Knowledge Management
V
TPS, LEAN, Six Sigma
Common, Conflict or Complementary?
Jon Hayward-Wright
KMLF
30 April 2014
1
TPS v LEAN

TPS – Toyota Production System, a collection of tools, methods,
brought together into a single framework / system.
 TPS did NOT invent many of these items, the “magic” was
bring them together and integrating them into one system.
With 5 key objectives: Specify what creates value from the customers perspective
 Identify all the steps along the process chain
 Make those processes flow
 Make only what is pulled by the customer
 Strive for perfection by continually removing wastes

LEAN – a term that was “invented” by Womack, Jones & Roos
in their book “The Machine That Changed the World” that
explained in general terms the TPS philosophy's .
2
LEAN v Six Sigma
LEAN --- (TPS)





Removes Waste
Reduces Cycle Time
(increased speed)
Promotes Process redesign to remove nonvalue adding steps.
Fixes connections
between process steps.
Focuses on the customer.
Six Sigma --- (SPC)





Reduces variations
(lifts repeatability)
Improves Quality
Reduces “compounding”
errors.
Seeks to optimise process
steps.
Focuses on the customer.
SPEED + ACCURACY
=
(BETTER Delivery & Quality)+(SATISFIED Employees & Customers)
3
How long have they been around?
4
Activity
Part 1
 Write on separate POST-ITS any similarities OR
differences you believe exist between : LEAN/Six Sigma AND Knowledge Management
(KM)
Part 2
 Read the following question and write your answer
on ONE POST-IT.
 “What action/change is impossible today, which if
by some magical means you could achieve, would
totally change the world of KM forever!”
5
“The basic economic resource is no longer capital,
nor natural resources, nor labor.
It is and will be knowledge.”
Peter Drucker
“What Drucker failed to say was…..it has to be the
RIGHT knowledge!
6
So what does the “?” really represent?
Non Value Adding
Value Adding ?
Value Creating ?
7
Exponential Growth in “Knowledge”?




By the year 2020 “knowledge” will double every 73 days or
less……………..
 but what is the RIGHT knowledge?
World Wide Web is doubling every 90 days…………….
 With who…….customers?......partners? Or noise?
Moore s Law - The power of silicon technology doubles every
18 months.
 Faster……..more “speed” but what about the quality?
Metcalfe s Law - The value to those connected to a network
increases by n square.
 Does it?...........only if the information is “processed”
into “knowledge” which supports / promotes a
“change” in something?
8
What is Knowledge Management?
The systematic process of creating,
maintaining and nurturing an
organization to make the best use of the
available knowledge to create business
value and generate competitive
advantage.
9
The belief is Knowledge Workers
will :



Dominant group of workers in the 21st century.
 Will we need that many?......what do the rest do?
Specialists with job-specific skills.
 Require multiple, continuous learning opportunities
to maintain their specialized knowledge?......from
where?
Have significant formal education or formal training.
 From where? Who will pay…? In what?
Are self-directed learners & workers
 Focused on what?........more “knowledge” or noise?
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What does it take to get these
working?
KM


20% Technology
80% Cultural
 Behaviour of leaders
 What type of
“learnings” are valued
 Organisational
structure
 How are mistakes
handled
 Reward & Punishment
 What “value” on info.
sharing
LEAN / Six Sigma


20% “Technology”
80% Cultural
 Support from “leaders”
 Accepting “process
improvement” as the
right focus.
 Organisational barriers
to change.
 Mistakes as a learning.
 Commitment of the
many to support the
few.
11
KM and Lean are Symbiotic
KM helping LEAN




Drawing out the
knowledge of
“productivity”.
KM focus on the “flow” of
knowledge.
Enables continuous
learning.
Enables transfer of
process/systems
knowledge, common
understanding.
LEAN helping KM




An enterprise committed to
LEAN enables/seeks
Data -> Info. -> Knowledge
processes.
Helps identify and champion
“knowledge” gaps.
LEAN events provide
opportunities for knowledge
transfer.
Focus is on “valuable”
information & how this
creates customer centric
value.
12
Barriers to Success
Barrier
KM
LEAN
Organisational Culture
1st
80% 4th
60%
Lack of Ownership
2nd
64% 2nd
70%
Info/Comms Tech.
(Hard & Soft)
3rd
55% 7th
20%
Organisational Structure
4th
54% 5th
50%
Non-standard processes
5th
53% 6th
30%
Lack of leadership support
6th
46% 1st
80%
Reward & Recognition
7th
46% 7th
20%
Middle or FLM support
8th
45% 2nd
70%
13
Preserving “Invisible Equity”
Typical Balance Sheet when “Invisible Equity” included
Assets
Finance
1.99
Current
Assets
1.98
3.58
Current
Liabilities
Non Current
Liabilities
10.93
NonCurrent
Assets
8.95
5.38
3.12
Visible
Shareholder
Equity
LEAN
KM
Invisible
Equity
Market Value $14.05 Billion
•
•
The “Invisible Balance Sheet”
Management Value-Add
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So what's the future for……


LEAN (TPS)
 Used outside of manufacturing.
 YES but caution is needed,
 Dis-assembly of the basic’s will alter the “value”.
 “Sustainable LEAN” now stands for: L = Leadership
 E = Engagement
 A = Accountability
 N = Nurturing.
KM
 Time has yet to come, needs to define and sell its
“value” from the customers viewpoint?
15
What do you think?
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