GA 544 | Flow Efficiency vs. Resource Efficiency with Alen Ganic

I said same thing in Lean, start with the foundation. What is foundation in Lean? They asked me that question. I said 5s. It's a good saying in Lean culture that we have in our lean environment is if you can't do 5s, forget about the rest.

Today I'm excited to welcome Alan Gannick back to the show. Now, I've known Alan for a long time and he used to be a Gemba Academy customer and was a friend for many years. And well, I'm excited to say that he, he actually has joined Gemba Academy. He's joined our team, he's one of our senior coaches and he spends most of his time coaching our folks going through our Lean Practitioner certification program. So very, very popular. One of our, well, I don't know if it's the most, I don't know if it's more popular than black belt, but it's very, very popular. And so Alan spends his days just talking and coaching to folks who are going through that program, helping them with any sort of lean got going on. And he's fantastic and but today I asked Alan to come on. He and I had been talking a little bit about flow. He wrote a blog article recently. We'll link to it and talking about the difference between what we would call flow efficiency and resource efficiency. And so really no matter what sort of work you do, whether you're in a hospital, he spends a lot of time today talking about healthcare, but also obviously manufacturing or if you work in an office, it doesn't really matter. The whole idea of flow efficiency versus resource efficiency is very applicable. And so we walk through some examples and we talk about why you should really focus on, on flow efficiency from the, from the customer's perspective. So really good stuff. I think you're going to enjoy it. And yeah, show notes can be found over@gemba podcast.com look for episode 544. Also, if you are interested in that Lean Practitioner certification or our other certifications, we've got some fast track options where you come here to Keller, Texas and, and do some of the training in person. So it goes much faster than, than just watch. Head over to gembacademy.com and we'll link everything up in the show notes and we'd love to talk to you about it. Okay, yeah, again, show notes, Episode 544 Just go to GembaPodcast.com okay, enough from me. Let's get to the show. Alan, welcome back to the show. How's it going?

It's going well. Thank you for having Me back.

Yeah. So, yeah, episode 521 was the last time that you were on. So, yeah, a few things have happened since we last talked. Like, you join Gemba Academy.

That's true. Yeah.

So anyhow. But we'll get into that here a little bit. But, you know, right out of the gate, Alan, we'd like to start with a quote. So what do you got?

My quote today is my personal quote that I usually use when I teach youth and then speak at conferences. Help others to help yourself.

Help others. Say it again.

Help others to help yourself.

So what's that mean?

For example, when you help other people, you're always going to benefit from it. I'll give you a few examples. I always like to volunteer helping others. Poor people, refugees, nonprofit organizations like Michigan Lean Consortium. Example there would be. I help them organize events when I was living in Michigan and when I was part of Michelin Consortium. And. And I learned a lot. Yeah. By helping them, I gained a lot of knowledge. So I benefit from it.

Well, even just the whole idea. And then, you know, it's been a buzzword for many, many years, but the whole idea of serving leadership. Right. When you serve others, you're actually, you know, benefiting yourself and them and, you know, the world really, in general.

So. Yes.

Yeah, yeah, Wonderful. Okay. Well, so in case people didn't hear the last episode that you were on, Alan, tell us a little bit about. About yourself, maybe. Let's start with your background, how you in all this continuous improvement stuff. And then tell us about your role here at Gemba Academy today.

Sure. My name is Alan Gannick. I started practicing lean in auto manufacturing environment about 24 years ago. This is where I learned Lean.

Were you like 15 years old?

No. Yeah, I wish. No, I wasn't. But that's where I fell off. Fell in love with Lean on the production floor where people were teaching me Lean for two years. Okay. I fell in love with Lean and I said I will to the old ways of traditional ways of managing and leading teams. And then after working out of manufacturing, different plants had a lot of success. But I moved to government. I wanted to make a change in government. And one of my biggest accomplishments while working government, besides working many different projects, improving processes in government, was establishing first Lean Conference for government employees, state, federal and local government. Where we had, I think at first conference was 40 people. So that was one of my dreams. And honestly, I'm working on a book writing how to apply Lean in government. Because still today I have many friends. They work for government, don't know how to improve something or even worse, don't know when they do make improvement, how to sustain it. So my focus right now, the book that I'm writing, is talking about how to apply lean in government. And then last time I was here, I was not Gamba Academy employee. I have to be honest with the audience. I never planned to be Gamba Academy employee. I was speaking here how I was a customer of Gamba Academy. And the reason why I was a customer because I think really highly of this company. I think we have the best content when it comes to Lean. And yeah, today I am senior Lean Six Sigma coach working for Gambin Ken. I'm so excited to be here, part of this team here where we continuously help every day. So remember my quote earlier? So I am helping now others and they're helping me through this journey. I have many Lean Practitioner customers here in my current role where I enjoy coaching others how to apply lean in their environment. Doesn't matter if they're in healthcare, if they're in government, work somewhere in the production floor executives as well. So it's so exciting to be part of a team and have a chance now to coach others and spread this Lean love.

Well, we love having you here, man. Super excited about the future. So. All right, well, let's jump in. Kind of the. I guess maybe the general theme of the discussion will be on what we're calling flow efficiency. But I thought maybe we'd take one step back. You know, we talk a lot about and lean, depending on your experience, you know, flow and poll and value and all these buzzwords, you know, that have been around for. For many, many years. But when you talk about flow, Alan, what do you mean?

What I mean is we need to concentrate from the customer perspective. Flow. So it has a flow. It's a continuous flow, so the customer does not have any delays and there are no bottlenecks in between. So that's a perfect flow. Many people in the lean world would say, oh, our goal is to get to the pull system, you know, where we pull. Yeah, Kanban system. Yeah. And that's good. It's better than the purse system. Like back in the days, we used to make X amount of certain cars and certain colors, and then we push it to the dealership. And then poor dealers had to deal with it and try to convince people to buy those cars. Right. Where nowadays we have a pull system in many cases where people have a choice and they can pull from the latte car they want, the flow system would be I get exactly what I want, when I want it. And so that's the difference a little bit between pool and continuous flow.

Yeah. I like to say when people will get a little bit excited about their kanban system, which again, is great. It's better than just pushing material around when nobody wants it, but said when you can't flow pole.

Yes.

Right. And I remember being in was NGK spark plugs in Japan. I went there many years ago. I think it made like, crazy, like a million spark plugs a day or something insane like that. I remember walking around and looking and just, you know, just constant movement of spark plugs moving about this facility. And I remember asking the. The manager who was giving us the tour, you know, through a translator, I said, hey, can you ask him, you know, where their. Where their kanban are? You know, I didn't see any. And a translator speaking Japanese, the guy says, where's your kanban? And all of a sudden, the manager kind of squinted his eyes a little bit and his eyebrows, can I. And he kind of grumbled back to the translator. And then the translator look at me says, no kanban, only flow. I was like, okay. I felt like a dumb American, you know, so, Eddie. All right, well, so if we think about flow and what about. You know, there's a term that we often use about something about flow efficiency versus resource efficiency. What are. What are those two things, first of all? And then why should you focus on one over the other?

That's a good question. So resource efficiency is focusing mainly on utilizing that resource that we invested money into it. Right. So I'll give you an example, because since I have many customers today going through a lean partition program in healthcare environment, I'll use an example in one of the hospitals that I am familiar with in the state of Michigan where they switched from resource efficiency to the flow efficiency. Resource efficiency. Back in the day, what they had, they had a specific piece of equipment that they use in the hospital environment. They had specific rooms. For example, patient comes into an ER and they have an issue where they need to have an X ray. They would roll that bed and the patient to the X ray room. And everybody in the hospital goes to the same room. So there's some wait time. Everybody needs to get X rays and all that. So that's really focusing on utilizing that X ray machine as a resource. Right. So the cost a lot of money. You want to utilize it and have a good return investment. Where in the flow efficiency. Where? This same hospital. And by the way, all my three kids were Born in this hospital, so I'm very familiar with this hospital. So I was pleasantly surprised just before moving to Texas, where they have switched from resource efficiency, which I well known in the back in the day, to flow efficiency. So in my personal case, one of my family members, I took to ER and the patient never left the room. And what happened? I'm used to it. I said, okay, do I just wait in this room? When I took the patient into the room, do I just wait here? And while she's getting the X ray? And they said, no, you need to step outside, the X ray is coming in. Because they have created this flow efficiency and focusing from the customer perspective. So imagine now when they worked on this project, I'm a little bit familiar with their project that they had lean project, they had a camera put on their nurses, and they saw how much movement the patient, how many times that patient was moved from a room to room just to utilize those resources. So they switched. The idea says, how can we make it better for the flow for the customer so the customer can come in, get their services that they need as soon as possible, and go back home. In my personal case, I was two hours in the ER room, where back in the days, I would spend two hours, at least in the waiting room. And because they created this flow efficiency, everything is done around the patient. It's not anymore going to a room in and out. That's one example. The other example would be in healthcare environment. I'm gonna stick with healthcare environment. A patient has an issue, let's say breast cancer. A lady finds out that she has something and she thinks it's a breast cancer. She goes to a doctor. Doc says, well, I need to send you to specialist. And then two weeks later, you need to go see your results. Then they said, you need to go do the tests. It can take about two to eight weeks till the lady finds out the diagnosis if she has or not breast cancer. And that is resource efficiency. We have these buildings, built these buildings in different locations. You have to schedule appointment with everyone. From the lean perspective, if we look at the. From the flow efficiency, how are the flows for the customer? In this case, this lady patient. Imagine this lady patient goes to one facility, one big building, and she says, doctor, I think I have something that I need to be checked out. I'm afraid it's a breast cancer, but I want to confirm with you. And then immediately it goes to the next room, does the test. That person needs to go in the same building. These tests go to the person that's specialized in that area, relates the message to the primary doctor. And then within two to four hours, maybe that patient knows if this is a cancer, breast cancer, or not. Imagine how much better it is for the patient. Yeah.

No, the anxiety is still there, but is done in a day. Right. Versus having to wait two months. Right.

To know.

Yes.

And that's why this hospital that I was mentioning, and they had a big advertising billboard on the side of the highway. And I was so stunned when I saw that. And it says on the billboard, welcome to our 24. 7 emergency room. Something that nature. Please don't quote me, but it said something about, we're going to see. You will see a doctor in our emergency room in less than 20 minutes or you don't owe us anything. Wow. Which means we guarantee you that you will see a doctor in 20 minutes. Or if you. If it takes longer, we'll take care of you. But you don't have to pay us anything. We don't need your insurance card. We don't need your credit card. Imagine that promise.

Yeah.

And that's the only way. The reason why, because they were focusing on the flow, efficiency, how quickly they can flow. And then, to be honest with you, in that hospital, when I walked in, it was like the middle of the night, like 2 o' clock in the morning. I'm used to seeing crying babies, sick people sitting there. And then you check in at the desk and then you go and sit down. The rest of the people that are sick there. There was nobody there.

Wow.

So this lady quickly just asked us who we are. Didn't look at anything, like documentation. What is the purpose for your visit? And the nurse was standing by one of the available nurse. And then she wheeled in us and then started the process. Everything was done in the room. Wow.

Back in episode 67, this is many, many years ago, had a guy on, as they call the lean dentist named Sammy Barry. Episode 67, we'll get Jessica to link it up. He is very similar to what you're talking about. I mean, I'm sure it's even better now, but this was many years ago. His idea was, same thing, you go in for your cleaning, get your teeth cleaned and doing the cleaning, they look and say, oh, sorry, Alan, you've got a cavity. You know, and, well, what historically happens is what? You make an appointment, you come back two weeks or later, and you sit there forever again. And you know, well, he says, hey, Alan, you get a cavity, you want to fix it? Yeah, I want to fix it. Go boom. And he does it right there, you know, so I just immediately transition to that. Now, you know, obviously a lot of moving pieces there as far as scheduling and all the rest of it, but, you know, he's figured it out. So that's, I think, another example of sort of flow efficiency, like just bringing value to the customer immediately. Right. Streamlining all processes. So it's quick and quick changeover. Everything's involved. Right. So. Yeah, very good, very good. What about. So, like, this is a tough question. Like, what about, let's say in a manufacturing environment, you maybe you're, I don't know, you got some process to where you. You manufacture some material in some way and then you got it painted. But you got one big paint booth, you know, that the whole big monument, as we would call, you know, that the whole factory has got to work with. I mean, like in that case, you know, you're sort of, you know, beholden to the paint booth. Right. So is there ways to sort of work around that as well? Like what, what do you think in.

That, in that situation, switching from one paint to another and have a still continuously flow? Is that what you're referring to?

Yeah. Well, and it could just be that, hey, the paint booth can only maybe. Let's just say that the paint booth, I don't know, I can't remember back in. You could work in cell phone days. I remember there were some suppliers of ours that, that literally painted the covers, you know, of the phone. And, and I do remember that they would tool up and do all the black ones and then they would do all the red ones.

Batching.

Batching, Right. And so like, that would be resource efficiency. Definitely. And there's some batching there. Right. So maybe in that example, what have the ability to. To have shorter lot sizes or something like that. So you could do more, more quick changeover type activity or what do you think? Like, how would you approach that?

Definitely. So in today's environment, many organizations, as you mentioned, including auto industry. Let's stick with auto industry. They have a flow in continuous flow and they don't do much of the batching like we used to. Back in the day. Our ideas was if we mass produce and batch bigger sizes, you know, we utilize resource efficiency. In this case, as you mentioned, would be a paint booth. Logically it makes sense, right? You long for a longer period of time, one color, then you have less color changes, cleaning the booth and all that. But then what happens if there's an issue with that paint, if there's a vision change or something? In that nature. And now you have to scrap everything, right? Yeah. So where flow efficiency to get to that level where you can switch quickly from paint to paint, you know, and have a smaller batch sizes only. What the customer needs is we need to get better at improving our changeovers.

Yeah.

So this is many people that know lean. A smed comes into a place, doesn't matter if it's a paint booth, changing molds out, whatever that is, we need to be faster at that and we need to improve that. Talking about formula one, many people know formula one as a sport and how they have evolved over the years. And now the quickest changeover is 1.8 seconds, I believe done by Ferrari. Now if somebody does in six seconds, it's very slow. Back in the day, it used to take hours. So I think to get to that level where we have continuous flow of what really customer wants the color that they want and we want to paint that, we need to get better and focus more on smed.

Well, now I know I don't know how cell phones are. I've been out of the industry for a while now. But, you know, maybe don't even paint. Like do it in injection molding, you know, and add the color and the resin and all that. And so you don't even need to paint anymore.

Right, right.

And yeah. So. Okay, good. So I'm wondering then talk a little bit more about this. What distinguishes flow efficiency from resource efficiency? Are there some key things that really sort of differentiate them?

Yes. So flow efficiency concerns the pace and smoothness of the overall process flow, while resource efficiency is more about the optimal use of inputs to achieve outputs.

What does that mean?

So what that means is if you invest money, let's say, in a production floor, let's switch now from healthcare to production floor. And I wrote a blog on Gab Academy recently about this, where in one manufacturing environment, they heard about robots and how robots are good and they'd be more efficient. You can run 24, 7 and reduce the labor cost, improve efficiency. And so this employer was this. This company was so excited about that, and they invested millions of dollars. They paid more than a million dollars in this robot. So it's a resource. So they pushed all the efforts in utilizing this resource to get a quick return on investment. Now, for their resource, they said, we invested money, we want to put it into use. The problem was is this robot was not at the point where it can create product that's needed for the customer. And before, prior to buying this resource, jumping to a conclusion, the Process in the past was good. It didn't solve any problem. So if you look at the back in the history and says what problem did we try to solve really is it was a shiny object people wanted to stick, you know, move on with the new technology and all that. But there was not really a problem. There was no problem. There was on time. Delivery was almost to the perfect. There was almost never any rejections for this particular item. But the company focus on this resource, purchasing the resources without having really a problem in that area. I'm not opposed to purchasing equipment, getting up to date and things like that. We have to technology is out there. But we always have to think about what problem are we trying to solve and how we're going to solve it. Purchasing this robot in this particular case was really going to solve the problem we have. If we look at that from the beginning. In this particular case there was no problem we had on time. Maybe we could have invested money somewhere else. So that's kind of didn't it actually.

If I remember that example, I can't remember the article. But didn't it make it worse?

Actually made it worse. Yes, exactly. So what happened? They start producing more. Okay. And then the product got to the customer. And then these tanks, they were oil tanks. They start leaking. And so this is a pressurized oil tank and they start leaking. Customers say what's going on with new industry. They didn't know that the robot was purchased. Now somebody else is. So the robot was not programmed properly. Robot would go down a lot. There was not staff was not well trained how to utilize this robot and how to fix it. So there was actually more downtime, more scrap. And then they had to hire. It got to the bad, really bad with the customer experience where they had to hire a third party to come and sort every product that they it comes off the robot. And then to make the long story short, our listeners can go and read the article. But they had to push the robot aside and go back to the old ways not to lose the customer. Because customer told them if you don't fix this, we want a good product. We don't care how you create it. Yeah. We just want the product that we used to receive on time. 100 quality. Yeah. And that's understandable. So they had to push that aside. So that's why we sometimes need to focus more on the customer perspective. Like we were saying earlier today about flow efficiency. How can we get quicker to customer. Sometimes the technology is not the fastest way. And I'll give you another Example in government environment, I work on a government project where they were saying, there's a new kiosk. The kiosk will replace the information desk, the call centers and all that. Because the customers will be able, even if they don't have a computer, they'll be able to come to our different departments and fill out the things that they need at this kiosk. So instead of piloting this kiosk, they purchased a bunch of these kiosks because salesperson sold it to them and put it in various departments and they start advertising to the citizens of that residents of that town, hey, we have this kiosk. And then when we did study, the usage of kiosk was very, very low. Return on investment. I don't know if they have it till today, if it's going to be next 30 years. Because it was not focusing on a customer perspective. What does custom really need? How can we eliminate waste in the process that we currently have without even investing money? Somebody had idea, let's buy this. A computer, nicely designed machine with a nice stand. And then we were watching. I was sitting in the lobby of the city hall many times and there's a kiosk and there was like a information call. It's called 311 center, where the humans take care of the issues. So I was watching one, one lady, while I was waiting for another meeting, I was just sitting in the lobby and she struggled with the kiosk. Not good with computer. A bunch of questions. Ended up going back in the line and then getting taken care of by the people who take in theirs. And then that particular case, for example, they were very into lean. The lady who created this 311, Becky Jo, she was really into lean. I worked with many projects with her and she designed it. She removed a lot of waste in her process that she had for her employees. So her employees had more capacity. Her employees, if they didn't have any customers, they had other works to do, so they were not bored or anything like that. So that process, for example, worked much better than proxy that I was mentioning. The other one, that was a kiosk, she had people in their booths or whatever you want to call it, you know, offices, taking care of customers, you know, face to face, immediately taking care of them and helping them. And they were very well trained. And then when they didn't have anything to do, they were helping on other things. They would close one of those shades and then you see only one window if there's more customers. Because she was training her staff to be Customer focused. Let's improve the flow of the customer. We don't want to have a lot. You see two, three people waiting. Open up another window.

Yeah.

There's another two, three. Open a third window and then if there's more, open all the windows to take care of the customers. So people didn't mind coming to the office or to the city hall to take care of the business, pay the bills, this and that. Yeah. Because they knew they're going to get faster. Yeah. They're going to get better service.

Yeah, yeah, yeah.

Doing online, for example.

Good stuff, man. Good stuff. All right. So everybody flow when you can.

Yes.

Pull if you have to.

Right.

So I'm wondering, just to wrap things up, I would be doing everybody disservice if I didn't ask you some really tactical sort of Lean questions. I'm wondering if maybe there's someone listening right now who is. Maybe they're just getting started. Maybe they're a Gamba Academy customer, I don't know. And they just join Gamba Academy or they're. Even if they're not Gamba Academy customer, they're, they're, they're newer on their Lean journey, their continuous improvement journey, Lean Six Sigma, whatever it might be. What, like, do you have any, like, practical advice from them? Because you talk to a hundreds of people, you know, over the course of a month and you're coaching them all. Like what, what general advice would you have?

General question that I get asked when people just hear about Lean and the new Delean Ellen, there's so much. I went to your site. There are so many tools.

Yeah.

This new methodology sounds all great, but where do I start? That's the general question that I ask people that are very new to Lean and I tell them, start from beginning. When you build a house, ask them, what do you build first? Do you build a good quality roof and the walls or do you build a foundation? They said, no, it doesn't matter how good the walls are and the roof. If the foundation is poorly done, it's going to crash. Right. So I said, same thing in Lean, start with the foundation. What is foundation in Lean? They asked me that question. I said, 5s. It's a good thing in Lean, in culture that we have or in our Lean environment is if you can't do 5s, forget about the rest. If you can't have a 5s, workplace organization, organize yourself, value stream might not be helpful to you to learn a 3 problem solving not helping to you. Maybe a 3 problem solving tool that you're trying to use is because you don't have a good workplace organization, you don't follow 5S methodology. So that's where I usually advise them to start from. Beginning. In the beginning would be let's learn 5s and let's learn how to see the waste in the process. Very important. Anytime I train anyone, doesn't matter what company is, basically I don't train them anything unless they understand 5s and it can give me example. And they understand 8 deadly wastes. I know it used to be 7, now it's 8 or 9 or 9 or 9. Whatever. We can keep adding. Maybe next year when we have a podcast, it might be 10. Yeah, yeah. But now let's say seven or eight deadly waste, seven very known waste and then eight deadly wastes. Not utilizing employee skill or talents is they need to understand. Yeah. And when you, when you learn from beginning how to see a waste, the rest are going to be a lot easier. When it comes to the problem solving methodologies and tools, when it comes to value stream mapping and other things, you will understand it better, you will see it better, and you're not going to put any waste into that process, whatever that is.

Yeah.

So that's kind of what I advise whoever I speak to. They're new tooling. Let's start from beginning. Yeah, let's do some examples. And people, somebody get excited and call me. I have friends. They're not our customer, but they're my friends and they asked me about, hey, what do you do for a living? This. And then I start telling, talking to them about seeing ways and this and all that. Now, now they go to restaurants, for example, and they tell me, oh, Ellen, you would love this. I've seen waste in transportation, motion, these people, the way they move and all that. So they get excited and that's the. I think the key is to have a good solid understanding of lean. And where do you start? Start from beginning. From the beginning. Yeah.

Love it, love it. Awesome. All right, my friend, I know you got coaching calls. Probably go jump on here.

So I want you to do this.

Keep you in the booth here all day. If folks wanted to connect with you personally. Alan, what's the best way?

So now it's very easy because you can go through Gambi Academy website and you can send me an email, for example, reach out that way. But LinkedIn is always the best. I love networking, talking to people. LinkedIn is another way to reach out.

Yeah. And so it's Allen A L E N1L.

Yes.

And in Gannica is G A N I C. Yes. No K. Okay. No K. All right. All right. Well we're going to have everything linked up in the show notes everyone. So just kind of scroll down on your app and go connect with Alan if you're not already. So awesome man. Hey, thanks for coming on. This has been a lot of fun.

Thank you Ron. Thank you for having me.

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