culture or quality

Fred Levko Lean Consulting Group, LLC

Culture or QualityWhat does your company

need?

2Fred Levko Lean Consulting Group, LLC

Fred LevkoBSEE Oakland University, MBA DePaul

UniversityProduct Design Engineer with Eleven

PatentsFord Motor Company Lean CertifiedLean Six Sigma Black Belt30 years experience in product development,

manufacturing, and process improvementLean Consulting Clients in Healthcare, Non-

Profit, Medical Devices, Automotive Parts, Computer Peripherals


Statement of FactIf there is more than one, you have a culture.

You prefer good over bad.


Can your Company survive without Quality?Quality—The perceived value the customer

receives for their expense.Cost of Quality—The resources expended by

the company to assure the attainment or maintenance of the value developed, produced, and/or delivered to the customer.

Real Cost—Inspectors, scrap, rework, supplier validation, excess inventory, training, field service

Hidden Cost—Lost reputation, future market-share, customer loyalty, goodwill, audits


Can your Company survive without Culture?Leadership—Establish an environment of values

that define expected behavior and results.Relationships—People react to the work demands

by creating norms to attain successful outcomes.Communications—Context and belief of the

message distributed among the group about activities to perform work.

Reward—Leadership’s encouragement to complete work demands that will benefit the participants.


What comes first?

ORQuality Culture


"Time was when a man could order a pair of shoes directly from the cobbler. By measuring the foot himself and personally handling all aspects of manufacturing, the cobbler could assure the customer would be satisfied."

Historical Reference


Pre-industrial 1890 Mass 1920 Lean 1980

Peo

ple

§ Craftsman perform allaspects of task

§ Self-taught orapprenticeshiptraining

§ Employees contributeminimally to totalproduct

§ Training for limitedskills

§ Management makesdecisions

§ Clusters ofemployees workingin team§ Extensivecontinuing training

Pro

duct

§ Customized, non-standard products

§ Variation in quality

§ Standardized, focusedon volume not quality

§ Focus on internal/external customer

Wor

kE

nvir

onm

ent § Independence,

discretion§ Variety of skills§ responsibility

§ Obey mgmnt.§ Repetitive, mind-

numbing work§ Limited skills,

knowledge, littlediscretion, simplifiedtasks

§ Some discretion,group effectiveness,empowerment, teamaccountability, workcells

Quality of Individual

’s work valued by Customer

History of Manufacturing



Peo

ple







Pro

duct





Wor

kE

nvir

onm







Group Individual

s to do work

through company culture




Peo

ple







Pro

duct





Wor

kE

nvir

onm







Affordable Products

differential by Quality

available from customer

value driven company

Current



The RealityQuality spawns the development of Culture as

people team to do work.

Culture evolves from ‘separation-of-labor’ to collaboration among internal customers (up stream & down stream from work process)

Leadership’s relation to workers changes from “. . .do your work as you are told” to

“. . .how can I help you improve your work”.

Culture cultivates QualityCustomer buying habits change from

‘whatever-is-available’ to competitive selection.


The RealityExtinct High Quality Companies

Mercury, Oldsmobile, Singer, Digital

Extinct Deep CulturesIBM, Pan-Am, Arthur-Anderson

Adaptive Culture for High QualityGoogle, Toyota, Wal-mart

Emerging sectors of Adaptive Culture with High QualityHealthcare, Energy Management, Social Network


Market DrivenEvery morning in Africa, a Gazelle

wakes up. It knows it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death.

It doesn’t matter whether you are a lion or a gazelle - when the sun comes up, you had better be running.


Requirements to Transition from Traditional to Adaptive

Agile to shifting market demandsDeliver value to the customerShort lead-time to satisfy customer ordersRapid implementation of innovationCustomization for niche market


Strategy to Leverage Culture and Quality to AdaptCreate a ‘burning-platform’ for changeIdentify gaps of skills and knowledge that

hinder changeImprove cost basis for products and servicesKnow your customerTake advantage of speed


Methods to changeCulture and QualitySix Sigma specific to QualityLean Enterprise through CulturePolicy Deployment align work effort to

change


What is Six Sigma ?

Achieve 3.4 defects per million opportunities

Lead by Six Sigma BeltsStrong emphasis on statistical

analysis


What is Lean?

Employee engagement philosophyCollection of process improvement

tools Eliminate waste


Are they mutually exclusive ?

LeanCulture

6σ Quality


What they share

LeanCulture

6σ Quality

• Customer Focus

• Leadership• Discipline• Data driven• Teamwork• Process

Improvement• Training


How they coexist Engage Senior Leadership & Recognize Value Stream

to CustomerIdentify Gaps in Process Performance as leading

indicators to achieve prosperity

Engage Employees to Stabilize Process and

Reduce Waste

Identify Six Sigma Projects to Reduce Process Variation

Sustain and Continuously Improve Process

Lean Leaders

Lean Employees

Six Sigma Belts

Blended

TrainingTrainingTrainingTraining

Lean

6σ


How they achieve change through projects

Continuous Improvement

Six Sigma Black Belt

DMAIC

Six Sigma Green Belt DMAIC

Kaizen(Rapid Improvement Events)

PDCA


Alignment of Change by ‘Line-of-Sight’

23

Improve Market Share 15%

Innovate Product Technology

Reduce Cost 15% of Product Portfolio

Select Product Line for 30% less

CostRedesign a

Product from Line


Align Culture to Cultivate Qualitythrough Policy Deployment

Apply Lean & 6σ

Tools

Leadership Planning

Implementation by Workforce

Reward System

Communications Review


Culture or Quality

What does your company need?

Your company needs both!


Thank you for your attention!

Q & A

26

culture or quality

Business

company culture

individuals work

development of culture

complete work

customer loyalty

mindgroup effectiveness

customer ordersrapid

market demandsdeliver