Changing to Lean, Part 2

No magic pill

Published: Monday, March 17, 2008 - 22:00

As is the case with any lean implementation in a traditional environment, culture change is the most difficult obstacle to success. A company can hire consultants, develop work teams, and begin lean initiatives, but if it only talks the talk, the initiative soon becomes just talk.

The transformation to a lean enterprise isn’t easy. Senior management must lead the process while being driven by the employees. Goals must be established up front, so everyone is working toward the same goals. The difficult part is that the lean initiative isn’t like algebra; it’s the geometry you always tried to avoid.

Consider the following:

Our favorite algebra equation is: X+Y=Z

The area of a triangle is: ½ B x H

Think of algebra as traditional corporate metrics—apparently simple, straightforward, industry-accepted, black-and-white. Terms such as absorption, capacity, and cycle time should come to mind. In this environment, we set goals that require machines to run constantly to absorb minutes, regardless of the fact that needed product cannot be run on those machines. This translates into running products that aren’t needed, consuming valuable material and increasing finished-goods inventory to reduce variances in metrics.

At the end of a reporting period the focus shifts to inventory levels, and instantaneous inventory reduction is mandated. In this mentality, 2–1=1, no questions asked. People, materials, and tools all have the same weight.

Now consider our triangle. Here, 2–1≠1, the whole is greater than the sum of the parts. Lets say “B” represents lean tools—kaizen, Jidoka, Heijunka, kanban, 5S, etc., and “H” represents our people. Half the knowledge of tools combined with total commitment of the people will get you the area of our triangle, or true lean culture change. If your focus is on only the lean tools, you won’t achieve success. The people part of lean is more critical.

With lean metrics, details are truly simple and straightforward. Measurements, such as delivery based on takt (production matched to customer demand), overall equipment effectiveness, inventory turns, and level-loading, are consistently monitored to achieve continuous improvement in all areas. Inventory isn’t built up without (or by artificial) demand. There is no mad rush to deliver product at the end of the financial cycle.

Accounting, the dreaded A-word
So, here you are. You’ve sent managers off-site for hands-on lean training. You believe they return as experts in lean after only 40 hours of training. You might have even conducted some overview training yourself.

Now, let’s get lean. Using the seven wastes and 5S guidelines, you immediately see room for improvement. Everyone jumps on board when you project cost savings. Your first project organizing work areas and connecting disjointed processes is in full stream.

“Did you know Bob’s machine is sitting idle today?” asks your operations manager. “Yep, sure is. We’re ahead on that machine, so we moved Bob down to help in assembly.” Good response—lean thought, cross-training staff, better utilization of the operator. “But that machine is costing us money, it needs to run.”

The A-word strikes again. Corporate executives all agreed that lean is the savior to the business. They may have even brought in consultants to educate everyone on lean manufacturing. The problem? Lean isn’t a manufacturing tool, it’s an enterprise tool; it’s a business system. The manufacturing workforce isn’t the only group that needs to change how they do business.

Is there a solution?
Developing a business case (A3), with all goals clearly defined, is a start. The A3 should follow the problem/cause/solution/action/measure (PCSAM) method. Remember the five keys to lean initiatives: delivery, quality, cost, safety, and morale, when creating a business case (defining the problem). Clearly define the current state, identifying wastes in the system (cause). Draw the future state using rules in use: Highly defined work, clear and binary connections, and simple and direct pathways (solution). Conclude the A3 with actions and measurements, including due dates and responsible parties.

Be upfront with executive management and ask the hard questions, such as “Will there be problems if machines are shut down when not needed?” This will determine how many machines you use, how many shifts you schedule, and how large your first-in, first-out or kanban systems need to be to achieve balance. Perhaps most important, be prepared to rewrite yearly goals to coexist with lean initiatives. This should even require executive management’s commitment to rewriting the company’s goals as well.

Companies that have unsuccessful lean programs try to measure lean initiatives with traditional metrics. Lean requires long-term vision, not the standard quarter-by-quarter evaluations and corrections. Executive management must adapt the traditional long-term of “1–2 years” to the lean long term of “10+ years.” There will certainly be short-term effects, some negative (specifically when dealing with stock valuations and implications). But, if you have the long-range plan, those short-term effects will come and go too quickly to jeopardize corporate performance.

Believing in lean is critical for success. Traditional metrics can cause conflict, but metrics aren’t the only cause. A mentor of mine was fond of this analogy: There are rabbits, turtles, and foxes. Rabbits learn lean, live lean, and love lean. They jump on the process and run with it. Turtles are slow to change. They are patient, maybe even resistant. But once they see lean in action, they will move in that direction and be as valuable (if not more valuable) as the rabbits. Foxes are the ones to watch. They pretend to believe in lean, but never make the conversion. Foxes talk the talk. When times get tough, they won’t walk the walk.

There is no magic pill for lean initiatives. The lean process requires time, commitment, and determination. Companies that cannot envision a long-term commitment to lean, and only use the tools for short-term gain, will achieve some limited success. However, without the culture supporting those tools, the lean initiative will fail, becoming the flavor of the week that everyone knew wouldn’t last.

Albert Einstein said it best—“Without changing our patterns of thought, we will not be able to solve the problems that we created with our current patterns of thought."

The previous article in this series:
Part 1: Roll-out (-through, -by, -over)

About the author Mike Thelen is the lean facilitator at Aberdeen, South Dakota-based Hub City Inc., a subsidiary of the Regal-Beloit Corp. in Beloit, Wisconsin. He has led lean initiatives in positions from front-line supervisor to system coordinator in various corporations since 2001.

About The Author