A Prospective on Developing a Continuous Improvement/Lean Center at the Lewiston/Auburn

Campus

By

Walter E. Lowell, Ed.D

May 2014

Introduction

The Toyota Production System (TPS), commonly referred to as Lean, has swept the world as one of the most effective management systems yet to be developed. It enables companies to prosper and effectively compete in a global economy. Lean is defined as delivering the greatest value to customers by using the fewest resources possible and is built on the two pillars of continuous improvement and respect for people. Companies that implement this strategy have proven to be leaders in their respective markets. Typical results are reported as follows:

50% Reduction in operating costs. 35% to 40% Reduction in program costs. 35% Increase in capacity. 60% Improvement in quality of services/products. 50% Reduction in service/product delivery time. 5% to 10%+ Continuous Improvement per year. Improved customer and employee satisfaction.

While initially Lean production was confined to manufacturing, Lean’s continuous improvement principles and methods are now practiced in all public and private business sectors including health care, education, non-profits and government. Unfortunately, there are many companies that are unaware or misunderstand how this philosophy and powerful techniques can help their organizations.

The Lewiston/Auburn College of the University of Southern Maine has been a leader within the University of Maine system in promoting, exploring and applying Lean thinking to its operations and also sees Lean’s potential to serve as an economic development strategy and tool for its community and region. The strategy for LAC to partner with community businesses is a central theme to the vision the University is promoting i.e. a “Metropolitan University” model; a model LAC is very familiar with.

This exploration of the establishment of a Lean Institute at the Lewiston-Auburn Campus (LAC) of the University of Southern Maine is a summation of the feasibility and potential next steps LAC/USM can take to provide a new opportunity that benefits LAC through enhanced enrollment, while at the same time, offering a new and proven management approach to regional businesses and organizations.

There were two objectives for this report:

Objective 1. Identify the audience and need for a regional training Institute for Continuing Improvement (Lean) at Lewiston-Auburn College. The Institute would attract local, regional and state-wide audiences utilizing workshops, short courses, and coaching, and field practice based on the professional needs of the community.

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Objective 2. Provide a comprehensive report describing the factors that enhance or deter establishing such an institute with a timetable and specific strategies that might be employed to begin such a venture. This work commenced in early January 2014 and included a team of LAC staff members to assist in evaluating data as it was collected for the project. The development team met weekly as necessary and served as a valuable resource throughout the project. Once the interview process was complete the team met for a half day session to process and summarizes results and plan subsequent steps. Team members are listed in the attached appendix .

In addition to LAC sponsorship, the Androscoggin Chamber of Commerce (ACC) has agreed to be a joint sponsor/partner in any entity to be developed. The idea behind this partnership was the practical nature of bringing together customized Continuous Improvement/Lean knowledge and skills offered by the university to meet identified skill and knowledge needs of the members of the ACC and other state-wide interested organizations.

This report provides the current status of the project and includes a discussion of the methods used, the results of data collected to-date, a summary of a Strengths, Weakness, Opportunity and Threats (SWOT) analysis and recommendations for next steps.

Methods

Given the time frame for exploring the feasibility of developing a new function involving a partnership between both LAC and ACC we used a relatively new approach developed by Ash Maurya and published in his book titled Running Lean. Running Lean details a rapid development methodology that involves customer feedback to continuously improve a product or service as it is being developed. Central to the Running Lean process is the concept of a “Lean Canvas” a template of which is displayed in Figure 1.

The Lean Canvas purpose is to focus work and quickly assess the assumptions that exist around the need for a new product or service, in this case the Lean Institute. The development team initially spent a few sessions brainstorming and developing a model of what the Lean Institute might look like, what problems it would solve, who were the intended customers and what benefit it would offer potential customers. The team developed a prototype of the problems companies were experiencing with CI/Lean and the solutions the proposed Lean Institute would use to solve them. Critical information concerning the Lean Institute was documented by the development team using the format of the Lean Canvas and this was then used to assist in

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gathering feedback from potential customers. This data was considered speculative until we could confirm it via the feedback from potential customers.

The Running Lean process recommends talking to potential customers in order to get feedback from them about the proposed Lean Institute, potential demand for it, needs and their respective interest. The interview process was kept as standard as possible and began with a brief description of the proposed Lean Institute and what problems it would solve. The development team settled on the following 4 problems:

1. Potential customers do not know about the value and need of Lean/Continuous Improvement (CI) in their organizations or about companies that are using it.

2. There is no venue that offers a comprehensive and individualized program or resources to learn about Lean and Continuous Improvement.

3. Many organizations are threatened by challenges of today's economy and lack the unique insights Lean methods, and principles provide to help them to survive and prosper in this new economy and they have no place to go to get it.

4. All organizations are challenged with finding workers with skills and experience in Lean/CI.

Figure1

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Initially, the interview process was seeking confirmation that the problems identified above were problems companies in fact were facing. This was followed by an unstructured discussion in which the interviewees were encouraged to present issues and concerns that they felt their company was having as well as any unmet needs as they relate to CI/Lean. These were recorded and served as a data point for the development team to discover what current companies had for needs over and above their current capability and to what extent the development teams initial problem set was or was not verified.

Once discussed with the development team it was used to adjust the Lean Canvas to more accurately reflect the feedback from the interviews. The adjusted Lean Canvas is displayed in Figure 2.

Figure 2

The development team completed face to face interviews with approximately 11 companies all of whom had Lean/CI initiatives in place at varying levels of development. All had staff dedicated to Lean/CI efforts. Companies interviewed are listed in the appendix. Interviewees were people who have some understanding of the community needs and/or businesses in their region and have Lean experience ranging from just getting started to advanced Lean/CI programs. The development team deliberately focused on companies with CI/Lean programs

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since they would understand CI/Lean concepts and would be able to speak to advantageous and the challenges they faced implementing them.

As the development team began processing results it felt that the term ‘Institute’ was too formal it understood the term and was not reflective of what they saw as the emerging need. The development team struggled with identifying a new name. For the remainder of this report then term Continuous Improvement/Lean Center (CILC) is used instead of the Lean Institute since this more accurately describes what the development team aims to create here at LAC/USM.

Interview Results

Need/Demand. The first goal of this consult was to establish the need/demand for a Continuous Improvement/Lean Center (CILC). The results of the interviews indicate that there is a strong demand for training at all levels from line staff to management. It is noteworthy that all interviewees expressed interest in this project and wanted to know more and some offered to volunteer assistance once it got started.

While interviewees acknowledge that some training was available it was considered to be too expensive, too distant, and episodic or limited in duration. Moreover, it was noted by interviewees that it was difficult to know what training was available, who was providing it as well as which companies were practicing CI/Lean and where these companies were in their implementation process. Interviewees noted that current available training was not robust enough to assist companies to move their Lean/Continuous Improvement programs forward in the way interviewees thought possible.

The identified needs included a wide variety of specific types of training (5 S, VS mapping etc), internships and Executive leadership training. Figure 3 summarizes the expressed needs around CI/Lean skill levels (i.e. ‘what to do’) which include Executive, Management, Subject Matter Experts, CI/Lean practice, and Awareness. Lean/CI knowledge level (i.e. ‘what to know’) within a company would at minimum include Culture Change, Systems Theory, Lean Methods and Principles, Standard Work and Awareness.

These skill and knowledge levels represent targeted training and education that would be provided to respective employees within a company practicing Lean/CI and would be the focus of education and training programs of the proposed Continuous Improvement/Lean Center (CILC) detailed below.

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The Continuous Improvement Lean Center (CILC) at LAC. As depicted in Figure 4, the Continuous Improvement/Lean Center (CILC) would be created as a result of a formal partnership between LAC and ACC either by a memorandum of agreement (MOA) or other such vehicle specifying roles and responsibilities for each entity. Roles and responsibilities will need to be articulated by the LAC and ACC and this would be an initial first step for both. A proposed listing is displayed in Table 1.

The CILC would have a physical presence at the LAC either with an office or, better still, a Continuous Improvement/Lean Laboratory where LAC would create, host and coordinate events to include education courses and programs. These would be developed as they were identified via identified needs from ACC. Events could also be hosted at respective ACC companies particularly continuous improvement practitioner facilitated improvement events. Interviewees also mentioned that a CILC would offer a menu of services that companies could select from depending on need. These would include activities and events ranging from brown bag awareness sessions to advanced degree programs at the College.

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The CILC

Skill Levels Knowledge Levels

May 2014

The Continuous Improvement/Lean Center (CILC)

Figure 3

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Roles and Responsibilities

LAC/USM

House physical location of CILC.

Sponsor and coordinate events with ACC.

Promote and coordinate CILC programs withinbroader university system.

Promotion of CI/Lean programs to state-wideprivate and public.

Develop and create CI/Lean programs.

Development and maintain Web based Network

Recruit CI/Lean affiliates.

Membership on CILC Advisory Council.

Host Advisory council meetings.

Other TBD.

ACC

Market CICL to ACC and regional members

Sponsor and coordinate events within ACC.

Promote and coordinate CILC programs.

Recruit ACC membership to the Network.

Sponsor improvement events.

Membership on CILC Advisory Council.

Host Advisory council meetings.

Other TBD.Table 1

It is of interest that companies practicing Lean see the CILC as something they could use. These comments come from individuals who are leading a CI/Lean effort in their respective organizations. A summary of the types of programs that might be offered is displayed in Figure 5.

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The CILC

LAC ACC

May 2014

The Network

Figure 4

The Continuous Improvement/Lean Center (CILC) at LAC/USM

The need is multi-level targeting leaders of organizations and line staff. Interviewees acknowledged the current efforts in the Lean Community (the Lean Summit, SME Round Tables, etc.), but none of these seemed to meet the needs as described to us, that is these efforts were episodic or ‘show and tell’ and not effective training. One critical problem noted was that often people left these sessions with no idea about what to do in their particular organizations which suggested a need for mentoring and internships at all skill levels in addition to training.

We also heard issues around ‘the price point’ which basically meant that current offerings are prohibitively expensive. We heard that in addition to workshops, seminars and brown bags the university should develop basic Lean/Continuous improvement courses and that there were students currently calling for this.

Interviewees stated that no student should be allowed to graduate without having some Lean/CI knowledge since it was critical for all work environments pointing to a significant opportunity for LAC/USM to add CI/Lean offerings to current undergraduate and graduate degree programs. The advantage here is that students would then be able to enter the workforce with knowledge and skills to immediately make improvements in organizations. Prospective companies would see them having very desirable technical skills that they would

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Menu of Offerings

Brown Bags - AwarenessSpecialized Workshops

Boot Camps –CIP Education Programs

CertificateBS - MinorMS -Major

InternshipsExecutive LeadershipPractitioner Resources

Skill Levels Knowledge Levels

Study Missions

Figure 5

The Continuous Improvement/Lean Center (CILC) at LAC/USM

bring to their respective company or organization. In addition, the CILC could also serve as a support system for these graduates. This program could be marketed to the wider university, other colleges within the state, as well as private and public organizations outside the ACC.

A key function of the CILC is the creation and maintenance of a database which would be designed, hosted and maintain by the CILC at LAC. The database would be a web based repository of affiliates of the CILC and connects LAC, CI/Lean practitioners (suppliers) and ACC (customers) together as affiliates. While individuals with knowledge of Lean expertise are not common and/or readily available many do exist in organizations in and around the region. One role for the CILC through both LAC and ACC would be to identify and recruit members to become affiliates of the CILC since they would be an important source of instructors and/or consultants for Lean events, programs and courses hosted by the CILC. The detail design and operation of the web based repository is work to be determined as this initiative unfolds.

Strength, Weakness, Opportunity, Threat (SWOT) Analysis

A SWOT analysis was performed by the development team once it had developed a vision of the CILC and how it might work. SWOT refers to analyzing the strengths, weaknesses, opportunities and threats of the proposed CILC. Here the development team brainstormed SWOT ideas. These were then grouped into major themes and summarized below. The data based on each theme is detailed in the appendix.

Strengths. The team saw as one of the potential CILC ‘s greatest strengths was the partnership with the Androscoggin Chamber of Commerce for the ACC and its current leadership are a well known entity and has a large membership to draw upon. It already has an existing relationship with the LAC which establishes credibility from the outset. The ACC also gave us a strong indication that this was an important need and that they would be helpful in getting the CILC started. The team also saw there was a strong regional economic need for the CILC.

Weaknesses. Several key weaknesses were identified. These include the recognition that any change is always difficult to achieve if there is no compelling reason to change. It is thought, however, given the adverse economic climate within the state and region impacting ACC businesses and LAC there is sufficient motivation for a change of this type to take place. Other weaknesses were the availability of skilled Lean Practitioners and financial resources to support the proposed CILC. It is recommended that the proposed CILC would require one or two full time staff to coordinate the proposed components identified to make it work. Issues of operational ownership of the CILC were also identified. There is also a concern about terminology. In particular, since the term ‘Lean’ can have negative connotations and is not well understood by our potential customers, it presents a challenge to determine the best banding for this effort ( i.e. What is the best ‘branding’ for the CILC that meets Doug Hall’s criteria of

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being ‘meaningfully unique’?) As an aside here, Doug Hall has created a Center for Innovation at UMO which offers courses in innovation to various university majors, both undergraduate and graduates which are design to bring innovation skill and training to their employers as they enter the workforce. This is a similar model the development team is proposing here by further strengthening students understanding of how ‘work works’ using the lean/CI model. Doug Hall’s Innovation Engineering program also offers a potential opportunity for CILC collaboration.

Threats. The development team felt it was important to sell the idea of the CILC properly to the larger University since there is a concern around ownership issues and that the dilution of direction, momentum and intent is possible given the current status of the university at large. Fundamental to the CILC is an associated web based network which is proposed to be a source of CILC affiliates to supply the demand for training, mentoring and other associate activities. One concern is whether enough of these people would be available at the required skill level to support the quality and demand for services especially since a dissatisfied customer would be quickly known within the ACC. One immediate next step for the CILC would be to quickly identify CI/Lean availability practitioners. It was suggested that one way to counter dissatisfied customers is to offer a money back guarantee.

Opportunities. One outcome of the proposed CILC is to assist the economic development of the local community by providing state-of-the-art management strategies and techniques that have a global record of improving the financial health of organizations. Local business would prosper which in turn would help the overall community prosper as well. Thus, a significant opportunity exists to enhance regional pride and economic effort. The team saw the synergy that would be developed among companies as each demonstrate how improved operations better meet customer demand. In addition, since LAC was established to support the local community this effort would further demonstrate how the wider university’s goal of creating a “metropolitan university” can draw in students as well as impacting the overall economic health of the community. In this regard, LAC would be a leader in the new direction the larger University is proposing. The CILC could also augment the work of the Center for Innovation at UMO.

Proposed considerations and next steps

Objective 1. There is an expressed need from companies that were interviewed for additional and expanded education and training in CI/Lean thinking. This was a universal need expressed by all representatives of the companies we interviewed. Most if not all of them had a Lean/CI

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program at some level of development and all interviewees saw the value of implementing the core fundamentals of Lean principles and methods. It was acknowledged that many companies are unaware of CI/ Lean thinking and the benefits it can bring to them. In fact the size of the market for these companies within and outside the ACC in the state is significant. Thus, marketing the CILC in promoting awareness is an important component to this initiative.

As noted previously, the proposed CILC provides a significant opportunity to enhance regional pride and economic effort. In addition, since LAC was establish to support the local community this effort would further demonstrate how a “metropolitan university” can draw in students and impact the overall economic health of the community.

Given the many different entities that would be at play in CILC it is important to understand the context of the proposed CILC and how the various entities both proposed and existing would fit together. These relationships are displayed in Figure 5 and include three components: LAC, ACC, and the CILC at the center.

As noted above, the development team proposes that LAC and ACC would exist in a partnership and that partnership is embodied in the CILC. The CILC itself would exist virtually in both organizations and would establish affiliations through membership fees including individual Lean practitioners (suppliers) and customers (ACC organizations, companies and businesses).

It is proposed that the CILC would be the affiliate sponsor between suppliers and customers and serve to match customer need with supplier capability. How suppliers might contract with

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customers remains to be determined. The details of which need to be determined between LAC and ACC. While it is anticipated some portion of fees will be dedicated to supporting the CILC and the ACC how this would be arranged was beyond the scope of this work. However, other Centers in the university do have reimbursement models which can be reviewed and possibly adopted. Ideally, the fee structure established would pay for the CILC operations.

One common theme that interviewees expressed was the importance of the support of executive and management leadership involved and leading a Lean/CI implementation effort since many of these initiatives fail when leaders do not understand the basic principles and their role in promoting them or, as frequently happens, pass the responsibility on to someone else in the organization. Consequently, the development team felt that any organization expressing an interest in participating would need to demonstrate executive commitment as a minimum requirement for participation. Table 2 lists some of these criteria.

These four minimum requirements for a company to participate include 1) Executive commitment to lead change for the better, 2) a willingness to take the time to learn, 3) a willingness and ability to follow through the effort and 4) complete the Freemium. The Freemium is offered to a participating company and includes 8 hours of training and consultation in CI/Lean methods and principles, attendance at a study mission to a Lean company to see Lean in action, and participation in one improvement event at their respective company - all of which are free to the participating company. The Freemium is a no cost marketing strategy to lower barriers to companies in order to enable them to explore the advantages of CI/Lean in their organizations. It is proposed that the CILC will also offer a money back guarantee if the company is not satisfied with the results.

The development team envisions the CILC to be supported by a web hosted database containing both suppliers and customers. Affiliates would be registered in the database as a supplier (i.e. Lean practitioners) or as a customer (i.e. a company needing assistance with developing its CI/Lean program). Suppliers would be individuals who are available and skilled at delivering and/or supporting various CI/Lean improvement capabilities to organizations, and ideally, customers could access the database to identify suppliers that would provide specific services. Lean and continuous improvement events and program would also be listed here.

The partnership between LAC and ACC through the CILC would establish an Advisory Council which would advise the CILC. Members of the Advisory Council would be selected from interested companies within the LAC and ACC membership as well as companies currently practicing CI/Lean in their respective organizations. Proposed Advisory Council functions are listed in Table 3.

Table 2

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The above proposal involves the creation of a unique entity to support an identified need in the Androscoggin region and to a broader extent the state of Maine. There is no doubt that there is a clear demand for such a service and that the potential if fully realized would provide a significant impetus to improving the economic conditions and well being of companies, businesses and organizations in the region and it would serve as a model for emulation in other areas of the state.

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However, there still is considerable effort that must be completed to move the CILC from the drawing board to reality. There are considerable challenges to be faced, such as establishing a new entity, the partnership between LAC and ACC to create the CILC, within the university environment, developing funding and reimbursement mechanisms, marketing, and infrastructure development.

Objective 2. The second objective of this project was to establish an approximate time frame including tasks that must be accomplished to move the CILC forward. A draft of these steps is outlined in Table 4 but is noted that these steps may well occur in a different order then proposed. While many of these steps can run in parallel some, particularly steps 2 - 4, are critical to begin the effort and it will be noted that other steps are dependent upon these. Table 4 allows for three months for these to be decided, but clearly they may be completed in a shorter time period.

If an effort of this magnitude is to be successful it is recommended that it is staffed with one or preferably two people. This is because there are many parts to this effort that still need to be developed and coordinated in order to continue to develop the CILC, but also to maintain operations. Careful thought to this needs to be given by the sponsors and development team before embarking on a pilot.

It should be noted as part of the Running Lean Model step 9 & 10 would be to begin a pilot and identify a minimal viable product/service (MVP) in order to actually test how this might work with a company and to continue to elicit additional feedback to further refine the CILC. The pilot could begin anytime once tasks 2-4 are decided.

Table 5 displays the Running Lean Canvas after the development team analyzed the interview data and modified the Lean Canvas accordingly and represents the current state of development for the CILC as of this writing. Items that must be completed are the cost structure analysis and details on the reimbursement structure as noted previously. The Lean Canvas is a working document and as new formation is uncovered the Lean Canvas will be modified again.

Table 4

Task June July Aug

Sept Oct

Nov Dec

1. Present to Sponsors & Partners

2. Decide to create the CILC3. Decide and develop funding – LAC & ACC

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4. Decide and Create Infrastructure5. Continue feedback from potential customers6. Create and develop Advisory Council7. Begin Marketing8. Create and develop Web based presence9. Begin a pilot10. Finalize a minimum viable product11. Create Menu Offerings12. Recruit Members

Table 5

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Appendix

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Lean Center Development Team Participants

January – May 2014

Wendy Mitchell

Marcel Gagne

Luisa Scott

Lynn Philbrick

Evelyn Greenlaw

Jodi Redmun

Pam Roy

Diane Marquis

Walter Lowell

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List of Companies Interviewed

Hypothesis Testing - the Learning Cycle

Round #1 - AdvisorsName SectorJoyce Gibson Higher EdArthur Davis GovernmentChip Morrison BusinessRob Kilgore BusinessKim Jenkins Higher Ed

Round #2 - Organizations practicing LeanOrganization Name PositionNew Balance Raye Wentworth Lean LeadSt. Mary's Diane Marquis Lean LeadGoodwill Jim Demint Lean LeadCMMC Tina Legere PresidentLonza Jon Kirsch Lean LeadIdex Ron Dupuis VP - Lean LeadJotul Paul Andrews Lean LeadAHHC Julie Shackley CEOUSM Greg Cavanaugh PMGeiger Peter Geiger CEOIND Nancy DeSisto CIP

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