Latest / Exit Algorithms / Lean Six Sigma Secrets to Eliminate Waste & Scale Smarter | Ben Harmsen (#44)
Transcript
- speaker-0: Welcome to Exit Algorithms, the podcast where we decode what it really takes to unlock growth, streamline operations, and prepare your business for a high value exit. I'm your host, Pete Vera, and today I'm excited to bring on Ben Harmsen. He's a certified Lean Six Sigma master black belt, has deep industry knowledge and experience in supply chain management and a number of other industries, and founder of Hammer Solutions Group. So Ben, so excited to have you. Welcome to the show. speaker-1: Thank you for having me. I'm glad to be here. speaker-0: Yeah, absolutely. Can we start? ⁓ useful probably to share a bit about your background. ⁓ saw lot of, ⁓ Fortune 500, 100 corporate roles as well. And, you know, what led you to found Hammer Legacy? speaker-1: Yeah, so, you know, just kind of at a high level, you know, got my start very early on with just standards and leadership and things of that nature in the United States Army many, many years ago. From there had a 12 year stint with the Chrysler Corporation. You know, and that's where I was really first exposed to Lean Six Sigma process standardization. You know, we went through ISO 9000 and all, you know, implementations and all of that. you know, at the time didn't really realize what I was learning. From there, you know, went on, I worked in the Coca-Cola network for six years in various roles. Kind of that's where I got my opportunity to really kind of apply what I had learned and did everything from lead operations to doing project management and major implementations, software solutions and so on. I had a brief stint with some 3PLs. What our customer was Walmart, Coremark. was there for a little bit, did some manufacturing, made bacon for a little bit for Daley's premium meats, which was great. I did some e-commerce work ⁓ ⁓ I was saying, now we're working with the construction company. So all of that experience really just ⁓ down to, it didn't matter what the industry was, it really didn't matter even if what part of the company or the division we were working in, there's just waste everywhere. And for as much as love the process, fixing the problems. You know, there was a selfish side where, you know, I wanted to do a little bit more for me. You know, I've loved saving millions, I like to put a little bit more of that maybe in my pocket than always the big company. So, but that's really led to it. And it was really just, it felt like the right time. And the experience was there to support where we wanted to speaker-0: Yeah, definitely. That's awesome. love the unique perspective you bring to the table, having consulted with so many different industries get to apply some of the same principles, but in a lot of ⁓ businesses. Imagine comes in handy. Yeah. speaker-1: Yes it does, yeah. And they are simple, you know, the beauty of lean is that the tools or the methodology is designed to be simple and I really think when used and applied, you know, that's what makes it transferable regardless of the industry. speaker-0: For sure. Yeah. And you said, you know, you reduce waste businesses. What does that kind of, what does that look like? What's maybe the first thing you look at when you walk into an operation? speaker-1: Well, know, typically what I see is I always say there's 10 % all day, you know, regardless of the industry. That's not to say that there aren't companies that are running exceptionally well. But what I have found most have waste. mean, first of all, there's waste in every process, regardless of how good the process is or the system is. There's going to be a level of waste in it. But think most don't see it because they mistake profitability doing the right things, right? With not with, well, look at how well we're doing, look at how profitable we are, but that doesn't deny or that doesn't erase the fact that there could be waste. I always say there's 10 % in every business. Typically, believe it or not, what I find is 20 to 30. And it's simply just due to a gap, if you will, in what I call process controls and accountability or PCAs. You know, so when I walk in, ⁓ the first thing I'll ask is, know, whatever we're talking about, usually the pain point is coming from, ⁓ know, something on the PNL, somewhere we're struggling, you know, out on the floor or, you know, in some other department, whatever the case may be spending more than we expected ⁓ losing. And, know, first thing I will ask is, you do we have a process for that? I always get a yes. And then the second question I asked is, can you show it to me? I almost always get kind of like this look on their face like, well, what do you mean? You know, I've been doing this for 10 years. I've been doing this for 20 years, which is wonderful, but that's really not a process. And then from there, you know, we can go down the rabbit hole if you will, how are we inspecting then what we expect? How are we auditing the process to make sure the standards are being met? Ultimately, how are we measuring it? Which is key to anything from if you're going to improve it, you must measure it. And ⁓ then how does that tie, tick and tie to the bottom line so that we can truly see that what we're doing is working having a positive effect ⁓ the bottom line. So yeah, I said, I think it applies to every, everything I have seen and I would argue most that are out there. speaker-0: Yeah, I know that's awesome. and you find it's kind of, it's the same metrics or the same problems industry to industry, ⁓ what are some of the metrics or KPIs you look at and track? speaker-1: Well, you know, there's always a level of productivity to everything, you know, it's whatever those variables are, what are the outputs? So whether you're in a warehouse or, know, and you're picking packages or each is or cases, whatever the case may be, but to even processing paperwork. I mean, we measure now we're at our PO and how quickly we are moving POs through the systems, approving our invoicing because we were doing a lot of batching and batching always creates a bottleneck. So little things like that. And then even processing HR paperwork. So those are some things. Again, what are the defects? Defects is a great, rather it's errors, defects, mispicks, you want to classify that as. Because I always kind of have a cliche saying, don't be in a hurry to get it done, be in hurry to get it right. And I'd rather spend the extra couple of seconds on the front end getting that right, because somebody has to clean it up and fix it. And then we get stuck in that dreaded rework, redo. you put a re in front of anything, it's pretty much waste at that point. So the KPIs can vary, but there's always a productivity. There's always an accuracy to them. And it be as simple as a pass or a fail. Did we do what we were supposed to do in the timeframe? So ⁓ they're not to be over complicated. And sometimes I can see that they are, but those can be very effective and be implemented pretty quickly. speaker-0: Gotcha. Yeah. Thanks for sharing. You know, a lot of our listeners, you they might not be familiar with Lean Six Sigma. Do you mind sharing kind of at a high level so toddler could understand what it and, you know, where does it apply? It's not just large manufacturers, right? speaker-1: No, absolutely. At a very high level, it is about reducing waste and variation. So lean is about reducing the waste that we see. And that could be even in our day to day. I kind of drive my kids crazy with my waste reduction in their own personal lives, because I do take it into account for mine, because it brings value. So we've reduced the waste. There are eight of them. They are existing in all processes. I won't bore you with. all eight of them, but the acronym is downtime. So if you wanted to go Google that or the audience wanted to go look it up, you can get a better, little more deeper definition of what those are. But that's what the lean is about, reducing the waste out of a system or a process to make it flow. Oftentimes, lean is mistaken with less and people get scared of it. ⁓ that means you're going to fire us. So we're going to know it is about flow. It is about having the right resources in the right places so that the process is seamless for the most part versus bottlenecking or having too many or not enough in most cases in the right places. And then Six Sigma is that reduction in variation. So, ⁓ you know, how often are we hitting the quality mark? How often are we delivering on time and in full, right? that we are consistent in what we do versus these big ebbs and flows where we have a great day and then a bad day and then a bad day and then a great day, and we're just not consistent. So the Six Sigma side really brings in a data analytics and a project management approach, if you will, the DMAIC process into reducing variation and getting a more consistent result. speaker-0: Got it. said. Yeah, you kind of touched on it a little bit earlier, but what are some common mistakes you see businesses make that you typically go in and fix? ⁓ You said there's least 10 % of room. For our listeners that are business owners, what can maybe to look out for? speaker-1: a couple of things is one, have to be a champion for it. ⁓ know, lean does not fail. I have found due to a lack of tools you know, the methodology itself is not the opportunity. It's the fact that it's not championed ⁓ and really has to be championed by the top down. ⁓ You what I always tell the leaders that I come across is if it's not important to you, it will certainly not be important to those that you lead. And lean is a culture. is a foundation of continuous improvement. It is not a program. So, you know, I think there's a misunderstanding with, you know, what it takes to drive because culture is, you know, it's everything, you know, you know, there's that saying out there, culture devour strategy, 100 % true. So it must be champion. And that's, see most opportunities where it comes up short based. It's simply that it's not being owned and championed as it should. The other thing is We don't inspect what we expect, right? So we go through the process, we define, we analyze, we improve, we put controls in, we measure, excuse me, we put the metrics to it, but then we don't control it. We don't inspect what we expect, and most importantly, we don't hold accountable. And that doesn't mean we, you know, write up and fire everybody either. I'm not trying to advocate for that that's the only solution, but you gotta know where to coach. And there is an opportunity to either coach up or coach out because not, you know, the roles in which we have, they're not for everybody and most jobs are not easy. They do come with standards and expectations. And if we're not holding people accountable to them, then never really get it off the ground. So I, for those are the two biggest opportunities. So ⁓ to make that we're champion, what it is that we're doing, taking ownership and then inspecting what we expect and ultimately holding people accountable. speaker-0: Yeah, for sure. a lot of talk about that kind of that same topic of change management and but I imagine ⁓ it be even more intense Lean Six Sigma just depending on the business and the culture, right? speaker-1: Absolutely. Yeah. And, you know, in the culture, like I said, it's I've, I've, ⁓ that's, it's always the biggest thing. You know, when I walk into places that are struggling, it is culture driven, typically leadership driven. and it's not the pick on folks. It's just the data ⁓ the gaps that I've seen over the years. ⁓ ⁓ often it's because we don't understand it. It's not a lack of willing or avoidance, you will, even though people do fear change. But it is more ⁓ not understanding really what it takes or how to apply it. And then to your point, change management, that's what Lean Six Sigma is. I mean, it really is ⁓ just form of change management. It's a systematic, disciplined way to go about enabling change and managing it. speaker-0: Yeah, yeah, for sure. Do you, there, does it depend on the business how to ⁓ it better or like, make sure ⁓ stays in the business? Like, you know, there, what do you recommend for business owners that are trying to adopt Lean Six Sigma? speaker-1: Well, you know, let don't boil the ocean, right? You know, let's pick the top one or two things that are going to have the biggest impact and go after them. I think maybe that's even in a division or a department. You don't have to do ⁓ I'll use a warehouse, for example. You know, you've got receiving, you have picking, you have put away ⁓ stocking, right? You have the dock operations loading and unloading. You don't have to solve all the issues in all. ⁓ in all of those departments. You can just focus on one. What I like to do is focus on one area. We'll define what the look of success is, if you will. the standards and measurements in place. And then ultimately we'll measure and ⁓ improve, coach and grow. ⁓ then that becomes the example of all other things. Because once you can establish what the example of success looks like, ⁓ you can duplicate it. So if it's something small, I would encourage that you do something small, get a win, get a standard or an example in place, and then it's easy to go train somebody to that. And you can implement and you don't have to might have to tweak it depending on, you because the receiving doc isn't quite the same as the loading doc or, you know, the HR department isn't quite the same as the project management department. But there's similarities enough. So you just tweak, tweak the variables, if you will, based on the nuance. But again, having an example to turn back or reflect on and use for reference to me, I believe that that, you know, it streamlines that change management process because you've always got something to go look back to. speaker-0: Yeah, I love that. Really good insights there. Do you, you know, one of the big themes of this show is ⁓ AI and I'm curious from your perspective, you know, are you able to increase your output AI or ⁓ are you using speaker-1: ⁓ absolutely. love, and I know there's several out there and I dabble in some. mean, chat, GBT, I've been doing that for a couple of years and really got that dialed in. ⁓ amazing what that tool can do when So it's great from just ⁓ an perspective, pumping out reports in a much more timely manner, scheduling, planning, got a gentleman I hired a few months ago to bring into the construction place who's a senior data analyst. ⁓ You know, we're using power automation as well ⁓ combining those tools so that we can ⁓ our folks putting, you know, ⁓ names to read it to where we need these resources for our projects. what else are we doing? We're doing, let me look at my notes. ⁓ this is just decision making, right? Cause we train it and we're, we're, putting, you know, contract information in and these contracts sometimes can be, you know, overly complex. ⁓ So we can train the AI to understand the contract and then we plug in scenarios where there was questions or debate on how that should be read in or interpreted. And then we go back and we reference that. So when new things come up, we can plug it in and it will kick out like scenarios or likely or even things that we could push back on based on maybe some generality or vagueness ⁓ how things read. So ⁓ been a tremendous tool. ⁓ the way that I view it, AI is not going to replace operators, right? Somebody has to do work, perform the task, whatever it is, for the most part, and I'm not talking about robots, but operators that use AI will replace operators that don't. I mean, is, I think it's easy to say that it's not going anywhere anytime soon, right? So yeah, and it's every day, be something new tomorrow, right? ⁓ speaker-0: Yeah, yeah, constantly changing and so rapid. Yeah. love what you said too. know, Chad GPT, you can get it to ⁓ eventually like almost a different thing than when you start just by training it, it to know you and how you talk and think and stuff. speaker-1: And we're looking at it too, you know, I use it in manufacturing, you know, camera systems where you can teach it to identify a defect and then, you know, reject it from the line. We're looking at it, you know, we're very just entry level, but looking at it from a construction space where we have spotters that are looking at trenches, you know, looking for potential line hits ⁓ other safety opportunities or risks that are out there, especially when you're working in the right away or out in public. So there's certainly other things, camera systems and what's going on out there, it's amazing. that's touching every industry now as well. So ⁓ think ⁓ an AI perspective, the cameras and, ⁓ what the robots are really, right? It's just a camera that can move for the most part and it's training and teaching itself based on what it's seeing and doing every day. So the camera systems are, they're already big, ⁓ I see them being a big part of everything across. pretty much all industries as well. speaker-0: Yeah, for sure. their direct application and also the telematics that you can get from them as well. Yeah. What are your thoughts on, on robotics ⁓ the current state in the logistics industry specifically? ⁓ was in a podcast recently, they're saying now you can buy basic robots that do basic warehouse functions for about $7,000. speaker-1: Right. mean, I think it's the future. I mean, it's definitely going to get tested. I understand it. You you're probably reducing the human, you know, the error rate down to basically a six sigma level, right, which is 3.4 defects out of a million. And maybe it would even be better. So, I mean, I understand it. I support it. And it's really, you know, if I, I'm a current warehouse associate on the front line, you know, ⁓ I'm looking at how do I, ⁓ better educate myself to work on those, because somebody's going to have to maintain them. Somebody's going to have to work on them, right? Somebody's going to have to do certain things throughout whatever the process is, whether it's a warehouse or not. So those aren't going anywhere. to your point, you're becoming more and more affordable. So I think now that you're going to see it with the big, the much companies, ⁓ Fortune 500 companies, you're going to see smaller companies doing less than ⁓ half. ⁓ 500 million and less will be able to afford or even 100 million or less can afford, you know to bring in a few of those resources if nothing more to test them. speaker-0: Yeah, yeah, definitely. Yeah, it's gonna start with the bigger companies and then trickle down. But you can easily see a ROI if you know, it's only a ⁓ ish thousand dollar investment. It's kind of here now. speaker-1: It is and you know what I think I saw one the other day on a video like it changed its own battery. So it's not like it even needs to shut down to go and recharge for four hours before it goes back to work. It literally walked away for you know 30 minutes whatever the process was changed its own battery and went right back to work. mean that's that's hard to compete with right. speaker-0: Yeah, yeah, definitely. to your point, you know, if you can ride the wave, you know, rather than get swallowed by it, and just use technology, use the new the AI and whatever's at your ⁓ disposal. the to, ⁓ you know, and thrive and grow your business, right? speaker-1: Absolutely, absolutely. speaker-0: Yeah, well, I know we're coming up close on time here. But I always ask my guests at the end of the show, what one practical tip for business owners that want to start eliminating waste and improving ⁓ their line? speaker-1: I would say, you know, go for what we call a waste walk, right? You know, go walk out on the floor, go walk in the office, whatever it is. And, you know, a couple of questions. There's a few things. One is you can ask people, what are they waiting for? Right? What if, you know, what's in their way from staying productive, if you will? What are they reworking? Anytime we're having to do things more than once. So RE, anything, rework, redo, remake, retouch, re whatever. That's a big opportunity. And then what's overcomplicated? is the bottleneck? What's... what takes too much time to do when you have all the time in the world to do it, right? So I think just asking simple questions like that could at least start pointing you in the right direction. And then again, going back to what I was saying about asking folks about, ⁓ you have a process for this? Can you show that to me? Can you then show me how inspecting what you're expect and auditing that process? How is that tied to a KPI? How is that tied to the bottom line? ⁓ I most companies We'll find that those answers aren't, ⁓ don't have them. And that's great because that tells you, you you've got opportunity to grow and where to go focus your attention. And ⁓ the thing, you know, shine the light on it, measure what matters. I know there's a book out there. It is a great book, great examples out there. I'm not advocating, I didn't write it. ⁓ anyways, when you shine the light on the opportunity, it will improve, you know, and you give it the right attention. I always say continuous improvement is, you know, it's a journey. You just need the right guide. you know, understanding how to get out there and do it, I'd start with those simple questions. speaker-0: Amazing. Yeah. Well said, Ben. ⁓ Thank you so much for your time. Where could listeners find you best? speaker-1: Well, really just on my website, you know, so hammerlegaciesolutionsgroup.com. You can certainly reach out there. My phone number is on there as well. I do have my LinkedIn page, you know, for both my personal and for the Hammer Legacy as well. So, you know, call me, you know, you don't have to just do the contact page and give me a call and it's just something I can do. I'm always excited and open to it. So. speaker-0: I'll leave that in the show notes. speaker-1: All right?