Kaizen Kreativity: Practical Excellence in the Everyday

Kaizen Kreativity: Practical Excellence in the Everyday

Written by  Strategy Magazine

Kaizen. It’s what the Japanese use to define "improvement" or a "change for the best.” In business, it’s a system of continuous improvement in any number of areas, to include technology, productivity, culture, and the like. Tom DePaoli, Management Program Director at Marian University in Fond du Lac Wisconsin, and CEO of Apollo Solutions, knows a thing or two about kaizen and its best practices. He found a way to share it in his newly released book, Kaizen Kreativity (Oops!):Don't Be Afraid of Looking Stupid. I'm an Expert at It.

STRATEGY: Tell us in your own words about kaizen.

DEPAOLI: The kaizen concept was originally created as part of the Toyota Production System and it’s still one of the most widely-used programs in the manufacturing industry. However, it works equally well in service industries. Toyota originally created it to reduce waste and production errors. The kaizen concept has now evolved into a continuous improvement tool that looks at all aspects of a work process.

STRATEGY: What motivated you to write the book?

DEPAOLI:I wanted to share my personal experiences with the kaizen technique and my success stories. I wanted to give the readers a clear understanding of what works and what doesn’t work. The kaizen can be a fun and creative way to make progress and I wanted the reader to make it enjoyable for everyone.

STRATEGY: And, who will find the most benefit from reading it?

DEPAOLI: The book is written for anyone interested in process improvement or the kaizen concept. Chapter Two, “How to Read This Book,” guides both the experienced kaizen practitioner and new practitioner in a recommended approach to reading the book and using the kaizen method.

STRATEGY: What exactly happens when a kaizen event occurs?

DEPAOLI: There are over forty actual stories in the book that show which kaizen tool was used and how the tool was successful. A kaizen event requires superb organization and a dedicated team willing to change for the better. Above all, an enthusiastic sponsor is critical for success. Readers learn much more from storytelling.

STRATEGY: What about the name? What made you choose this one in particular?

DEPAOLI: I wanted people to feel comfortable in making mistakes and not to have a fear of looking stupid. We learn the most from our mistakes. I certainly have.

DePaoli explains that readers can expect to learn how to avoid the same mistakes he has made, while increasing the probability of success. “Organization of a kaizen event is critical,” he says. “I hope the book gives readers a structure and the tools for a kaizen event.” You can take the first step toward creating your own with the purchase of DePaoli’s book. To visit his site, where you can learn more and purchase Kaizen Kreativity (Oops!): Don't Be Afraid of Looking Stupid. I'm an Expert at It, click here.

Tom DePaoli

Dr. Tom DePaoli is the Management Program Director at Marian University in Fond du Lac, Wisconsin, and the Principal (CEO) of Apollo Solutions (www.apollosolutions.us) which does general business consulting in the supply chain, Lean Six Sigma and human resources areas. Recently he retired from the Navy Reserve after over 30 years of service. In other civilian careers, he was a supply chain and human resources executive with corporate purchasing turnaround experience and Lean Six Sigma deployments. He is the author of: Kaizen Kreativity (Oops!), Common Sense Purchasing,  Common Sense Supply Management and Growing up Italian in the 50s.  His Amazon author’s page is   https://www.amazon.com/author/tomdepaoli

Kaizen: Small Changes, Spectacular Results

Kaizen: Small Changes, Spectacular Results

By Susan Avery

March 27, 2014 at 10:58 AM

Charged with leading process improvement? Stop beating yourself up over it!  

While the responsibility may seem daunting--and process change is an area where procurement must take a lead role--there is a way that can help you realize real results for your organization. 

Kaizen, a philosophy of reducing waste while constantly improving the process, is one way. In fact, Kaizen means change for the better. 

That’s thinking of Dr. Tom DePaoli, Management Program Director at Marian University in Fond du Lac, Wis. DePaoli, also the CEO at business consulting firm Apollo Solutions, is the author of the new book Kaizen Kreativity (Oops!)--Don’t Be Afraid of Looking Stupid. I’m an Expert at It. 

“What happens a lot of time with process improvement is that consultants are very dogmatic with their methodology,” he tells My Purchasing Center. “People are intimidated. I try to make it fun and I encourage people to be creative.” 

DePaoli's book, Kaizen Kreativity, is a fundamental field manual or guide, in which he simplifies the methodology for the reader, shares success stories, and points out mistakes he’s made using Kaizen. He wrote the book for both novice and experienced users.  

In it, he writes, “the book is a summary of many of the Kaizen lessons that I learned in my career...I have woven together many of the lessons learned to help you avoid the numerous mistakes that I have made....I strongly believe in the Kaizen process.”

DePaoli reinterprets the definition of Kaizen for the reader as “a creative but structured approach to improve a process or to eliminate anything of non value, by the people who actually do the work. 

That’s important to him. “I want to give everyone a broader perspective of process improvement,” he says. “The people who benefit the most are those who are actually doing the work. That’s because they understand the process. Kaizen is going to make it better for them and, ultimately, for the customer, which is important.” DePaoli says Kaizen can be used by large and small companies for such projects as high operating costs, low yield rate, long cycle time and unpredictable quality. 

He firmly believes that procurement should take the lead on process improvement and has written about the topic in his blog at My Purchasing Center. Not only is procurement a master at managing relationships, but also “there are only two departments that generate revenue for a company--sales and procurement. Why wouldn’t procurement try to improve processes and generate more revenue?”

DePaoli shares a story of when he was working as head of procurement for company with an annual spend of $500 million and he was asked to take the organization from tactical to strategic. The company reduced head count from eight to four buyers and the plant manager was not committed to the transformation. Spend data was scarce and procurement spent much of its time “fighting fires.” No one could explain the PO process. 

He mapped the process and designed a new PO form for the plant’s “power” requisitioners. He took procurement out of the process and mandated requisitioners purchase from preferred suppliers. He created a new process map, manual and SOP for the power requisitioners. All this, DePaoli relates in the book, drastically reduced procurement’s workload, the supplier base and error rates. Eventually, the organization began using pcards for these purchases. Soon procurement started asking to work on more strategic initiatives.  

In this case, he was creative with Kaizen. “We essentially used all the tools, but not quite in the sequence recommended.” 

DePaoli also shares mistakes he’s seen. A big one is having a sponsor who is not committed to Kaizen. “I’ve seen organizations build a team that’s raring to go, but the sponsor drags his feet on implementation. Imagine what that does to credibility and morale.” 

Another is that some people proceed without a full understanding of the tools. “It’s difficult to teach and examine the process at the same time,” DePaoli says. “I like to teach the tools before I do the Kaizen.” He also likes to use common experiences in his teaching to make his point. 

In addition to the success stories and common mistakes, the 167-page book contains training exercises as well as a training presentation, a roadmap, tips, a glossary of terms and lots more.

DePaoli is the author of the books Common Sense Purchasing and Common Sense Supply Management. His blogs appear regularly at My Purchasing Center. The books are available at Amazon.com. 

Also see: DePaoli's blog at My Purchasing Center: How Can We Get Young People Interested in Supply Chain Professions?

Tags: purchasing Supply chain management Procurement sourcing process change Kaizen

Category: News Article

Susan Avery

Susan Avery is Chief Editor at My Purchasing Center. She writes articles, blogs and white papers and manages and creates other content for the online procurement and supply management publication. She produces and moderates webcasts. Susan has more than 25 years experience covering procurement and supply management for Purchasing magazine and Purchasing.com. 

- See more at: http://www.mypurchasingcenter.com/purchasing/industry-articles/kaizen-small-changes-spectacular-results/#sthash.9yLlZ8k5.dpuf

Long Term Strategic Plan

Long Term Strategic Plan

Over 95% of purchasing or supply management organizations do not have a long-term strategic plan. This is not surprising given the dynamic and hectic pace of purchasing organizations.  Many of the plans that are completed are done once, and put in a three ring binder or a hard drive to never be referenced again. These plans do require a lot of effort and support from top management to become useful and meaningful. They are essential to keeping purchasing on track and focused on the most important supply chain improvement efforts.  Long-term plans serve as a great focal point for purchasing and insure that constant fire fighting and other upsets do not overwhelm their efforts. They can serve as guides for the stages of organizational transformation that a purchasing department wants to achieve, and reveal to non-purchasing personnel, purchasing’s long-range direction.  First off, create a vision and mission statement that aligns with the organization’s vision and mission statement. Be bold and make sure people realize that you are aiming for supply management not traditional bureaucratic purchasing. Try to gain a broad consensus and gather input from surveys, one-on-one meetings, research and as many employees, suppliers and customers as possible.

There are limitations to this guide. I am certain that I have missed some areas but I have tried to be as comprehensive as possible.  Use this document as a guide and checklist not a dogmatic methodology.  It is extremely difficult to predict the future as technology and the macro environment are rapidly changing. Global events can radically alter the supply chain and require new innovative strategies. Collaboration is the norm now, but collaboration can also be cyclical and have peaks and valleys of cooperation. People are the strength of an organization and any strategic plan that does not focus on people development is woefully inadequate. Many companies also have to cope with dealing with multi-generational group differences.

New products can require new supply chain tactics and alter your product mix landscape. Competitive pressures can often dictate rapid responses and major changes in product marketing and sourcing. Communication is becoming even more critical in this rapid paced world. The selling or marketing of the strategic plan is even more crucial.

Once in place, a strategic plan is much easier to update, review and fine tune.  It is important to keep it dynamic, up to date and a living document.  I hope this guide motivates the reader to take the journey of completing a strategic plan. Good luck in the journey!

Use Storyboards in Purchasing

Market Your Purchasing Successes with the Use of Storyboards

Purchasing professionals need to realize that they must not only market their purchasing strategies but their successes. Many purchasing professionals neglect to create a marketing plan for their organization. I use the term marketing plan synonymously with communication plan.

Some of the goals and techniques of your marketing-communication plan should be to educate top management on your strategic plans, publish results of supplier performance and surveys, publish internal customer survey results, educate personnel on purchasing and supply chain principles, emails, hold roundtables, hold town meetings, use social media, utilize newsletters, use a supply chain specific web pages, monthly letters, and announcement of successes.

Storyboards are a great way to market your successes.  Storyboards require you to be disciplined in your message and fully understand your results and assertions. You must limit your words and concentrate on the essentials. Thus you must communicate explicitly and right to the point for your audience. You need to strip away the technical argot and make sure the audience can easily grasp what you have accomplished, even with a very limited knowledge of purchasing. Storyboards should adhere to a lean principle of visibility. Storyboards must be understood quickly with the maximum use of graphics, not words, spreadsheets or numbers. This is not an easy task, as a consultant we would often spent hours and days trying to accomplish this with a storyboard. Obviously purchasing often does not have the talent (full time illustrator) or resources to do this meticulously, but this is intended to be a guide.

There is no one catch all formula or template for storyboards. Often how you employ them and your particular style depends on the culture and communication norms of your organization. The important aspect is to make sure that you communicate your successes in a manner that can be readily understood by both purchasing and non-purchasing personnel. Think of storyboards as intelligent commercials that must be brief, easily remembered and upbeat.

I have provided an example of a storyboard that we used to communicate a purchase order success story. The organization that it was used in was very heavily into Lean Six Sigma, Kaizens and the DMAIC methodology (Define-Measure-Analyze-Improve-Control). We used this familiar DMAIC format to help people understand and follow what we did.  It still has too many words and numbers but we needed to insure people realized the scope of what we had accomplished. The storyboard was well received and readily understood by employees. I highly recommend purchasing and supply chain professionals consider using storyboards to communicate your successes.

Purchasing has continuously demonstrated their impact to the bottom line of an organization. It has been well documented and universality recognized. Then why do many companies refuse to take advantage of this cost-saving resource? Why do executives still remain skeptical of purchasing’s value? In many organizations purchased materials and services account for over 50% of the cost of goods sold; yet purchasing is often relegated to a bureaucratic mundane dungeon of clerical functions.
Some of the fault lies in purchasing itself. Purchasing personnel are notoriously inept at marketing and selling their ideas and suggestions. They are often a harried bunch running around from firefight to firefight. Most do not even have a good or comprehensive communication plan. They fail to “toot their horn” or market their successes. Purchasing fails to tell their story compellingly and neglects to sell their importance. Other departments either ignore or politely humor purchasing. Purchasing remains the chief cost driver or cost saver for many companies, yet often purchasing is remarkably under-resourced and underappreciated.
One-way to sell purchasing’s importance is to empower as many other employees as possible to participate in purchasing especially on cross-functional sourcing teams. Involving as many personnel in constructive purchasing activities educates them on the value and importance of purchasing. This is a bottom-up approach to educating employees on the value of purchasing. It encourages them to contribute their ideas about improving services and products. Purchasing needs to strongly persuade other departments to participate in purchasing processes and decisions. Purchasing all too often fails at what I call the empowerment of employees and internal public relations.
But what can purchasing do about the top executives or top-down? Many executives have stereotype views of purchasing. One of our most successful methods to convince top executives of the value of executives is to encourage direct one-on-one collaboration with executives of your suppliers; especially ones who you are partnering with who realize the relationship is long-term. Exchanging ideas at this level not only yields great results, but also expedites decisions and removes bureaucratic barriers to success.
The fact is that purchasing also runs its own Research and Development (R&D) department. Suppliers, in collaboration with purchasing, are perhaps the most cost effective R&D function in a company. Jointly they often come up with leaps in technology and transformations in products. When they cooperate they can transform a company and its products. Breakthroughs that occur via this method should receive as much publicity if not more than those developed internally!
In summary, getting purchasing valued for its great contribution to revenue requires both a bottom-up and top-down approach. Empower as many employees as possible to participate in purchasing and solicit their ideas and suggestions. Set up one-on-one executive exchanges with your supplier executives. Finally, systematically create a strong marketing plan to communicate your successes.

- See more at: http://www.mypurchasingcenter.com/purchasing/blogs/how-convince-top-executives-value-purchasing/#sthash.IYwPMocN.dpuf

Mega Negotiations Story

https://www.amazon.com/author/tomdepaoli

Here is a story about a strategy we used which I called mega-negotiations. We were very lucky that all the elements fell in place and we had hungry suppliers. The size of the negotiations gave us strong leverage.
These were the ground rules we established for a $5 billion dollar bid of supplier work for major expansion of chemical plants.

1.   There would be only one round of bids. We urged the suppliers to give the bid their best shot. We didn’t have the time to manage multiple bids.

2.   We announced that we would, in many cases, narrow down the areas where we had two preferred suppliers to one, unless we had a good business reason for keeping two.

3.   Although we had negotiated some significant total-cost-of-ownership savings in the current contracts, we were open to enhancements from the suppliers and distributors.

4.   We told the suppliers that we would not accept their standard spare parts packages as we had in the past. We would challenge their typical spares packages, but would be especially open to creative ways of them controlling and managing the spares at minimal or no cost to us.

5.   OEMs (Original Equipment Manufacturers) could work with distributors to propose any addi­tional creative services to provide us.

Believe it or not we saved over $1 billion with this approach. We were stunned.

       Dr. Tom DePaoli  www.apollosolutions.us

Use the Storytelling Method to Train Supply Chain Professionals

One of the oldest methods of passing down knowledge was by oral storytelling. Usually an ancient sage would be the keeper of the stories and pass them down to other tribe members. I highly recommend this method for supply chain professionals.

Here are some advantages of storytelling:

·       The brain stores information by stories.

·       Stories are humanizing and stimulate creativity.

·       Storytelling improves listening skills.

·       Storytelling builds a team culture.

·       It encourages collaboration.

First, creating the right atmosphere and teamwork is essential in order to establish the validity of this method. The trust of all members of the team and non-attribution is essential.  The leader of the team should leadoff and share personal supply chain stories of success and failures.  There should be a general framework for the stories. In our framework, we structured the stories to first give a background of the situation or issue, then tell how resources were gathered to address the issue (approach), and finally reveal the results. Often the approach to solving the problem is more important that the actual results. Colleagues would be encouraged to ask questions and to suggest more appropriate approaches. Supply chain professionals have many touch points or people involved throughout the supply chain. Stories should not be limited to paying customers but include suppliers, colleagues, competition, other departments etc.

Here is an example:

Background: We went through comprehensive sourcing selection process with a cross-functional team. We involved all the key stakeholders and were very meticulous in our research and selection. We were highly confident that we had selected the right water pump supplier and were expecting significant hard and soft savings. The supplier had prior experience with partnerships and alliances.

Approach: Much to my surprise after two weeks I discovered that the process was not going well. Maintenance personnel were complaining about the new supplier so I decided to investigate. I walked around the plant and talked to maintenance personnel and their department heads. I soon discovered that the issue was not the quality of the pumps. The issue was the representative that the supplier had assigned to our account. The rep just could not adjust to our people or culture. The personality was not a fit.

Results: I approached the supplier and requested that a new representative be assigned to out plant. The new representative got along well with everyone and we made great progress in savings and innovation. The lesson that I learned, is that the selection team should interview the potential supplier’s representative during the selection process and insure that they are a fit. We thus added “chemistry” to our selection process.

We used this same storytelling method after every sourcing event and continued to discover issues that we had missed. We then added them to our overall sourcing methodology or checklist. Storytelling is a powerful collaborative learning tool, I recommend taking full advantage of it.

Tom DePaoli

Dr. Tom DePaoli is the Management Program Director at Marian University in Fond du Lac, Wisconsin, and the Principal (CEO) of Apollo Solutions (www.apollosolutions.us) which does general business consulting in the supply chain, Lean Six Sigma and human resources areas. Recently he retired from the Navy Reserve after over 30 years of service. In other civilian careers, he was a supply chain and human resources executive with corporate purchasing turnaround experience and Lean Six Sigma deployments. He is the author of: Kaizen Kreativity (Oops!), Common Sense Purchasing,  Common Sense Supply Management and Growing up Italian in the 50s.  His Amazon author’s page is   https://www.amazon.com/author/tomdepaoli

Purchasing Leaders Need a Combination of Exceptional One-Off Leadership Traits

By Dr. Tom DePaoli
Running a purchasing or supply chain organization poses unique challenges to a leader. Purchasing organizations are constantly “fighting fires”, handling unique crises and influencing a broad network of people internally and externally. The range of personal contacts, cultural differences, emotions and challenges is global. In two of my books I have used poetic license and characterized the so called normal purchasing day as “zoo-ee”. Although many of the skills that I discuss are also required by other leaders, the sheer nature of the purchasing beast demands a special combination of these skills.
One of the most valued characteristics of a leader is integrity. A purchasing leader needs to never waiver in being honest to everyone in all their relationships. The quickest way to demoralize your team is to not keep your word. There can be no compromise on this trait.
One of the first things a purchasing leader must make clear is what is acceptable ethical behavior. Publish and conduct classes on purchasing ethical standards. I have been fortunate to work for companies that have clear standards and strong ethics.  I personally condone a zero tolerance of any gifts or gratuities including lunches or dinners from a supplier or anyone. I recommend purchasing actually budget dollars for these events and strive to not even give a semblance of any favoritism.
Because of the frenetic atmosphere; a purchasing leader must be a working leader or “hands on” resource especially when a crisis develops. Leading from the front is a requirement.
Clear goal setting and the flexibility to constantly adjust goals is a skill that must be repeatedly practiced and communicated. This goes hand in hand with the ability to provide come discipline and structure to the team in light of all the pressures and deadlines. Along with this, the talent to delegate and not to micromanage is essential. This encourages team members to take risks and grow. Purchasing leaders need to show that they truly care for their team by personally conducting training in many areas.
Curiosity and the drive to wander around and find out what is really happening, especially in other departments and with suppliers, often yields useful knowledge and actionable projects.  Getting visible and being approachable cements relationship building which is the linchpin of the art of purchasing.
Sheer drive and the perseverance to not quit seizes the imagination of team members and other employees as well. I call this “indomitable spirit” and it is contagious. Below is my list of one-off purchasing leadership traits along with additional complimentary traits that develop from them. Finally never lose sight of the fact that leading by example is not working, unless your team is following and exceeding your example.

One-Off Purchasing Leadership Traits	Complimentary Leadership Traits
Integrity	Admitting mistakes
Clear goal setting	Strong and visible metrics
Relationship building	Empathy
Flexibility in priorities	Adaptability
Providing discipline and structure	Strength during crisis
Delegation skills	Trusting your employees
Training ability	Expertise
Indomitable spirit	Celebrating successes

                      The five most common mistakes in implementing e-procurement:

1.     Not creating a comprehensive procurement strategy first or a plan that aligns with an e-business strategy and an e-procurement strategy.

2.     Putting the e- before procurement. Technology and e-procurement won’t fix current unsound procurement practices.

3.     Not performing comprehensive strategic supplier sourcing first and failure to prepare suppliers for e-procurement.

4.     Not properly identifying materials-services groups and the proper e-procurement tool to use for these groups.  Not assessing supplier capabilities, which include readiness for e-procurement.

5.     Underestimating resistance to change and the need for ease of use for end-users. A strong component in this area is content (catalogue) quality and the transaction details.

                             Dr. Tom DePaoli 

                             www.apollosolutions.uswww.apollosolutions.us