How to Screw Up a Lean Transition

How to Screw Up a Lean Transition

There are many ways to make the transition to lean.  Some work better than others.  One thing is for certain: It is considerably more difficult to make the change on a second attempt, i.e. after an initial failure.  This article addresses many of the common causes of the implosion.

  • All Show: No Go.
  • Microcosms of Excellence: Negligible Bottom Line Impact.
  • Solutions Looking for a Problem.
  • Teams for Teams’ Sake.
  • Unnecessary Complexity.
  • Foreign Language Studies.
  • Meaningless Awards & Certifications.
  • Data Overkill.

These are a few of the more common pitfalls that we see.  One fundamental tenant of “Lean Manufacturing” is the elimination of waste.  Yet, the majority of lean advisors propagate extremely wasteful practices in the transition methodology that they profess.

One of my personal favorites is the “foreign language” mandate.  Most Americans can readily relate to the word “waste.”  Does “muda” really add any value?  After twenty plus years, and 100+ plant conversions, we have found only one Japanese word that is truly required in making the transition to lean: “Kanban”.  Not only is there no easy direct translation into English, but kanban is also a generally accepted universal term.  For the others, we find that “level loading,” “mixed model production,” “opportunity signals,” “continuous improvement,” etc. work just fine.

Corporate management sent us into one of their large plants.  The plant had been losing money and struggling for several years.  Yet, the first remark from the plant manager was:

“We really don’t need any help.  We’re already doing lean.”

“That’s great,”  we said.  “What kind of results have you gotten?”

“We’ve got 20 certified trainers.  Each has been through two full weeks of education”  he said.

“That’s great”  we said.  “What kind of results have you gotten?”

“Every employee has had at least eight hours of training”  he said.  “We’ve got employee teams throughout the company.”

“That’s great”  we said.  “What kind of results have you gotten?”

Dead silence.  The teams had been working on such critical issues as “what radio station should be played over the PA system.”  The plant had no overall guiding methodology to implement meaningful change.  As a result, after two full years of training expenditures, they had generated absolutely no tangible impact on any of the plants’ key measurements.

In that same plant, with the same plant manager, we generated millions in tax free cash through inventory reduction, cut their aggregate lead times by more than 60%, reduced the internal defect rate by 79%, and cut late deliveries by 93%.    All within six months of kickoff.  Needless to say, overall productivity also increased dramatically.

Another typical approach we call “Solutions looking for a problem.”  They’ll blitz an area.  They’ll do a 5S pilot.  They’ll put in some kanbans.  They’ll form some teams.  They’ll do a SMED initiative.

This approach generates some nice show places.  Microcosms of excellence.  All good things to do.

However, when you ask the same question: “What results have you gotten,” you get a similar response.  “Negligible impact on the bottom line.”

It’s a scatter-gun approach.  The thought process, evidently, is if we fire off enough bullets, eventually we’ll hit something!”

Another vogue concept is “Six Sigma” or, better yet, “Lean Six Sigma.”  The idea is that we can combine the power of lean, with the rigors of the statistical quality approach demanded by six sigma.

It’s a great marketing concept.  But does it really hold any water?

Six Sigma is a well defined process, developed to address complex quality and/or process deviation issues.  It is rigorous, and often requires the use of some higher level statistical techniques.  It is NOT, however, an overall operations improvement approach.  And, when you dig a little deeper into the quality gains attained by most self-professed six sigma plants, you’ll find that well over 95% of the gains came from simple, completely non-technical, basic lean manufacturing tools and techniques.

We’ve visited plants with dozens of Black and Green Belts, and a considerable amount of time and money spent on statistical training at the general operator level as well.  Yet we still found piles of inventory, long lead times, and poor customer service (delivery performance).   There is a lot more to “quality,” from the customer’s perspective, than just having reliable processes!

Transitioning to lean generates dramatic gains in OVERALL process quality.  It does this, however, through basic blocking and tackling methods requiring no special statistics:  1) less inventory means fewer defects and faster discovery (a major component in determining root cause),  2) sequential inspection catches the defect at the very next operation,  3) Stop the line: Fix the problem.  4) simple failsafe devices make errors difficult or impossible to re-occur, etc.

In a truly lean environment, six sigma is seen as just one more tool in the lean manufacturing tool box.  It is used where and when appropriate to solve specific difficult quality or process problems.

We visited another plant that was “already doing lean.”  When we walked through the facility, it was apparent that it still ran in a completely traditional manor: piles of inventory between operations, no cells, no kanban or other visible means of control, poor delivery performance, etc.

When we asked what they had accomplished in the fourteen months since they’d started working with their lean consultants, they pulled out a three ring binder.  In it was an amalgamation of data of every type.  They had standard work data, set-up times data, attendance data, job description data, quality data, …  They had data up the wazoo!

Ask the same question: “What results have you gotten.”  Get the same response.  Nothing had changed!

We visited another company that wanted the Shingo prize.  We asked  “So, how far along are you in the transition to lean?”  They hadn’t even begun.

Getting a prize or certification can be a good way of keeping score.  It also can be a powerful marketing gambit.  It is, however, transitory, and not a very compelling reason to pursue this difficult transition.  To be honest, if serving your customers better than your competition, or assuring survival of the company, or competing against foreign suppliers, etc. isn’t compelling enough reason, then you might want to hold off for a while.

We’ve worked with companies that were already in chapter eleven and fighting for survival.  Even with their backs against the wall, and every employee facing possible loss of job, it was a challenge unifying the troops to make this cultural transition.  Sustaining the effort required to become World Class demands a higher cause than winning a prize.

In most companies, transitioning to Lean is truly a culture changing process.  It requires a new way of managing, with different measurements and reward systems.  It requires an overall company-wide transition process, with clearly defined measurable goals, and well defined responsibilities.  It requires top management sponsorship, and regular on-going administration to assure that the goals are being accomplished.  You can’t just go out and buy “one of those lean things.”

Bottom line?  Every company, hopefully, only makes this transition one time.  And there are plenty of land mines to be overcome in the process.  Get yourself a good advisor to guide you.  And look out for the snake oil salesmen!

If you would like a few articles on what it DOES take to transition to world class operating performance, I would recommend that you start with the following:
“How to Optimize Your Entire Plant,”
“How to Attain Near-Perfect Delivery Performance,” and
“The High Cost of Complexity.”

If you are less than thrilled with your Lean Manufacturing results to date, you might want to check out our “Lean Bench Marking” article.   This is what you SHOULD EXPECT in the first 9-12 months!

We’ve got a track record of continuing dramatic bottom-line successes since 1988!   Drop us a note, or give us a call.   There is no charge for a discussion and I guarantee you won’t be disappointed!

All the best on your lean journey!

Jack B. Harrison
Senior Partner
The Hands-On Group
info@handsongroup.com
407-299-5245

www.handsongroup.com

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