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Creating the Agile Organization April 2013 Rich Gildersleeve and Jerry Wright. Never Stop Getting Better®. Agenda. Brief overview of DJO Global The need for speed and agility Agile/Lean characteristics, the top 8 list Agile/Lean exercise – Lean NPD Agile characteristics (continued)

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creating the agile organization april 2013 rich gildersleeve and jerry wright
Creating the Agile OrganizationApril 2013Rich Gildersleeve and Jerry Wright

Never Stop Getting Better®

agenda
Agenda

Brief overview of DJO Global

The need for speed and agility

Agile/Lean characteristics, the top 8 list

Agile/Lean exercise – Lean NPD

Agile characteristics (continued)

Exercise: Making Your NPD More Agile

slide3

DJO Global Statistics:

  • $1.13 Billion in Sales for 2012
  • Approximately 5,370 employees
  • Products sold in more than 80 countries
  • Over 140,000 units manufactured daily
  • More than 35,000 sellable products
  • More than 1 million square feet of operating space
  • More than 12,000 orders shipped per day
  • The largest orthopedic rehabilitation company in the world
  • 8thlargest orthopedic company in the world
  • Largest privately held company in San Diego
slide4

DJO Global Locations

Malmo

Arden Hills, Shoreview

Mequon

Guildford

Herentals

Mississauga

Clear Lake

Freiburg

Indianapolis

Ecublens

Vista

Mouguerre

Asheboro

Shanghai

Barcelona

Milan

Sfax

Hong Kong

Austin

Tijuana

Sydney

Cape Town

slide7

Every Day on the Serengeti Plain!

…It’s not the big that (b)eat the small, but the fast that (b)eat the slow.

need for change
Need for Change?

“It is not necessary to change. Survival is not mandatory.”

Dr. W. Edwards Deming 

lean agile characteristics
Lean/Agile Characteristics

Continuous improvement culture

Learning organization

Strategic and operational portfolio planning

Appropriate use of technologies

Metrics used to reward appropriate behaviors

Decisions made quickly

Bureaucracy minimization

Suppliers and vendors moving fast

continuous improvement culture
Continuous Improvement Culture

A continuous improvement culture is much more important than any agile or lean tool or technique we will be discussing today. Such a culture allows limitless potential to unfold. Without it, as new tools are implemented, success rates will be reduced and improved processes may regress.

  • Visual and interactive methods
  • Engagement throughout organization
  • Walk the talk with metrics
  • Reward appropriate behavior
what is the culture of your company
What is the Culture of Your Company?

Choose 3-5 key words that describe your company’s culture. Do you think it is a good culture that should be emulated by other companies? Or do you think it needs work?

  • Open / Accepting –OR- Closed / Confidential?
  • Fast-paced / nimble –OR- methodical / steady?
  • Very power-oriented –OR- independent / free?
  • Easy to change –OR- difficult to change?
  • Innovative / try things –OR- Keep to yourself?
continuous improvement
Continuous Improvement

How does your company handle a business process that is too slow, costly or error prone?

Who points out problems that need to be fixed?

Who fixes the problems?

slide14

Analysis

Team

Analyze

Analyze

Analysis

Team

Recommend

Run Trials

Blitz

Team

3 DAYS

Decide

MONTHS

Make Change

Management

Implementation

Team

Implement

Implement

Change

Employees

Problem Solving

KAIZEN BLITZ

MSH!

TRADITIONAL METHOD

Slow and Unsure

slide16

Continuous Improvement Culture

  • KAI
  • To break apart
  • Tochange
  • ZEN
  • Study
  • Makebetter

KAIZEN

  • Continuous Improvement
  • Reduce waste aggressively, methodically and continuously
  • Involve everyone in solution

BLITZ

=Lightning Fast!

slide17
Tasks that transform information and raw materials into products that meet customer needs are value-added

Everything else is waste and must be reduced or eliminated

Fundamental Principle of Kaizen

value adding or not
Value-adding or Not?

Financial analysis

Project prioritization

Customer values

Project planning

Design

Capital requests

ECOs

Testing

Design loops

  • Waiting in line (queuing)
  • Patents
  • Labor routings
  • BOMs
  • Innovation
  • Sample production
  • Tooling
  • Post-release follow-up
  • Sign-offs and reviews

Incorporating ‘Lean’ leaves more

time for innovation and risk taking

what is lead time
What is Lead Time?

The best way to describe lead time is to press a start button when a project starts and then press the stop button when it is finally released for sale.

Lead Time

is the total elapsed time that it

takes that product to make it from to idea to realization and ready for sale/shipping to customers.

lean agile npd reduce lead time
Lean/Agile NPD (Reduce Lead Time)

1 Month - 10%

12 Months - 80%

14 Months - 93%

Typical ratio of value-adding NPD activity

If focus is only on reducing NPD value-add activities

Non Value Adding NVA

VA

Non Value Adding NVA

VA

Decrease lead time radically by focusing first on reducing non value-adding activity!

NVA

VA

Project Lead Time

0

3

6

9

12

15

Months

holistic product development
Holistic Product Development

Company Vision

and Mission

Industrial Immersion

for Tech Awareness

Internal Offering

Strategies & Structure

Customer Immersion

for Market Awareness

Strategic Portfolio

Planning

Technology

Advancement

Product

Development

Sustaining

Engineering

Well-received

Offerings

Continual

Post-release Learning

Updated: 05/08/12

slide22

Company Vision

and Mission

Industrial Immersion

for Tech Awareness

Internal Offering

Strategies & Structure

Customer Immersion

for Market Awareness

Strategic Portfolio

Planning

Technology

Advancement

Product

Development

Sustaining

Engineering

Well-received

Offerings

Continual

Post-release Learning

Updated: 05/08/12

holistic pd and key processes
Holistic PD and Key Processes

Critical customer interests

Company Vision

and Mission

Customer Orientation

Ethnography

Customerstorming

Industrial Immersion

for Tech Awareness

Internal Offering

Strategies & Structure

Customer Immersion

for Market Awareness

VOC

Technology Leverage

Technology mapping

Field testing

Strategic Portfolio

Planning

New materials

and techs

Advanced conceptualization

Kaizen blitzes

Prototyping

Vendor and Univ partnerships

Value stream mapping

Technology

Advancement

Product

Development

Sustaining

Engineering

Intellectual property

Knowledge gaps-capture

LAMDA problem solving

Resource KanBans

Set-based design

Well-received

Offerings

Value-add Optimization

Protostorming learning cycles

Stage-Gate

Innovation Enhancement

Project management A3s, processes

Scrum-sprints

Continual

Post-release Learning

Metrics

Updated: 05/08/12

holistic pd and key processes1
Holistic PD and Key Processes

Company Vision

and Mission

Customer Orientation

Ethnography

Industrial Immersion

for Tech Awareness

Internal Offering

Strategies & Structure

Customer Immersion

for Market Awareness

Technology Leverage

Technology mapping

Customerstorming

Strategic Portfolio

Planning

mature working process

Critical customer interests

newer or needs tuning

Intellectual property

Resource KanBans

Vendor and Univ partnerships

Advanced conceptualization

difficulties, likely need a blitz

Knowledge gaps-capture

VOC

Technology

Advancement

Product

Development

Sustaining

Engineering

Field testing

Prototyping

Stage-Gate

Set-based design

Protostorming learning cycles

Project management A3s, processes

Scrum-sprints

New materials

and techs

Well-received

Offerings

Metrics

Value-add Optimization

Value stream mapping

LAMDA problem solving

Innovation Enhancement

Continual

Post-release Learning

Kaizen blitzes

Updated: 05/08/12

slide26

Learning and innovating: some ironies

Uncover true root cause for lasting change (LAMDA). Explore many options for optimal innovation

Innovation enhancement

Get VOC completed so we can start design!

No Problems here!

Broad specs are OK to start, but don’t waste time developing refined specs. Instead learn first

VOC is a journey, not a one-stop visit

Celebrate the discovery of problems

Resist jumping to conclusions, acting too soon

Many VOC checkpoints throughout cycle, single feature feedback, trade-offs

Root cause/learning, countermeasures

Test to specs!

I have the solution!

learning filling knowledge gaps
Learning: Filling Knowledge Gaps

A few of the many unknowns in developing a new product

Marketing: Which features are important to our customers?, value proposition?, volume?, pricing?

Engineering: Optimal component and/or assembly design?, manufacturing methods?

Manufacturing: Cell design?, PM schedules?, training?, VWIs?, root cause analysis of low FPY and/or field failures?

Some tools to facilitate learning and to fill these knowledge gaps

A3 thinking, often employing LAMDA

Set-based thinking

5 whys

Fishbone diagrams

Problem analysis trees

Strategy canvases

slide28

What is GEMBA?

GEMBA is a Japanese word that means the actual place or where things are happening. For most of us this is where the work takes place.

The “Ohno”

Circle

TaiichiOhno was a founder of the Toyota Production System. He used the “Ohno” circle to force going to GEMBA and observing. Why is this important for R&D?

what is an a3
What is an A3?
  • Crisp, objective, visual and interactive general purpose tool developed by Toyota
  • So named because they fit an A3 size of paper
  • The processes used to develop specific A3s are as important as the A3 itself
  • Engender a style of…

…thinking that is rigorous and thorough

…communication that focuses on hard data and vital information

…problem solving that is collaborative and objective

types of djo a3s
Types of DJO A3s
  • Knowledge capture
  • Problem solving with LAMDA
  • Voice of the Customer (VOC)
  • Project Management
  • Vendor background and capabilities
  • New concepts
  • Technology mapping
  • And so much more….
lamda problem solving the cycle of knowledge creation
LAMDA Problem Solving: The Cycle of Knowledge Creation

LAMDA: Look, Ask, Model, Discuss, Act

Gemba visits, go see!

Expert input, asking “why?” and “who?”

Modeling to fill knowledge gaps and uncover true root cause(s)

Discussions regarding LAM phases to discuss root cause(s) and appropriate countermeasures

Implementation and follow-up check lists

Similar to PDCA: Plan, Do, Check, Act

Did we visit the Gemba and talk to the many stakeholders?

Did we start Doing well before understanding root cause and effectiveness of countermeasures?

Somewhat similar to DMAIC: Define, Measure, Analyze, Improve, Control

Did we quickly get to the Gemba and gather expert input?

Appropriate for “simple” issues?

slide33

LAMDA by itself is just a nice tool, an instrument

It takes a trained and proficient user to make the tool sing…

….and a conductor, or mentor, to achieve optimal effect

COMPANY CONFIDENTIAL

recent knowledge generation example iceman foam filling
Recent Knowledge Generation Example: Iceman Foam Filling

Problem solving with start to finish story telling

A3 structure with LAMDA integration clarifies thinking

Mentoring, drafts, reviews

Multiple reviews

No speculation or guessing allowed

Show what didn’t work, as well as what worked

slide36

5

You visit a clubhouse one afternoon and book a tee time for early the next morning. Are you prepared for our one hole course?

Look: Gemba visit

2

1

Wind: In face 10mph (+10 yds)

Grain: Left to right (+5 yds)

3

4

5

6

Slope: Back to front (+20 yds)

7

5

8

9

10

11

Ask: Expert input (local pro)

Dew: Reduces slope effect by 50%

Knowns

Distance to hole: 150 yards

Distance for irons:

13

12

14

15

Model: Play

5: 180 yds

6: 170 yds

Best score yet, but noticed cold morning air (+5 yds)

16

17

7: 150 yds

8: 135 yds

Start here

exercise 1 lamda problem solving
Exercise #1: LAMDA problem solving
  • Past problem
    • Name an instance where ‘solution’ was less than ideal?
    • Did you jump to conclusions?
    • Would LAMDA process have helped?
  • Current problem
    • What difficult problem are you now facing at work?
    • Are there knowledge gaps?
    • If so, will LAMDA help you avoid the common traps?
new concept a3 example
New Concept A3 example

Company Confidential

slide40

Many companies launch product or service design efforts based on whatever knowledge they already have about customer needs from questionnaires, focus groups, the opinions of marketing staff and senior engineers … and sometimes the CEO. Often this information is more opinion than data. Teams read through this existing customer information, whether it is relevant to the current project or not, then dive directly into design work. Then, the company has little or no further contact with customers until the product or service is released into the marketplace

In this model, customers are not engaged in the initial development of the ideas or prototyping efforts. The risks of this non-data-driven approach are evident. This pattern provides just one feedback cycle from the market – and it comes after all development costs have been spent and change is extremely expensive. At this juncture company officials say things like, "The customers do not understand all our features." "They treat us like a commodity." "They do not recognize the value of our differentiation." Yet the fault lies with the company, not with customers.

slide41

Companies that have advanced their voice of the customer (VOC) methods to the next level have dozens, if not hundreds, of VOC cycles built into their development processes. They do a lot of quick back-and-forth cycles with customers throughout the design phases, incorporating detailed customer preference information in analysis of trade-off decisions.

To get a deeper understanding of customer needs, innovative companies have explored two ideas – rapid prototyping and tools for making design trade-off decisions.

slide42

GEMBA and VOC

For most companies, customer interaction takes place over dinner or in a meeting room between Sales and Marketing and the actual customer. When it comes to VOC where is GEMBA? What might most companies be doing incorrectly?

Key takeaway: Bad process – no customer interaction except at beginning and end of project. Little Gemba interaction. Good process – interaction with customer throughout the development cycle. Frequent Gemba visits.

voc tracking a3 example
VOC Tracking A3 example

Company Confidential

innovating
Innovating

Cherish your visions and your dreams as they are the children of your soul, the blueprints of your ultimate achievements.

-Napoleon Hill

set based design
Set-based Design

Moves us from thinking in instances to thinking in spaces

Needed when there are knowledge gaps

Convergence: long lead first, short lead last

protostorming
ProtoStorming™

AKA set-based design, learning cycles etc.

Investigating more alternatives early on to optimize the ultimate design and mitigate design loops and risk

Later design freezes now OK, and don’t hurt development cycle times

Helps eliminate false starts as well as the product developer’s all too common lament: “if marketing could only get the design specs correct at the beginning of the project, we could do our jobs and deliver a great product”

DJO has used protostorming for large scope and technically challenging projects since the early 2000s.

protostorming details
ProtoStorming™ Details

Gather about 10-20 motivated people

Brainstorm product or issue for about two hours

Break group into three or four teams

Have each team select one or two brainstorm ideas for development, exploring business issues as well as developing tangible prototypes

Regroup and report out after about four to eight hours of work

Plan next four to eight hours of work (plan, design, build, test, review)

Final report out

Winning ideas move into pipeline, or have accelerated concept development phase

protostorming accelerating the concept development phase
ProtoStorming™: Accelerating the concept development phase

Brainstorming combined with rapid prototyping in a blitz-like atmosphere

Small, passionate teams

Outsiders involved

More ideas investigated in a shorter time period

Reduced dependence on design specs

Technology helps

customerstorming
User interface excellence

Venaflow Elite for DVT/PE prevention

Customerstorming™
invention day
Invention Day

Goal: Allocate time to explore new ideas, solve tangential problems, get mind off of your day job

Frequency: Full day, recurring once every month

Method:

Idea preview at start of day for input and collaboration

Report-out at end of day for traction

Posted on visual “future products” board

exercise 2 blitzing a npd process
Exercise #2: Blitzing a NPD Process

Roles Needed (per team):

Project Manager

Design Engineer

Marketing

Manufacturing Manager

Quality Manager

Purchasing Agent

Document Control

Production Worker

Exercise Basics:

Make new product using non-lean process (e.g. no GEMBA, VOC, learning, scrum-sprint)

Measure lead time

Make NPD Process more agile

Make another new product

Re-measure lead time

Further improvements?

If yes, repeat one more time

Each team competes to improve process and beat competition

exercise 2 take home notes
Exercise #2 Take Home Notes
  • Does this exercise apply, on a larger scope basis, at your company? Why?
  • Where do you see this occurring at your company?
  • What changes could you suggest at your company?
decision making
Decision Making

“If you can’t make the right decisions quickly and effectively, and execute those decisions consistently, your business will lose ground.”

“A good decision executed quickly beats a brilliant decision implemented slowly.”

Paul Rogers and Marcia Blenko, Who has the D?,Harvard Business Review

decision due diligence 5 whys example
Decision Due Diligence: 5 Whys Example

Problem: Puddle of oil on factory floor

Why? Machine is leaking oil

Why? Machine has a broken gasket

Why? We bought gaskets made from a cheap material

Why? Purchasing agents are rewarded and evaluated based on short-term savings rather than on long-term performance

Why? Our purchasing processes haven’t considered lifetime costs

Blitzing the purchasing processes will yield the best benefit, not cleaning up the oil spot or replacing a gasket

why have metrics
Why Have Metrics?

Ever go to a baseball or football game without a scoreboard?

What’s the first thing someone arriving to the game wants to know?

In new product development, how do you know if you are winning?

slide59

Which Measures: How Many?

  • What you measure depends on your business; however, only measure what you can influence or control
  • More than 7 key metrics for an organization is usually too many
  • Do measure lead time on NPD projects in order to drive speed to market
slide60

Rewarding Success / Winning

  • Assuming you hit your goals that you measure, how do you reward success?
  • What’s important to people in regard to rewards (hint – only 14% say salary is #1)
  • Most good (agile) companies use multiple means of measurement and reward to reinforce the desired behaviors
slide61

Compensation / Rewards Rank

  • Stability of job (21%)
  • Health Benefits (20%)
  • Work/life Balance (14%)
  • Salary (14%)
  • Financial/Retirement Benefits (11%)
  • Other (20%)

Source – USA Today, February 2, 2011

slide62

Other Rewards / Recognition

  • Recognition by Senior Management, Peers
  • Team rewards for team efforts (events, dinners, gain-sharing, etc.)
  • On-the-spot bonus
  • “Thank you for such a good job on project XYZ.”
slide64
Gantt charts, right or left hand driven, checklists, 1920’s to present

Stage-gate, late 1980’s to present

Protostorming, Learning cycles, Set-based design, Knowledge driven design, 2000’s to present

R&D Process Evolution

slide65

Due

Diligence

Concept

Development

Detailed Design

Tooling

Launch

slide66

Pros and Cons of Stage-Gate

Pros

  • Clearer understanding of tasks and optimum chronology
  • Bottle necks become more obvious
  • Development rhythm
  • Improved communications

Cons

  • Dependent upon high quality due diligence
  • System doesn’t speed up innovation process: knowledge gaps not clearly identified and filled
  • Potential for speed bumps if dogmatically implemented
  • Not a clear picture of project status

Opportunity

  • Learning and innovation enhancement
  • Decrease dependence on early due diligence. Face it, it is detrimental to try to “spec” every detail at the front end of a project. Specs are better thought of as the documentation of learning/testing
  • Speed cycle times
  • Improved representation of project status
slide67

Product Development Flow Chart

Fill Knowledge Gaps

Fill Knowledge Gaps

Design Input

Final Design Development

Tooling

FAI

Pilot Build

Parts

PQ

Build Inventory

CRITICAL PATH >

Fill Knowledge Gaps

Fill Knowledge Gaps

Marketing: Yellow

Design: Blue

Manufacturing: Green

Quality: Pink

Regulatory: Red

Annex 1

Cell Setup & OQ

Work Instructions

DOC

Component Dwgs

Assembly drawings & BOMs

Launch Package

KNOWLEDGE GENERATION > > >

Product Labels, IFU

Bio Eval Report

RA Requirements

DFM

PFMEA

OACR & Financials

Schedule & core team

Test Plan

Preliminary Testing

Quality Plan

1st Article Testing

Design Input vs Output

FMEA

Marketing

Knowledge Generation Review CLT Approval

Design

Knowledge Generation Review CEA Approval

Manufacturing

Knowledge Generation Review Production Release

Quality

Knowledge Generation Review

Sales Release

exercise applying lean thinking to your next project
Exercise: Applying Lean Thinkingto Your Next Project

Break into groups by existing agility level

Brainstorm techniques to reduce lead time on your next (or current project)

Agree as a group on your top 5 and rank in order of importance

Choose a speaker to share your list with the other groups

review lean characteristics
Review: Lean Characteristics

Continuous improvement culture

Lean methods (e.g. A3 thinking, GEMBA, LAMDA, learning)

Decisions made quickly

Metrics used to reward appropriate behaviors

Suppliers and vendors moving fast

Strategic and operational portfolio planning

Appropriate use of technologies

for more info
For More Info:

Rich Gildersleeve, P.E.

Chief Technology Officer

Senior Vice President, Global R&DDJO GLOBAL, Inc.rich.gildersleeve@djoglobal.com760-734-5665

Jerry Wright, P.E.Senior Vice PresidentLean and Enterprise Excellence DJO GLOBAL, Inc. jerry.wright@djoglobal.com760-734-5690