Basics of a Successful Lean Transformation

Lean Manufacturing, otherwise known as World Class Manufacturing or Just in Time, was originally codified at Toyota.  The main thrust of Lean Manufacturing is to identify and eliminate waste at all levels of the production process.   Waste can be defined as any activity that does not add value to the finished product or service, such as excess inventory, unnecessary movements or operations, scrap, rework, or transportation.  Reducing wasteful activities frees up resources to concentrate on those activities that add value to the product or service.

In traditional manufacturing, the overall organization must grow, both value added and non-value added operations, in order to grow production and profits.  In Lean, the reduction of non-value added activities transfers efforts to other value added operations, thus growing both production and profits.  Lean Operations are not complicated.  On the contrary, they are simple.  Deceptively so.  But getting there can be tough.  

In addition to waste reduction, Lean is about value creation.  Waste reduction efforts yield higher quality products, faster responsiveness and delivery times, higher consistency and reliability, and lower cost.  For you, this translates into increased revenues and profits.  For your customers, this translates into higher value.

Some basic structure and guiding principles will help:

  • Planning Change
  • Managing Change
  • Developing leaders:  Leader Standard Work
  • Understanding the 4 Drivers of Lean
  • Blocking and Tackling:  Daily Execution with Visual Management
  • Daily Problem Solving
  • Continuous Improvement.

Planning Change

General Eisenhower, the architect of D-Day, said "Plans are useless:   planning is everything".  More recently, heavyweight Mike Tyson aptly stated: "Everyone has a plan until you get hit in the face".  How true - both of them!  So as we plan, we learn.  The planning exercise teaches us about our operations, what enables them, and what hinders them.  The act of drawing a Value Stream Map VSM (see sample at right) lays bare the current state and prompts valuable discussions of possible future states.  Included in the mapping process is the development of appropriate metrics, including market rate (takt time), current process times, and the development of standards through time studies.  The VSM and time studies become the center of debate and teaching, both learning to see current operations more clearly and evaluating future opportunities.

Once current and future states are understood, a path linking the two become apparent, with key kaizen (process improvement) opportunities and milestones.  This path is the basis for the improvement plan.

Managing Change

Successful, sustainable change involves the whole team - everyone has a part to play, and much of the heavy lifting is up front.  In order to build change, we need to know change is necessary, and on its way.  This is Awareness.  Beyond awareness, we need to feel the change holds something good for the organization and for us as individuals.  This is Desire, the Why.  We must be educated in options for change and how it will affect us, what to look for and what to avoid.  We must also understand one another and our individual challenges to ensure the entire organization gains from the change.  This Knowledge is our tool set for change.  Beyond Knowledge, new skills must be learned and employed to enable the change and improve our operations.  With early successes comes Abilitiy.   Knowledge + Ability = How.  Finally, new cultures and behaviors must be adopted, along with metrics to ensure the change is both effective and sustained.  Without Reinforcement, there is no sustained change.  New habits generally take 20 repetitions to stick.  New culture takes far more.

Bear in mind Michael Dell's words:  “It's easy to decide what you're going to do. The hard thing is deciding what you're not going to do.”   The book 4 Disciplines of Execution (see sidebar) make a good case for the need to focus to get results.  They maintain that an excessive number of goals (more than 3) lead to dilution of effort and lower achievement levels.  The key to success is to carefully select a very few goals identify and focus on what activities drive that goal (rather than focus on the goal itself).  Seek Lead Measures for that goal and strive to improve on those metrics.  Lead Measures foretell the result:  they are both Predictive (measure something that leads to the goal) and Influenceable (something we can influence).   Some examples of predictive goals include the number of sales calls required to get a request for bid, or the number of safety "near misses"  before an accident happens.  Increase sales calls and bid requests will follow:  elevate management of "near misses" to identify and reduce safety hazards, and accidents will decline.  Lastly, keep a compelling scoreboard and a cadence of accountability to keep things moving forward.

Developing Leaders - Leader Standard Work

“The culture of a company is the behaviour of its leaders.  Leaders get the behaviour  they exhibit and tolerate. You change the culture of a company by changing the behaviour of its leaders. You measure the change in culture by measuring the change in personal behaviour of its leaders and the performance of the business.”  Larry Bossidy (former CEO of Honeywell) and Author of the book Execution.

Think of a lean system as a house with a foundation, pillars and a roof.  If the system is not ‘tied together’, it becomes weak; even if one wall or pillar is strong.  Standard work is the nails (or glue!) that holds the lean structure together and gives it the leverage and  strength to maintain gains. 

Value added work is done on the shop floor, so standard work must start there.  Each level of standard work must support and overlap the level below it like shingles on a roof to ensure alignment of efforts and full coverage of initiatives. It also serves to identify opportunities of improvement, training and coaching, and serves as an audit mechanism.  Together, we walk the walk.

Leader standard work varies by management level.  At the very lowest level of management, daily tasks are more explicit.  Group and Team leaders have daily checklists emphasizing startup, material supply, process audits, and first level problem solving.  Supervisor standard work centers on problem solving and process improvement. "How can I help you improve your process?" should be on her lips every day.  In addition, she focuses on coaching and mentoring her team, along with several deep dive process audits.  Production manager standard work is broader still, focusing on problem solving and team development.

The 4 Drivers of Lean

​There are 4 Drivers of Lean Organizations, be they physical (manufacturing) or transactional (office) processes. Each lays over the other, supported by the other and extending the ability to root out waste and improve operations:

  • Workplace Organization, also known as WPO or 6S (Safety, Sort, Set in Order, Shine, Standardize, and Sustain), is the basis of any lean operation.  WPO ensures that each operator has a clean, safe, workstation equipped with all the tools and materials she needs to perform her operation.  There is no clutter or unneeded materials, and work instructions are in clear view.  Work is standardized and audited, and each worker is responsible for her own quality.  WPO also encompasses metrics and sustainment systems to ensure we are constantly moving forward in our improvement efforts.
  • Uninterrupted Flow minimizes the interruptions and shop floor inventory.  As much equipment as possible is placed “in line” to ensure a constant flow in production and minimize bottlenecks.  The fewer the parts on the line, the less rework and obsolescence.  The fewer steps in the process, the less possible sources of error.  Once the plant is organized and work is standardized, focus on keeping product moving through the process.  Any bottlenecks are quickly identified and become the focus of management efforts.
  • Error Free Processing ensures quality in every operation, for both internal and external customers.  We employ poke yoke, or mistake-proofing devices throughout the plant to ensure parts are processed correctly.  An example of a common poke yoke device is a gas cap being attached to the car - making it difficult to leave it on top of the pump!  As quality issues are identified (usually due to poor flow), they are addressed.  In some cases this may be through improved standard work (Workplace Organization).
  • Single Minute Exchange of Die (SMED) ensures a maximum flexibility in manufacturing, so that any number of products can be made in any combination, in any quantities.  As orders are received, we can load entire orders rather than grouping by part number.  Once Product is flowing well, with few quality or other interruptions, efforts can focus on smaller and smaller lot sizes, shortening manufacturing lead times while improving customer service levels, all the while shrinking inventories.

Blocking and Tackling:  Daily Execution with Visual Management

Work is just that:  Work.  It is a tough grind, but it can be fun, especially if you have team engagement and are achieving your goals.  The best way to do this is to build good daily habits:  daily execution and visual management.  It is said "culture eats strategy for lunch."  I'm here to tell you structure builds culture.  So building the right visual management systems with a good Leader Standard Work and shop floor control will change your culture and enable a continuous improvement strategy.

Track production hourly against a standard, and identify setbacks and problems as well as good news on an hour by hour chart.  Note problems on a "Kaizen Newspaper" - assigning them to team members for follow-up and resolution.  The goal is to paint a clear picture of operations.  The impact of startup, materials and personnel shortages, and general flow of material can all be seen at a glance in this format.  Taichi Ohno, father of the Toyota Production System, was fond of saying "go to gemba" (the workplace).    That's where it happens.  Like cooking, Operations Management is an active, messy, hands on discipline - you have to get to the kitchen to make it happen.

The next level of tracking is the SQDC Board (Safety, Quality, Delivery, and Cost).  The SQDC Board serves as a nerve center where key metrics and goals are tracked, and should visited by key managers in a daily "gemba walk".  Our first responsibility is to the safety and well being of our employees.  Safety issues, incidents, and opportunities for workplace improvement should all be tracked, and the number of incident free days is cause for daily celebration.  Next comes Quality, with daily quality feedback as well as a "Pareto" of top quality problems for each are - this is the default focus of problem solving.  After Quality comes Delivery - did we adhere to our plan?  Did we ship our products per our commitments?  Take care of customers and they will take care of you.  Cost is largely driven by Safety, Quality, and Delivery; that is why we track it last (along with some WPO Sustain metrics. 

Daily Problem Solving

We all solve problems, each and every day, and yet we organize our workplaces we do so from the top down and forget to engage front line employees.  It turns out, when we hire people, in addition to a back and hands, we get a brain.  Structured problem solving is a way to engage our employees in continuous improvement of their own work area.  They are the experts:  unleash their problem solving abilities using structured problem solving.   The term "structured" problem solving" is deliberate and critical.  All structured problem solving techniques follow the scientific method:  systematic observation, measurement, and experiment, and the formulation, testing, and modification of hypotheses.  Without proper structure, we often jump to conclusions and tend to solve the wrong problem.  Chronic problems require rigorous problem solving methods.  

Critical to problem solving is to ensure we are following standard work, so the first questions for problem solvers is "Is there standard work and if so, are we following it?".  When all else fails, go back to the recipe.  This question is very powerful and has several effects on the organization.  First, it emphases that there is, or should be, standard work.  This is the basis of all improvement.  Adhere to standard work before trying to solve process problems.

The next questions revolve around what might have changed to cause the problem.  Are the materials in spec?  Has the operator been trained?  Are our tools in good condition?  In essence, the question is "why now?"  "Why not before?".  So, we know we have a problem.  What is the problem, exactly?  We need to have a clear problem statement - one which describes when we have a problem and how we measure it to be a problem.   Charles Kettering wrote "A problem well stated is a problem half-solved".

Several easy to learn tools help us define root cause:  5 whys and the fish bone diagram.  The 5 Whys seeks a trail of how the problem came about.  The fish bone diagram lays out the 6 M's (Method, Manpower, Machine, Materials, Measurement, and Mother Nature).  Each is examined as a possible cause and the more suspect components are identified as probable causes.  Experiments can then be designed and implemented to test our hypothesis.

At the Lead and Supervisor Level, simple problem solving work sheets can quickly guide problem solving efforts, especially sporadic problems that pop up infrequently, and most problems are easily tackled.  More stubborn, chronic problems, may require more sophisticated methods involving Design of Experiments and statistical analysis.  Daily problem solving builds muscle memory, cements learnings, and strongly enriches the organization.   Problem solving should be incorporated in the daily gemba walk.

Continuous Improvement

At the heart of every lean journey is Continuous Improvement - constant reinforcement and renewal.  Processes are stabilized (step), and then improved using kaizen efforts (rise).  The Deming Wheel (Plan, Do, Check, Act) guides each improvement effort.  Little by little, problems are solved, friction is reduced, the process flows easier, and the team is strengthened.  As I was quoted in Achieving Business Excellence in 2006, "Every time we pick low hanging fruit there's always more.  It's just that you're a little taller this time".

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ADKAR Change Model