What happens when your company doesn’t understand “lean”?
Since the introduction of lean manufacturing and related concepts like kaizen in the 1950’s, companies everywhere have tried to match the achievements of Toyota. No matter what department – from manufacturing to human resources – scores of managers have tried to emulate the best practices that Deming and others managed to put into practice in those post-war years of aggressive rebuilding and industrial expansion.
But problems arise when, despite thousands of books, courses, consultations, events, websites, and videos being created about lean, companies still fail to fully grasp its meaning. There is a profound difference between eliminating wasteful practices and working more effectively and efficiently. These concepts can certainly overlap, but they don’t have to (see our blog on leadership and Six Sigma here .
Cultural issues, weak leadership, or even losing sight of the customer can be seen as causes of inadequate lean practices. But 50 years later, most companies cannot honestly say they have attained a level of consistent lean management on par with Toyota that continues to this day (see our blog on their A3 technique (How to Master Problem Solving on a Single Sheet of Paper).
A recent report published by Boston Consulting Group identified seven factors for successful deployment of lean practices. These factors rely on first mapping out an organization’s core processes to understand how they operate. This in turn should start with the customer and work backwards, always looking for inefficient workflows and holdups. It should seek a pragmatic rewriting of the production process, all with the customer top-of-mind.
Significantly, these seven factors incorporate realistic and consistent amounts of project management and change management to balance the people side of the lean equation.
1. They choose specific, customer-centered projects. I find it easy to dismiss such ideas as lip service to a vague excellence philosophy, but what is useful is when companies identify specific areas of demonstrable improvement. An example, highlighted by the authors of the study, reads as follows: “Improved production efficiency or other incentive targets should not promote overproduction that leads to inventory pileups.” Such ideas might seem like common sense, but they often get drowned out by a type of management-group think that redirects the energy of improvement into the soft bedding of the status quo.
2. They think big but start small. It is useful and cathartic to envision the great changes that an improved process can deliver, but it is advisable to launch the changes on a manageable scale, such as a pilot project or within one department or sector. This allows teams to observe the changes in a contained fashion, and being small in scale, start and end dates along with problem solving opportunities become easier to handle.
3. They involve everyone. Central to the idea of implementing cultural change is the necessity for everyone to get involved. Management in particular must be willing to embrace the risks and be present on the shop floor, to observe successes and failures, to listen and to lead.
4. They tailor their approach to their culture. Some corporate cultures are aggressive and fearless, while others are well-entrenched in tradition. At the root of each is a desire held by each employee to defend his or her livelihood by embracing or rejecting new management philosophies, including lean and Six Sigma. This means that the introduction of and nurturing of best practices must always be tailored to the audience, down to a granular, per person level, including promoting “cross-functional and cross-organizational understanding.”
5. They assign dedicated, experienced resources. No new initiative like lean will get anywhere if it is given short shrift in the deployment phase. A culture-shifting undertaking requires the use of dedicated and experienced people with sufficient amounts of authority and management ability to ensure a successful roll out. When a worthwhile change is underfunded or understaffed it means it is also underappreciated in terms of its ROI. The ultimate goal of successful deployment is for companies to “migrate to line ownership of lean efforts,” meaning the techniques and secrets do not remain solely the possession of a select few in management, but instead become embraced by the entire workforce.
6. They use metrics. Change can only happen when it can be measured. An improvement practice will not be a success, in fact it might even make things worse, if benchmarks and metrics are not established and reviewed.
CASE STUDY: Achievement Does Not Equal Improvement“A European industrial goods company used the 5’S tool to create a cleaner, safer, more orderly production facility following the principles of sort, simplify, shine, standardize, and sustain. The improved work space should have led to productivity improvements, but whether it did or not may never be known for sure. The company failed to link its 5’S activities to the specific bottom-line targets. Absent the expectation of higher production rates, the operators may simply be taking longer coffee breaks now that their tasks take less time to complete.”
7. They Communicate Communication cannot be unidirectional. It is vital for a feedback loop to exist between management and workforce. This includes face-to-face opportunities as well as collaborative internal technologies. Communication must not all be directive or procedural. It must also be effusive in celebrating successes – including small wins – along the project timeline.
The Boston Consulting report reiterates classic pieces of wisdom – nothing particularly new – but the fact that it bears repeating reveals that the pursuit of management ideals like lean truly is an uphill trudge that requires constant vigilance in order to avoid falling back into old habits. Perhaps that’s why the Deming cycle of continuous improvement (pictured below) is so apt.
Management and employees together must continue to pursue an ideal lean process but must ensure that any achievements made become entrenched as the new normal. These must be seen as wedges that prevent new habits from falling back into old ways.
Until then, Toyota will remain the cause célèbre, even 50 years on.