Best Practices -- From Theory To Practice

Dec. 21, 2004
Business simulations help people learn to apply lean concepts -- beyond the factory floor.

Final assembly is not the usual workplace of Stephen Segal, vice president and CIO of Price Industries, a manufacturer of heating, ventilation and air-conditioning products located in Atlanta and Winnipeg, Canada. Yet that's where he found himself several months ago. No, he wasn't changing jobs. He wasn't even in a factory. Instead he was in Raleigh, N.C., participating in a simulation workshop on lean business processes delivered by Value Innovation Partners Ltd., a Chicago-based consulting firm. Business simulation workshops operate on the theory that the best way to learn is by doing. "A book or a lecture will give you a nice base understanding of lean, but they are not practical," says Patrick Lucansky, co-executive director of Value Innovation Partners. "This is participative. [Attendees] get to try the tools and techniques [of lean]." At their most basic, lean concepts focus on waste elimination and meeting customers' needs. While many early lean simulations demonstrated the benefits of implementing lean into manufacturing production processes, many simulations now focus on the entire lean enterprise. Says Lucansky, "Lean is about the whole organization, not just about the factory floor." Value Innovation Partners has developed a lean simulation workshop that encompasses the functions of a business enterprise, including finance, sales, production, quality, customers and suppliers. Workshop participants take these roles in a mock company and over the course of a day transition from using traditional processes to complete their jobs to employing lean processes. Classroom teaching is augmented by the practical application of lean techniques, such as standardized work and mistake-proofing. That's how Price Industries' Segal landed his workshop role in final assembly. Less important than the job to which he was assigned, however, was the understanding he gained about how his role related to the entire production process. The simulation helped demonstrate "the real effect a transition to lean has on the entire organization," Segal says. Simulations also can show "how convoluted simple processes get over time," says Rick Kueller, director of performance improvement for Cardinal Health Inc., a Dublin, Ohio-based provider of health-care products and services. He participated in a Value Innovation Partners simulation in 2002. His role was translating orders to procurement. Kueller says the exercise brought to light how rules can get added to business processes over time for obscure reasons that no longer exist. Yet the rules become institutionalized. "It was a good reminder of the necessity to continually reengineer," he says. Probably better known as an engineering and construction firm, Lockwood Greene, Spartanburg, S.C., also offers training solutions that include live simulation models. Lockwood Greene's Supply Chain Logistics Model uses a simulation model that includes physical components such as gaming boards and financial software to help workshop participants measure the impact of their supply-chain management decisions. Participants assume roles as diverse as accountant to warehouse manager to trucking company worker in this model, which requires work teams to supply, make, ship, warehouse and distribute products to customers. Models first are operated at less-than-optimal states, meant to reflect the current reality for many companies. Workshop participants then are challenged to optimize their supply chains. F. Roy Piciacchia, manager of manufacturing services for Lockwood Greene, developed the model. In addition to helping workshop participants absorb lean processes, Piciacchia says his model points out errors businesses make when introducing change to their organizations. For example, "A lot of people do not do enough up-front cross-training," he says. Similarly, organizations forge ahead with change, yet "don't stop and get everybody on board." As a result, businesses begin change efforts in a less-than-optimal fashion that only grows increasingly complicated, he says. By their very nature, business simulations may help tear down the "functional silos" that characterize many traditional manufacturing organizations and prevent their conversion to lean. That's because developing teamwork and sharing experiences are inherent components of the learning exercise. "We get people together who may not normally interact," such as a shop-floor employee and the company CEO, Lucansky says. Similarly the simulation may remind people who simply do their jobs and go home that there is a customer to whom they are responsible. Ultimately, business simulations are tools to add to an organization's training arsenal. And, as Price Industries' Segal notes, they can be "a real eye opener." Send submissions for Best Practices to Editorial Research Director David Drickhamer at [email protected].

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