of Interactive Consulting, and has been providing professional services exclusively for the construction industry since 1996.  Gary is a licensed cognitive-behavioral therapist and an expert in team dynamics and behavioral change, who has developed a unique methodology to assess job-site team functioning. We look forward to his unique insight and valuable contributions.


The Hidden Face of Waste


By Gary Santorella


The traditional Lean assessment for waste often focuses on wait times, unnecessary touches, or ineffective procedural handoffs. But more often than not, waste has a face. While the common refrain for Lean practitioners is that "90% of the time, people are not the issue - the process is", we can't give that same pass to those in leadership positions. The hard truth is, the best Lean efforts can go for naught if a company's leadership is disengaged or otherwise ineffective. This is why every Lean assessment should include an examination of leadership functionality.


Recently, Larry and I worked with a service division for a construction company that, at first blush, should have been the very picture of success. The company, overall, had a great reputation in the industry for providing quality work with the highest level of integrity. Their people were experienced, well trained, and empowered to do their jobs. Yet, despite these significant pluses, measures for productivity and profitability painted a very different picture. In short, the division was the company's poster child for underachievement.


The causes for this state of underachievement, as revealed by a detailed VSM, were varied. An equipment inspection process that duplicated information that existed elsewhere in the company, a circular routing of procedures that resulted in multiple, non-productive touches, and inaccurate information in the tasking checklist that required techs to return to the warehouse to retrieve the correct parts for the job were certainly all significant variables in the waste equation. But to understand the true root cause of waste in any system, it is imperative to determine what psychologists describe as "maintaining conditions" - i.e., the elements that are in place that actually inadvertently reinforce (maintain) wasteful practices. In this case, the true "driver" was a lack of effective leadership and the psychological phenomenon known as "learned helplessness".


Replicable empirical studies, for both animals and people, have clearly shown that if an organism doesn't have a sense that it can exert positive control over its negative environmental circumstances, that - over time - it simply stops trying to improve its situation. As Seligman demonstrated, if you place a dog in a tank of water until it drowns, revive it, do it all over again, then try to train it to avoid an aversive stimuli (jumping over a low wall when an alarm sounds to escape an electrified grid), it will fair far worse than dogs that did not experience the drowning phase. Compared to the control group, the dogs in the drowning phase failed to learn that they could easily escape, and simply remained on the grid to accept the shock. In essence, if shown that its efforts are pointless in an old paradigm, dogs quickly learn to accept their fate in a new aversive paradigm - and do so, not with a yelp, but with a whimper.


The same dynamic applies in the workplace. Pair people with a boss who doesn't do anything meaningful with their concerns, worries, or ideas for improvement - and over time - most will learn to accept the conditions of their poorly run workplace, and do little more than what is absolutely necessary to continue bringing home a paycheck. Mediocrity, not operational excellence, becomes the watchword in such environments.


And such was the case with the technicians in the service division described earlier. For years, the service techs endured being given incorrect equipment lists, being sent to the wrong jobs, or being pulled off of a scheduled maintenance call in favor of an unscheduled emergency. To add insult to injury, they often had to hand credits to these same, now angry customers, whose maintenance was never completed.


We could be tempted to blame a faulty software program, or a far from streamlined process map (both of which were true), for these problems, but to do so would be to miss the true root cause as to why such problems were allowed to flourish in the first place. This centered on what happened after people tried to voice their frustrations or take the initiative to fix what was broken. And it could be summed up in one word - nothing. When they brought their frustrations to their boss, he nodded, acknowledged the problem - but nothing of substance changed. If they pressed the issue, he often delegated the problem for additional oversight, which merely resulted in additional unnecessary steps in what was an already inefficient and bloated process. When the techs imputed changes to the balky software system - as instructed - the system merely defaulted to the previous information, and they again arrived at the job with the wrong equipment. Nor were any standards set for techs to efficiently prioritize their call schedule or 5S their rigs.


Predictably, as these problems dragged on and it became more than apparent that their boss would do little to initiate meaningful process improvements, the techs did what most people in such situations do - they accepted that there was little they could do to make the situation better - and unhappily resigned themselves to being an ineffectual part of an underachieving status quo.


We are happy to report that this company is well on its way in its Lean journey. They are re-tooling and streamlining division processes and are taking the necessary steps to improve their handoffs and information flow. But none of this would have come about if they had decided to give themselves a "pass" and were unwilling to hear some very uncomfortable and unflattering feedback (what their president termed as a 'cultural colonoscopy' about how they were performing as leaders.)


In our next Newsletter: Can Lean Culture be Measured?


In a word: Yes. There are behavioral indices that can be assessed as to whether or not a culture, and its leadership, is ready to make the changes necessary to adopt Lean practices. This same assessment process can also identify the means and methods for cultural improvement. 

"Costed" Value Stream Maps - Focusing Value Stream Improvements


Lean is NOT a cost reduction activity. Costs are reduced as an outcome of doing Lean activities. However, in the global economy where market conditions can change rapidly, using this VSM hybrid has its applications.


By Larry Rubrich 

Taiichi Ohno, one of the developers of the Toyota Production System, once said, "Eliminating waste is not the problem, identifying it is." The role of Value Stream Mapping (VSM) in the Lean Construction Toolbox is to make invisible waste "visible". VSM's are particularly valuable in identifying waste (delays) that can add cost and extend project delivery lead times.  Value Stream Mapping is: 

  • A method of creating a "one page picture" of all processes from the time a RFP is received until the project is delivered to the owner and payment is received.
  • A visual representation of the flow of both the information product and the physical project across all of the processes - both value adding and non-value adding. 

While Lean is not a cost reduction program as previously noted, the rapidly changing global economy can present challenges to our "costs are reduced as an outcome of doing Lean" model. For example: owners are now demanding more value for their dollar which is requiring contractors to show owners how they have minimized waste and maximized owner value on a potential project.


For organizations that are threatened by these changes and feel the need to better understand their "system" costs, a Costed VSM may be the answer.


As with any Kaizen Event, preparation starts 3 weeks out using a VSM Event checklist (contact kelly@wcmfg.com if you would like a copy of this checklist). It is a requirement to have an accounting or finance person on this team from a costing and recosting standpoint.


The Costed VSM follows the normal VSM with several exceptions that will be pointed out. It starts with the regular four steps to VSM as shown below: 


Four Steps to VSM   

Ideally, we VSM to achieve a goal as stated in Lean Policy Deployment, but as noted, the Costed VSM may be needed as a result of changes in markets or Policy Deployment strategies. In the Costed VSM, the goal is a cost or price.


The map is created in the standard VSM format except that we now add "costs" for each of the processes/process boxes as shown below. Note that during the creation of the Current State Value Stream Map (CSVSM), all participants are asked to write down improvement ideas as they think of them on the "starburst/clouds" sticky notes that were handed out when the session started. When the CSVSM is completed, all participants post their notes on the map while explaining their ideas to everyone else. This is the start of the "advanced 2-step" brainstorming process. This posting of the notes is shown below: 


Starburst Sticky Notes  

The next stage in the Costed VSM varies from the standard VSM process. Just like in Change-Over/Setup Reduction, where we concentrate on the longest time setup elements because they have the largest opportunity to improve, the Costed VSM concentrates on the highest cost processes/process boxes because they present the largest opportunity for savings.


So that we can focus the second stage of brainstorming on these items, we separate these high cost items on a separate sheet as shown below:

  Separate High Cost Items


The next step in the advanced 2-step brainstorming process is to write down all the ideas on flip charts (the standard brainstorming process most organizations use) as shown below. It is important to encourage participants to make sure that all starburst/cloud ideas are included on the flip charts. There is normally some "idea fallout" of the starburst/cloud ideas as the participants elevate the value of their own ideas as a result of hearing ideas during the flip chart brainstorming step.


Write down ideas on flip chart   

After the flip chart ideas are affinitized (grouped by like idea), the Costed VSM adds another extra stage. The remaining ideas that are eligible for voting  (there might be 50 - 100), are then evaluated by the participants from a cost savings and implementation risk standpoint. This allows the participants to more easily identify the best ideas by adding the ratings together. The scale looks like this:


Cost Savings

1 = Low

3 = Medium

5 = High


Risk to Achieving Idea Implementation

1 = High

3 = Medium

5 = Low


The next step in the brainstorming is to complete a secret ballot vote for the best ideas by the participants (typically the participants/teams are given between 5-10 votes depending on the number of eligible ideas).


After the votes are posted, the top ten ideas (by votes) are listed. At this point in a normal VSM process, the team creates the Future State Value Stream Map (FSVSM). For a Costed VSM, the participants do a process/reality check. If all ten ideas are implemented, will the cost/price goal be achieved?


If the answer is yes, the team creates the FSVSM.


If the answer is no, the team goes further down on the "voted for" list or rebrainstorms for more ideas, and then does the reality check again. This activity continues until the goals are met.


For 3-day VSM Events, the next step is to choose a team leader and then develop the Kaizen Newspaper with the actions items required to turn the FSVSM into the CSVSM. This is then followed by the management report out.


Kaizen Newspaper with Action Items  

For 5-day events, the team breaks into sub-teams on day three and begins implementing the top voted for ideas. The team leader selection and Kaizen Newspaper is then accomplished at the end of day five, followed by the management report out.


Lean Construction Overview 

One-Day Training Session

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A recent session attendee, Chris Johnson, President of Piper Fire Protection said, "This class was a real life changer for me."  


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This Lean newsletter is the result of the collaboration of three organizations:
Grunau Company
Ted Angelo, Executive Vice President

Interactive Consulting
Gary Santorella, Owner
WCM Associates LLC
Larry Rubrich, President


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