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The 5 Whys of Lean

When you think about the power behind the five (5) whys process for lean, it’s best to reflect on a conversation with a young child.  The inquisitiveness at that young age when they repeatedly ask “why” in an exhaustive fashion. While believing the first couple of responses should have quelled their constant but “why” and yet it does not, there is delight in the end with successfully helping them find the true answer to their original why.  What is fascinating with this process is that it will drive an understanding of the core why (root cause).

There is a tendency when examining a failure in a business process to stop when the first or second why is answered so we can move onto the next business issue.  The shortcut: stopping at the first or second why does not allow an organization to get to the real why (root cause) and thus does not allow for the creation of a solution that prevents the error from occurring again.

What is the five (5) whys analysis process:

  1. State the specific problem that needs to be addressed
  2. Identify and categorize the possible causes for that problem (the first “why”) and attach any supporting documents
  3. Rate each cause based on the likelihood that it led to the problem
  4. Move forward with the top-rated cause and identify the possible causes for that problem (the second “why”)
  5. Repeat steps 1–4 until the root cause of the problem is identified
  6. Develop an action plan to resolve and mitigate the identified root cause

Why use the five (5) whys process?

  1. Identifies the root cause, not just the symptoms
  2. Allows users to perform an evidence-based analysis
  3. Ultimately eliminates issues in the system for good
  4. Seeks to drive improvements and welcomes change
  5. Builds a culture that embraces progress

The power of the five (5) whys is to poke yoke (error proof) the process where the root cause occurred, and the benefits come in many forms.  The benefits include improved customer experience, process waste eliminated, and employee satisfaction to name a few.  To learn more about lean please contact xSynergy Solutions at info@xsynergysolutions.com

xSynergy Solutions is a full-service business transformation firm located in Centennial, CO. We impact every aspect of your business from marketing to operational strategies.  Learn more at xsynergysolutions.com.

What is Sales & Operations Planning (S&OP)?

We get asked that question a lot, and after describing what S&OP is we often hear; “Oh, that will not work within my company because we are different, and there is too much variability in our demand patterns to effectively plan” or simply, “That will not work in our industry”. Our leadership team has worked in the technology, manufacturing, and defense & aerospace industries for over thirty years and has witnessed firsthand the power of S&OP.

So what is Sales & Operations Planning? Let us start by breaking down the elements.  The first critical fundamental to understand is that S&OP is a business management process where leadership and executive teams meet to ensure each business function is aligned to balance supply and demand.  The executive leadership team also has an accountability to meet monthly in the executive sponsored S&OP meeting to make decisions to assure that supply and demand.

These decisions will be focused the demand forecast (forward volumes to be produced), capacity plan (how many people or how much equipment do we need to produce the demand), inventory plan (what inventory investments are required), surge plan (what customers or product could surge in the last two weeks of a month or quarter and can we support that surge) and lastly what risk could occur and how do we manage or mitigate it?

These are critical business decisions that require numerous decision-makers. Those decision-makers include Sales, Finance, Supply Chain, Operations, Manufacturing, Engineering, and the S&OP functional leader.  It is the responsibility of the S&OP leader to facilitate the monthly meeting, guide the executive team through that meeting, and ensure that the required decisions are made to balance demand and supply.

It is important to note that before that monthly executive decision-making meeting there is a tremendous amount of work effort that occurs within the demand and supply planning functional groups.  It is their accountability to start the planning cycle which is as follows:

  1. Data Analysis: In this phase of the planning cycle the planners are actualizing and analyzing the prior periods’ performance. Meaning what was forecasted compared to what was produced or consumed against that forecast (accuracy and bias), the inventory forecast; did we meet the financial inventory forecasted for the prior month ending inventory, and supply optimization; did we level-load manufacturing and optimize the resources people and equipment?  This and then analyze what caused variances to the plan.
  2. Demand Planning: In this phase, the demand planners are simulating planning scenarios that include product mix performance change, average sales price performance, and the impact on the demand, and customer surge performance. These are only a few examples of the scenarios that a demand planner will run. The goal is to determine if there are changes required to the forward demand twelve (12) month forecast.
  3. Supply Planning: In this phase the supply planners are utilizing the output of the new demand forecast to access impact to inventory (do we need to purchase more or less), running the capacity planning algorithms (do we need more resources or will be constrained by machine capacity)? The goal is to determine what, if any, resource changes are required to supply in the future time fences to support the new demand plan.
  4. Pre-S&OP Meeting: This meeting allows the supply and demand planners to present the output of their analysis to key stakeholders which include Manufacturing, Engineering, Customer Operations, Finance, and Quality. The key takeaway of this meeting is to discuss any other factors that could influence the demand or supply plan before presenting to the executive S&OP leadership team.
  5. Preparation for Executive S&OP Meeting: Now its time to tell the story and provide the likely demand and supply scenarios that will lead to decisions for both demand and supply by the executive team.

After all this work, effort occurs and the decisions are made by the executive team, the respective teams will implement the approved demand and supply plans and then the cycle starts again.

The exquisiteness of the S&OP processes is that when there is planning efficacy there is a significant impact to the customers’ experience in relation to a vastly improved on-time delivery, cost reductions occur resulting from improved inventory turns and resource utilization; less or planned overtime, and more efficient operations, cross-functional team collaboration, an executive team that is aligned and risk understood and planned for.

xSynergy Solutions is a full-service business transformation firm located in Centennial, CO. We impact every aspect f your business from the marketing and operational strategies to your IT infrastructure-even the energy usage of your facilities. Learn more at https://xsynergysolutions.com.