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Michael Balle

Michael Ballé: Objectives for today and objectives for tomorrow

By Michael Balle, co-author of The Gold Mine and The Lean Manager - Last updated: Saturday, October 23, 2010 - Save & Share - Leave a comment

There are two aspects to kaizen: one is to make sure today works as its supposed to, which is about satisfying customers today, and making money today and the other is about preparing for the future in terms of solving larger problems to sustain growth.

Objectives for today are about keeping operational processes working as they should. In this sense, TAKT TIME = BUDGET because the budget is established to deliver a certain customer takt. If we’re faster than TAKT, it means we have too much resources on the line, conversely, if we’re slower than takt it means that we’re wasting some of the resources online. Which is why, if at all possible, if the target has not been reached we want to do overtime right away in order to stick as close to the plan as possible – and wee the extra cost pile up realtime.

Objectives today should be calculated on what we can achieve should everything go right. For instance, on a production cell, parts objectives (at a given takt time) can be estimated simply by taking the average time of five cycles as an objective cycle time. This means we’re taking as an objective the use of resources WHEN NO SETBACKS HAPPEN. This is not an objective operators are supposed to reach on their own. This is a clear line in the sand which will help us to visualize the gap between what we should be able to make and what we are currently capable of making – in order to kaizen it and reduce this gap as we go on.

So objectives for today should be set by taking whatever we know we can achieve without any variation. This isn’t completely realistic because variation will occur, but it’s not wildly crazy either because we have witnessed many cases in which the job happened without variation: the objective is tough but feasible. The most important thing about such an objective is that although it’s stretching, it’s built on pure fact. We have achieved this, so it’s legitimate to want to achieve it every time.

Objectives for tomorrow are harder to set, precisely because there is no baseline today. Lean practice seems to be, in that case, to take a ballsy gamble such as divide by two (accidents, complaints, gas usage, anything) or multiply by two. This order of magnitude is usually good to get you thinking outside the box. A 10% improvement can usually be achieved by overburdening the system for a short while, without ever really going into the issue.

Objectives for tomorrow are about 1) facing a major challenge which we know we must improve radically and 2) aiming for a target high enough that it will force us to think differently. It shouldn’t be achievable in the current conditions – there’s no way we should be able to achieve it by jumping higher or running faster. Objectives for tomorrow should lead us to think differently about the problem.

For instance one global company I know set out to do lean with objectives of cutting accidents by ¾, customer complaints by half, missed deliveries by half, labor cost by a quarter, halve flow time, capex by 30% and so on in two years – and the most amazing is that they’re on track to achieve most of these.

What’s the secret? This company’s CEO is experienced with lean and he is constantly seeking the links between:

High level objectives -> learning leverage points -> kaizen activities

For instance, with safety, he knows that each site has to pay attention every day – so, since attention is the key driver, the kaizen tool is a daily “barometer”, or audit, devised by the site and conducted by each operational manager in their areas. This, combined with a ‘5 why?’ analysis of every accident has rapid results across the group (with sites spread across the world). Similarly, halving flow time in the supply chain is largely linked to reducing batch sizes across every link of the chain. By pushing site managers to reduce batches and by teaching them SMED relentlessly, many of the site managers are learning the logic of smaller batches and flow times are reducing at group level – even though not evenly across the plants.

Ultimately, one key challenge of lean thinking is linking the objectives for tomorrow with those of today. If one only takes care of today, there will be no tomorrow. But if one only focuses on tomorrow, today won’t be so great and tomorrow will never happen. Objectives in lean are set by:

–       stretch targets on key indicators which require fundamental progress and new thinking

–       targets without the process’ variation to focus every one on solving problems now

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