Lean Success

Art Smalley

Art Smalley: Lean Success

By Art Smalley, author of Creating Level Pull and co-author of A3 ThinkingLast updated: Tuesday, May 31, 2011 – Save & ShareLeave a comment

We have discussed the topic of why so few companies really show substantial progress when it comes to lean implementation quite a few times on this web site. I won’t rehash all those topics in detail since they are available for those interested in a variety of different posts by different authors. For the last decade or more I have been lamenting about this topic in speeches, articles, interviews, and client discussions, etc. At least I am not the only one unhappy with the state of lean these days. One of the best ways to improve is to study failures and learn from those mistakes. Mistakes I’ve continually seen in lean programs come in a variety of different sizes and types. There is no one single root cause to conveniently pin the blame on or to enact a proper countermeasure. Shortcomings in leadership at the executive level as well as front line level are often evident. Companies fall in love with various fads or tools or fall under the spell of a certain consulting style and often run into roadblocks. Simple mistakes are made on fundamental concepts in the lean arsenal as well during implementation.

If I had to pick one graphic to explain the problem it would be the following image which I have been drawing on white boards for about a decade now. I’ll use that as a spring board for talking about success in a moment. The lean programs that I observe which are not succeeding very well make some form of the following mistake. They mistakenly equate implementing some sort of process or tools or even a system with achieving results. That is dangerous and naive thinking. Assume for example a company is in Zone 1 in the 2 x 2 diagram below. This company has neither standard processes or achieved much in the way of results. It is “Low” in regards to both dimensions. Obviously the company wants to be in Zone 4 which has “High” level or excellent business and manufacturing processes as well as great results.

In order to get out of the chaotic quadrant of Zone 1 companies embark upon a lean improvement program and start implementing different tools, concepts, or impressive sounding topics. Value stream mapping, Kaizen events, Kanban, Standardized Work, long lists of rules or principles, or even A3 reports fall into this category. The belief is that since Toyota uses some of these items then these must be the way the get to Zone 4 and better results in addition to better processes.

Unfortunately this is often wishful thinking. A lot of places that I visit are simply moving from Zone 1 straight north up to Zone 2. They can point to a lot of impressive activity, showcase quite a few implementation areas, and list some some positive local results. For the company as a whole however there is usually not a lot to show in terms of sustained financial or operational results. The Lean wallpaper looks good but the structure behind it is not that impressive.

What I term as success conceptually is Zone 4. In other words the company has figures out a way to study, standardize, and improve all types of processes AND concurrently obtain actual results in terms of profit, quality, productivity, delivery, and other important areas. Unless there is change for the better (i.e. Kaizen) in the form of results to show for the implementation then there is no success to brag about….

We can debate endlessly about how to move conceptually from Zone 1 to Zone 4 but the intellectual stimulation alone won’t move the needle for companies. Real problems have to be solved and leaders have to be developed for any organization to succeed. I have a list of questions that I run through when debating this sort of thing. My list is more tactical in nature than strategic by design (I’d be happy to discuss corporate strategy or finance at a different time!). If you can answer these questions to the extent that Toyota has and achieve results then you’ll be achieving success in lean.

1. How will you satisfy the customer and obtain a profit for your organization? Smart companies pay attention to the latter half of the question as well as the customer value angle.

2. How will you surface the vital few things for the organization to work upon and focus energy on these areas? This is simply Juran’s dictum of “vital few versus trivial many” or the “Pareto” concept.

3. How will you build in quality 100% of the time at the source process. In other works how will you achieve Jidoka in practice?

4. How will you design, manufacture, and delivery product (or services) 100% Just-in-Time?

5. How will you ensure that process availability is 100% when needed? Redundant capacity is not allowed as a solution.

6. How will you standardized work practices 100%? This includes all human work and not just shop floor duties.

7. How will you train and develop natural work team leaders who can do all the above in their area of control?

8. How will you sustain and improve over time? In other words how will you deliver results that matter and outdistance the competition.

I could go on with the list and include a few more things but this is enough for general discussion. I frame these items in the form of questions since I think the process of arriving at the solutions is very important. We can’t just copy what is seen or reported about Toyota’s shop floor. Trust me, I worked there and you’ll have to do they hard work (thinking, doing, learning, improving, etc.) that they did there in order to get similar results. Otherwise you’ll tend to wind up in Zone 2 as I cautioned up above. Answer these questions in detail, implement the countermeasures correctly, obtain best in class results and in my opinion you will be very successful in your Lean endeavors.