GA 542 | The Digitization of Work with Ron Crabtree

A lot of companies fail digital transformation because they're like looking for that silver bullet, right? But yeah, let's throw some technology with this. But then nothing ever seems to improve.

Today I'm excited to welcome Ron Crabtree to the show. So today Ron and I, we talk about a topic. We've touched on it a few times, I guess over the years on the show, but not a lot. And that's the whole idea of a digital transformation or maybe the digitization of work and how that sort of plays in harmony with what we're trying to do with a lean thinking organization. So towards the beginning of the, of the episode, we sort of talk about like, what is it? And then we get more into the how do you go about it? And then what are some of the traps? What are some of, what are some of the reasons companies and organizations fail at this and what you can do to sort of counter those potential risks. So lots of good stuff. Ron's got a lot of experience. You'll hear about his background and yeah, I think you're going to have a, a lot of value to be found in this episode. I know I enjoyed it. Now show notes can be found over@gembapodcast.com look for episode 542. Again gembapodcast.com look for Episode 542. Finally, the last thing that I wanted to say was, I've mentioned it before, but we are doing live events now here at Gemba Academy. We have a training center here in Keller, Texas, just like maybe it's like 30 minutes from the DFW airport. But we're also able to go to your location to deliver live training. So if live training is something that you're interested in, we've got some green belt and black belt, what we're calling fast track, where you get the whole green belt curriculum in five days. And we also got a lean boot camp, we've got a two day Toyota Kata workshop. So we got lots of different stuff. So if any of that's interesting to you, go to gemba events.com again, gemba events.com and check out what we got going on there. And again, what we, we only list a few things on that page. But if there is a topic that you're interested in exploring, go ahead and reach out to us and we can, we can talk to you about that. Okay, enough for me. Let's get to the show. Ron, welcome to the show. How are you?

I'm doing great, thank you.

Yeah, I'm not going to forget your name now. Where are you calling in from?

Kalamazoo, Michigan area. We're out, actually. Out in the country.

That's a beautiful part of the. Of the country, especially this time of year. While we're recording this year in August. So this is prime time in Michigan.

Yeah. The vineyards are looking beautiful over here.

Oh, I bet. I bet. That's awesome. That's awesome. All right, well, hey, I'm excited to have you on the show today, Ron. And as you know, we like to get things going right out of the gate with our guest sharing a quote. So or two. What do you got?

Well, a couple of my favorites. One's Peter Drucker. Right. Something about strategy that gets eaten for breakfast by what culture? So culture change management is a huge issue. Always has been. And then my other favorite is probably Deming. If you can't describe what you're doing as a process, you don't know what you're doing.

Yeah, exactly. Two classics. Yep, for sure. For sure. Awesome. All right, well, hey, Ron, tell us a little bit about. About yourself. Tell us about your background, how you got into, you know, line of work that you're into and. And what is it that you're doing these days.

Yeah. Cool. So, you know, I kind of was hammered out on the automotive supply chain side of things. You know, I'm here in Michigan, except for four years in Southern California working for a little company called Disney's manufacturing business. Mostly I've lived in Michigan the first 20 years. You know, I was in plant operations, materials management, worked my way up through, got moved to Detroit back in 96 with United Technologies Automotive, worked in corporate purchasing and we were doing Target and Kaizen costing and big supplier rationalization projects. And before that happened, you know, during the 80s, the GM port and Chrysler had all those unfunded mandates that were pushing in the supply chain. They'd line us up and I forget to step backward. Right. So I always had to be responsible for being compliant with all of these requirements. You know, you had the GM Pico's reviews, You had zero inventories. You weren't allowed to say the Japanese word kaizen was a nasty word. You couldn't say that. It was, we're Americans. So, you know, I was going to Takeuchi design of experiments training at Michigan State back in the late 80s, before Rother and Shook's books came out. Lean thinking didn't was on the drawing boards at that point. So we were learning all the fundamentals, what we call Lean Six Sigma today. And fast forward, you know, moved to Metro Detroit, got Recruited out to have full P and L responsibility for division of publicly traded, not a private equity owned company and moved into consulting with Grant Thornton back in 1998 in their continuous improvement practice and they found out implemented ERP systems many times. So I became their Oracle practice leader and subject matter expert in Oracle demand flow and that was based on the John Costanza Institute of Technology thinking if you haven't ever bumped into that and that's linked up I think with MSOE as well. And then from there I ended up with the world's largest lean manufacturing consulting company. At the time they had more ex Toyota consultants and engineers than anybody but Toyota and got pulled into the accelerated lean deployment projects at Ford Motor company So I had the pleasure and the blessing spending a lot of time with ex Toyota folks doing value stream mapping right down to the micro motions inside assembly plants at Ford and boiling out of that. What were the opportunities within the four walls and direct inbound outbound supply chain to wring out costs and improve overall performance. Great learning experience. And then I started my company 22 years ago initially as a management consulting company company and lean Six Sigma supply chain became very active in you know, thought leadership around this traveling the country talking about lean supply chain and Lean. I helped develop the lean Six Sigma online programs with Villanova under that brand they since pulled out in house at the school Lean supply chain for University of San Francisco and then I've been the blessing to work with skillsoft a lot the last eight nine years now is their voice of Six Sigma and and their periodic updates to that body of knowledge. So kept building this network of fol I could put to work and 10 years ago we created the Meta Experts brand to characterize an on demand talent solution to provide super smart people to step in and solve difficult problems. And along with that packaged offering of interim talent we open up the intellectual property library to our customers so they can be successful.

Got it, got it. Yeah, you mentioned Taguchi and man brings back so many good memories. I actually was fortunate enough many years ago to. I can't remember where it was but I'm positive it was in Michigan somewhere. It was Junichi Ducci's son. What's his name? I can't remember his name but he, he was continuing his father's, you know, legacy and whatnot and, and a bunch of us went into their classes and learned all about their you know, Gucci lost function and and boy I did a lot of L18 doe's back in the day. Man, that was my Favorite My favorite LA 18. That's the. That's the best one, man.

You know, so.

But yeah, about Taguchi for a little while. That's. That's fantastic. All right, well, hey, Ron. I'm excited to sort of explore Todd. We've touched on it over the years on the podcast a little bit, but not a lot. And that's the whole idea of maybe like a digital transformation and how it applies to. To us, those of us that are in sort of the lean and just really continuous improvement, operational excellence world. So I'm curious if you could just maybe. Let's just start when we say digital transformation or digitization, which is hard to say. Like, what is it, first of all?

Well, I'm going to answer it in the context of, you know, what lean practitioners probably should begin to think about. They're not already well down the road. But it's not AI, right? So the big thing in the buzz right now is artificial intelligence. If you aren't doing that, then you're getting left in the dust. And as a practical matter, digital transformation, digitization of work is crucial to organizations. And the reason I feel that way is there's three critical things that all organizations are struggling with, like crazy common challenge. I don't just really matter what you do. If you're involved with tangible goods, basically you've got the forever labor shortage going on. The Bureau of Labor and Statistics put out some pretty interesting stuff last year, though North America and most of the Western world, new people entering the workforce is going down every year, and it's going to get worse. You know, the second challenge is we have to do more with less. That's what lean thinkers are all about. But it's less of everything, right? It's facility, it's space, it's people, it's materials, it's logistics, it's moving stuff. And then the third one that everybody shares is digitization. And when you get on that bandwagon, right, are you going to be a leader, a follower? Are you going to get left in the dust? But when you talk about digital transformation, it's really important to recognize it's not, you know, a silver bullet cure. It's not a big bang of, you know, I can just do this and suddenly I'm transformed. It doesn't work that way. There's more than 30 different elements I had actually helped put together with a team of people. I pulled together a digital transformation awareness program for one of our customers. And we kind of did a really careful deep dive and came up with more than 30 different elements that go into digital transformation that lean thinkers should be on their radar is where are those opportunities? And I'll talk more about later about how that can work. But things like digital mapping, we're familiar with value stream mapping, I'll talk more about that later as a practical how to to go at it. But you know, using digital mapping tools to really understand end to end business processes, for example, research and development and the use of process mining to get up front and really improve those processes. Because as lean thinkers know, 80 to 90% of the cost gets fixed when in the design cycle. So there's real opportunities there to extend, you know, lean thinking, upstream artificial intelligence, that's all the news you think about ChatGPT and using that. Those are simple tools out there that we should be thinking about expanding into. There's things like edge sensor technologies, feeding information, critically needed information to understand consumption, demand and replenishment. Think about electronic pole systems. You know, it's getting more and more down that way. You have autonomous supply chain technologies out there with respect to how do we actually communicate and do better. Asynchronous planning and coordination against actual demands and then pulling through the supply chain how we're going to execute. Of course, robotics, everybody immediately thinks about, you know, a robot on the floor waving around, making stuff. And that's just a tiny slice of it. What did demi say? 80 to 90% of the problems in the shop floor are management costs, right? It's upstream. And so that's where, you know, you really got to look at. I've worked with a number of companies. Just a quick story, I was working with, you know, printing company, they were making decals, right, for car windows and stuff like that, getting into parking lots and what have you. They had this really cool incentive program of what a profit sharing program. But then they would deduct directly from the profit sharing program all cost for rework and mistakes and scrap, right? So when you print something and it isn't right, you can't rework it. You got to throw it away and start over. And we started to really look hard at what are we doing here. So basically, as we got down into the root cause analysis, we determined that the entire front process of the quoting, defining what that decal to be, you know, how it's going to be laid out that 85% of all the defects that we were calling manufacturing scrap and rework were caused on the shop floor. And that led to a big aha around whoa, you know what, we gotta get way upstream of that and Figure out how to leverage technologies and have better standard work and other things in place so that we could get it right the first time with the information. In fact, I'm going to argue that as much as 80% of opportunity from a lean perspective can be just perfecting the information that we're feeding into the organization to trigger actions. So I could go on and on here, Right. You got intelligent process automation, you have unified collaboration tools, people analytics. It goes on and on. So the point here is we'll get more into the practicality of actually doing some of this stuff. Is that there's no silver bullet and it is death by a thousand cuts.

Yeah. Yeah. Curious to get. I mean, obviously you've been around a long time and I'm sure you've drawn a lot of value stream apps over your career. What are your thoughts on maybe is there any. Are you a believer that someone should like sort of jump straight to Vizio or whatever, whatever tool they're using to draw their map? Or are you a proponent of old school, throw it up on some butcher paper initially, make it as ugly as possible and then digitize it? Or how do you. What's your thoughts on that?

It's both and circumstantial. Right. So as you well know, value stream maps done on a napkin over at lunch. That drives results to the business. Extremely valuable and they should and need to be used. The butcher paper can and should be used, particularly when you can have people physically in the room with you.

Yeah.

And you have the ability to have that war room. You can bring the team in and walk it out. There's nothing more powerful in my mind. And the physical connection of the stakeholders seeing it and understanding it and listening to one another to understand what's going on in the value stream. That's great. If you can be in one place when you can't, that's when looking at the digitization of that's crucial. And so yes, there's freeware out there. I use draw IO and use a basic wireframe, you know, swim lane type of map. And then, you know, Excel spreadsheets can be very effective to capture a lot of data. You know, if you'd like, I can explain what I would look for.

Sure.

Capture for a minute. Okay, well, I'm going to jump ahead here because a lot of companies fail digital transformation because they're like looking for that silver bullet. Right?

Yeah.

Or yeah, let's throw, you know, some technology at this. But then nothing ever seems to improve.

Automate waste, you know, kind of thing.

Yeah, exactly. So I've learned that, you know, when you, when you value map a process, particularly when you begin to move off the shop floor, you begin to move upstream, downstream in the supply chain. The other functions, this just. I'll tell a quick story to illustrate this. So I was working with an organization. They, they make those steel storage buildings.

Okay.

Right. So if you're going to go store your stuff in one of those steel, you know, buildings, that's what they do. They would design, install, design, make and install these buildings. Well, the problem was it was taking them 6 to 12 weeks to get through the design cycle to get to a production ready release for documents. And even then there was tons and tons of errors and omissions and the information causing all kinds of headaches downstream for supply chain manufacturing. So we pulled together a team and really sat down and said, let's map out everything that happens from the time the customer is saying, yep, I'm going to need a design all the way through the. They had like seven different chunks to that value stream which ends up in, you know, production ready, purchasing ready documents that they could then go execute on was just that front end part. Right. Getting ready to release in the system. So we used a custom lane technique. I'm happy to share a picture of what that looks like. But then as you move down through, you have the obvious stuff. What's the step, who's doing it, how long does it take? And then there's lots of effort. You begin to look at delay times, right. How much inbox time is there? Right. How long is it going to sit and wait? And then how often does it actually happen? Right. Is it 100% of the time the process runs or is there only part of it and is that conditional? And why is that and why is it not? And then the first time capability rate, what's the first time quality of that step? How many times out of 100 can I just do it once and be done? And what percentage time I can't. Right. And then what's the rework loop, where we're going and why are we doing that and making that visible, capturing all that in a spreadsheet and then, you know, what are the artifacts, you know, screenshots, information that would manifest what was going on with those steps. But then the part that's, that's really tricky here and hard to do is you said, great, we want to also map in all of the IT and information handling touches. So for you had sales and marketing and all things they would do and then you had the engineering group and there were two different sets of applications. On the engineering side you had the product data management, product lifecycle management tools, all the things around, you know, the design and developing a bill of materials and blah, blah, blah, blah blah. The front end, you had the CRM, you had all the permitting because there's multiple organizations that have to be involved with permitting and control before we can put up a building. And all had to be considered. Began to map that out saying, okay, at the step level, which IT systems might they touch, which IT systems always get used for what and what other systems conditionally get used when there is a problem, right? If everything goes right, I have three different IT systems attached. When there's a problem, there's seven. So there was primary and secondary touches into the various IT systems. And then think about, you know, the X matrix you're building out to the right of all that. So they ended up with, golly, I think there are 35 different systems in play just to get to the production ready drives. That's before IT got into erp, before purchasing, before any of that downstream stuff. This was just on the, the front end. And that was extremely helpful because then we could begin to go through and do a Pareto analysis 80, 20 rule, right? I'm saying, great, you know, we take a look at the step level and begin to roll that up. Which 20% of the steps give us all the headaches with respect to the information and then with respect to the pain points. Remember we do, you know, we're doing a value stream mapping. You know, you're learning to see we have our cars in bursts and where are all those major pain points? We captured those pain points as we went and we went back and we mapped in saying, okay, let's move upstream, pain point is here in the value stream, but let's go upstream and find out the actual origination point of when the defective information would have escaped into the value stream so that we knew where to fix it so that it doesn't ever happen again, right? So the Magic Is what 20% of the steps give you 80% of your headaches? What 20% of the steps were 80% of these double entry in the IT systems the information wasn't there, so I had to go hunt it down, blah blah, blah, blah blah. And that gave us immense visibility. So of the 30 things they could work on, they were able to boil it down to three specific automation initiatives around the integration of the CRM with the product data management or they're pulling through usable Objects into the CRM on the front end, along with some of the field requirements and actually empower the salespeople very early in the process to get that really good. So that then when the customer says, yep, I'm ready to go, let's move into production ready drawings, you had it. Right. You weren't trying to run it down. And then at that point in time, slowing down the process. Right. Going upstream, slowing everything down. So I think the key thing here is remember that digital transformation is not the big bang. It's not like putting in the ERP system. You'll solve a lot of problems. That's not how it works.

Or create.

Very precision. Yeah, very precision. Right. You know, if you can't implement and do it and get it done in 90 days, you shouldn't be doing it. Why? Things change too quickly. Right. The conditions that dictated we should do that may not be true in 90 days. Technologies is forever changing and churning and it's a big challenge. So a long winded answer to a simple question.

Yeah, no, that's good stuff. Well, I'm curious if folks are listening right now and perhaps they've done some, some digital transformation, but maybe I want to do more or perhaps someone's really just starting. Is there sort of like recommendations, order of operations or maybe priorities to like this first in that, like what do you think about that for folks who are kind of getting started with it?

Well, there's, there's probably three major components that have to be carefully thought about, you know, versus recognizing there are no silver bullet cures. Right. So somebody runs in, look at this shiny object, you know, make all these problems go away. So be very suspicious, okay. And one of the biggest reasons why organizations fail, because I'm going to argue that 80% of digital transformation efforts underperform or flat out fail. Right. They just don't get the results we remotely expected. And quite often, and I've had a lot of lean practitioners agree pretty vehemently that people not buying into it, the fear how this is going to impact my job just blows the organization up. And that fear happens at all levels, from senior managers all the way down to the people on the floor that have to do the work. So the fear of the unknown and the low adoption rate and a buy in to what needs to be done is a massive problem. That's why I'm a big fan of value stream mapping as a method to pull those stakeholders in and force them to have a quality conversation and break down all these jargon gaps. You know, the IT Kitties, cloud computing, you know, all the things they want to talk about and get down to the hard what is the business need and drilling down to for a fact. We could measure a delta on the quality improvement, first time capability, a delta in terms of the effort required to get it done. A delta on the amount of time on a repeatable basis that the decision could be made or the documents generated or whatever and being able to really have true root cause and then be able to work on the true root cause. That's why I mentioned before we got a lot of pain down here at step 37, but 80% of the sources at step 7. Yeah, yeah. So we got to get way upstream and it's non adversarial, no finger pointing. It's, this is what the business needs. And a lot of times those stakeholders way up front thought they were doing a good thing for the organization because they're trying to hurry up and get it through when in fact they were causing a lot of harm because they didn't know. They didn't know. Yeah. So it's picking your battles. Right. So I would argue very hardly hard and strongly that if you can't quantify it and show a direct business benefit from, you know, taking on that, that digitization element, whatever it might be, whether it's you know, leveraging chat, bt, TPT or using robotic, automated robotic learning tools to make some human decision, support things and not have, have, have people do it. Right. Allow the systems to support you and do 80 of the work and only involve humans for the 20 they really need to be involved with and you know, etc. Etc. So, so it's picking your battles. Got to be short cycle, you know, if it takes more than 90 to 120 days, all the, everything that we're making those assumptions around today is going to change. Yeah. So if you can't turn the crank on it pretty quickly, you got to question what you're doing it at all. Right. Unless it's integral to operating your ERP system or there's some other compelling business, it's a compliance mandate. Right. We have to have that documentation for ISO or FDA or whatever it may be. But other than that, challenge it very, very, very strongly. And if you don't can't get the cross functional buy in for the individuals directly impacted to buy into that, it's going to be really hard. There's going to be a million reasons it won't work.

Yeah.

And nobody's going to stand up and say I'm afraid.

Yep, yep. Well yeah, it's just change management, right? Really, it's, it's the same today, I guess, as it was 50 years ago. It's just very difficult though. Very difficult. Good stuff. Awesome. Well, hey Ron, this has been a lot of fun. I wonder if you have any maybe final words of wisdom or so maybe some parting advice for folks on this topic or really any topic.

Yeah, well, I could go on for hours about this stuff. Kind of parting thoughts. Here is when you're getting digital transformation and the higher the enterprise risk associated with failure, one of the cool things I like about Toyota and the culture of Toyota is if you could be 60% right, do it and even if you fail, it's okay. And if you find a defect, it's oh, we found a treasure. So we can learn organizationally how we can prevent that from happening because it's management cause more often than not. So you got to double down on the change management. But as the enterprise risk increases, in other words, the stakes, either the opportunity or the cost to do it, does that increases? Got to double down on change management and double down on engaging the people that will be most impacted to make sure they truly understand the assumptions we're making going in and then how we're going to quote, unquote, monetize in the form of freeing up people to do more value add work. Right? Limiting the need for a vendor, for example, bringing it in a house or else or business process outsourcing because we realize we're just not good at it, we never will be. So maybe we need to stop doing it. That's part of what those analysis give you. And then as you move into engaging with the actual technology providers, this is great advice I got from one of my buddies at Uber Freight company on a podcast. Don't get married to a couple three providers. Hedge your bets. Because what Eric told me, what Derek said that was really spot on, is technology is moving very, very fast. So if this organization's got something that's kind of leading edge, that doesn't mean six months it is anymore. So his advice, and I agree with him, is hedge your bets, right? Don't put all your eggs in a single technology basket incrementally. You know, plug and play. And a lot of these things are built to plug and play to solve very specific business problems to get to the specific result you're looking for. So hedge your bets. Don't get, you know, put your hook your wagon to one quote, unquote, save your world single provider, because it doesn't exist. There's too many pieces to the end to end supply chain execution that need to be broken out. Everything from supplier management to design to, you know, network design while down the road there are lots and lots of pieces. So that would be my wrap up on that. Nice for this discussion.

Oh that's great. That's great. And if folks wanted to connect with you personally, Ron, what's the what's the.

Best way you always connect with me through LinkedIn and you know it's our crabtreedops.com know for 20 some 20 over 20 years.

Okay.

Not 20 years. 15 years now.

Okay.

And then visit metaexperts.com and right there you can click and find out how to find talent and a couple buttons. One of my friends get in touch with you if I'm not available. Awesome.

Very good. All right. Well hey, this has been a lot of fun, Ron. I appreciate you carving out some time.

Awesome. Thank you, Ron.

All right, take care. Thanks for listening. Whether you been on the continuous improvement journey for many years or perhaps you're just getting started, Gemba Academy is here to support you. And while we're best known for our more than 1500 Lean and Six Sigma teaching and virtual tour videos, we also have a team of experienced Lean and Six Sigma practitioners available for one on one coaching as well as a variety of Lean and Six Sigma certification options. To learn more and to schedule a demo, head on over to gembaacademy.com.