5 Ways the Obeya (Big Room) Increases Profit

Walls. If you live in the modern world or work within a secondary or tertiary industry, look up and you will see a wall ahead, behind or to the side of you. We walk along, past and through them every day but think nothing of them most of the time. But walls may be the silent killer of productivity. Luckily they don’t move very fast and are just slightly more intelligent than doorknobs, but walls, as the expression goes, have us completely surrounded.
Early in my career as a lean consultant the client gave my project team “free rein” to direct a business transformation, with three disclaimers: don’t fire any customers, don’t discontinue any products, and don’t move any walls. The more years I spend in consulting the more I want to break these rules. Too often “lean” does not start by rationalizing customers or products. Lean operations is still the main thrust of most lean transformations, although enlightened leaders increasingly see the need to expand lean to all areas of an enterprise.
Of the three, the third requirement of “don’t move any walls” would seem to be the easiest one within which to find compromise. Make a good case for moving walls and like any other investment or improvement idea, it should happen, right? How much emotional investment can a leader have in a wall? How many stakeholders need to be managed to take down a wall? How many questions need to be asked (Is it load bearing? What are the building codes? Who wants to go see what’s on the other side?) Yet for some reason moving walls, especially where walls are most prevalent (the office) can be a tough sell.
Reasons for this include the fear of a new way of working, ruining a perfectly pleasant office environment to which everyone has grown accustomed, and the concern that problems will be exposed to an organization unprepared to tackle them. But this is standard change management stuff that should be addressed during a lean transformation anyway. But there is another and more basic reason that the wall and the 20 lb sledgehammer seldom meet during lean transformations: the lack of a clear business case.
When physical walls are the barrier between current condition and target condition within a lean manufacturing transformation the case is fairly clear. The walls lose. On the other hand when we are talking about removing walls within offices, whether for the transactional and support functions of a manufacturing business or a service industry operation, the case is often less clear. We need to find at least a few ways that the open office or “obeya” concept increases profit in a direct way.
1. Reduced space. At a minimum organizations who remove walls recover one meter of space on either side from the center of the wall. Multiply this times the linear meters of the wall to determine the savings. Realistically the removal of walls consolidates a lot of small bits of dead space within offices, makes storage or meeting rooms redundant, and generally turns up free space. While space may be a so-called soft savings for many lean manufacturing implementations, many times office space is leased, can be sub-leased more easily than manufacturing space, or can be sold to reduce fixed and variable costs and increase profit.
2. Fewer meetings. When walls come down, the need for meetings is reduced. More time can be spent in small but timely bursts of communication. More progress is made on issues within an obeya than within the traditional meeting room due to the information displayed there and the fact that it is a working area for a cross-functional team; they want the meeting over and you out of their space so they can get back to work. Multiply the man-minutes of meetings reduced times the cost and this is another concrete way that removing walls increases profit.
3. Reduced gold plating. We over-design product, processes and even our physical work space, adding costs that customers will not pay for. This happens either because customer requirements are poorly defined, poorly communicated across functional barriers, or because decision are made behind walls. The obeya puts the best information on the wall for all to see. It puts the people from different functions in the room for regular face to face communication, problem solving and discussions about the need for gold plating. This improves profit.
4. Clearing the e-mail jungle. Finding a way to recover lost productivity due to the cost of managing via e-mail will make some clever innovator very wealthy. Until then we can all look up and call to our colleague in our obeya or even walk a few paces to have a clarifying conversation. If this requires immediate documentation and communication to others, perhaps Reply to All is justified. Otherwise we can save it for the daily team reviews in the obeya, save everyone some time, and save some money in the process.
5. Making resource bottlenecks visible. There is nothing like an open room to show who is busy, who is not and to enable cooperation in getting the day’s work done. When people cooperate and move to relieve bottlenecks, this reduces cost by avoiding extra hiring, overtime, penalties due to project delays and so forth.
The obeya is far more than simply a big open room. It must be deliberately designed as a communication center for the status of daily work as well as the progress of projects involving cross-functional teams, customers and suppliers. This is especially important today as more teams work virtually and across language and culture barriers. Enabling people to ask questions about the way of working, such as “Can we really do this profitably?” “Why do we allow customers to make these disruptive changes?” “Do we have a standard for this?” “Which task is top priority?” and “Does anyone need any help with anything?”
Key lean concepts to build into your obeya design include making problems visible, leader standard work to check the visuals and project status, total engagement in problem solving, asking why 5 times, letting the customer (internal and external) pull, a focus on keeping the work flowing, and going to see for yourself as much as possible.
When designing and improving a lean work flow there is a magic number: one. We aim for one piece flow, lot sizes of one or some form of “one request at a time” processing, as opposed to batch-and-queue processing and multi-tasking. Likewise there is a magic number in the design of lean work spaces as it relates to walls: four. That is the ideal number of walls to have within an organization’s effective working space. Nap rooms, kitchens, libraries, fitness centers, these are all productivity enhancers that merit their own four walls within a workplace.

2 Comments

  1. Joseph

    August 31, 2010 - 11:25 am

    Jon.
    I think walls exist in peoples minds. It is part of what people call Empire Building. Which is a Management strategy for protecting their own jobs ( Maslow’s Hierarchy of Needs, Level 2, Safety Needs, Protection ).
    In most production plants if you have 5 offices then you have 5 Managers plus there supervisory structures. If this is reduced to 3 offices by removing some walls then a brilliant boss may see that you now only need 3 Managers plus their supervisory structures. Wow! that made my brain hurt “How Crever am I”.
    Another reason for departmental walls is to restrict the flow of information because knowledge is power.
    If you have 5 people working either side of a wall ( 10 in total ) and they all have work loads of 88% then removing the wall and spreading the work would save one person. A good saving year on year.
    That is enough of the negative, Management would not think like that. How could I think such a thing. Only the hourly paid would have that kind of thoughts. lol. (lol = laughing out loud)
    It’s strange that you raise the issues with walls in a era when walls mean so little. The electronic age has all but done away with them. E-mails, net meetings, file sharing, etc. have made them all but redundent.
    We teach people to think outside the box. This is a form of removing walls.
    Paradigms are also a form of wall. A set way of thinking. You may have heard this one but I will tell you any way. A man went out for a drive in the country in his new sports car. As he raced around a blind bend he met a car that had strayed onto his side of the road. The driver of the other car swerved back onto her own side of the road preventing a crash. As they passed one another the other driver leant out of her car and shouted at him PIG. The sports car driver thought I’m not letting her get away with that. So he leaned out of his window and shouted back at her COW. He then went around the bend and ran into the PIG. ( His Paradigm COST HIM )
    Have a nice day.

  2. Yalın Üretim

    May 10, 2012 - 5:55 am

    I like it. Obeya is very usefull for NPD and other processes