Thursday, July 16, 2009

A Lean Roadmap - where do we start?

I'm often asked what a typical lean journey looks like and how long it takes to become a lean organization. While the answer to those questions is as varied as the organizations that ask it, this post will explore the most successful and repeatable approach that I have been engaged with. If you would like a copy of this post as a downloadable PDF, click here.

Step 1 Create the environment

The concepts of lean and the thinking behind lean can seem quite foreign to traditional organizations. Thinking, approach and activities must be changed, sometimes dramatically. This is often referred to as the "culture" of the organization. Lean requires a collaborative, team oriented, customer focussed and systematic approach. This shift may appear threatening to people. Fear of change is real and usually unspoken. Often, a compelling driver for change is required - an "oh-shit" experience that instils a sense of urgency with the team. This could be the loss of a major customer, a competitor challenge, or a downturn in the economic climate similar to what we are currently experiencing. This "pain" can be a strong driver to explore new ways to do things and make your world a better place. Linking lean to the global organizational strategy is a winning approach. Top management must support the initiative and communicate global measures for success. It is important to assure people that they will not lose their jobs directly because of the lean initiative. Respect for people is a lean fundamental. People are a key part of the system.

Step 2 Introduce basic concepts

This may start with a benchmarking visit to see how other organizations do things. It may start with a seminar or conference. Or you may invite someone to your site for introductory training. Exploring how others have applied lean ideas and how these can transfer into your own organization is a key concept in lean thinking. Learning from the experience of others is key - you cannot afford (in terms of both time and money) to make all the same mistakes yourself. Some formal introductory training for your team to develop an understanding of the supply chain and your value stream usually follows. The language of lean and introduction to the terms so that they are widely recognized follows.

Step 3 Manage Visually

The internet revolution and our fascination with technology has led many of us away from managing visually. In our quest to have dashboards and KPI information on our desktop, we stop visiting the gemba - where the work is done. Lean visual management requires that we can see at a glance in the workstation what is working well, what is not working and where our hot spots are. Shadow boards, production control boards and product flow lanes can quickly highlight trouble spots and direct our attention to where we should focus. By understanding and implementing the power of visual management, we can achieve a step change in product throughput. This is the quick win "low hanging fruit". Managing visually typically starts with introducing a 5S process. The 5S process pulls the other lean tools out of the toolbox as the need is identified. Can you find anything in your work area in 3 minutes? Can anyone else find anything in your work area in 5 minutes? In most workplaces, a large amount of time is wasted looking for parts, materials, instruction or decision makers. Managing visually means that you can see at a glance what is working, what is not and what corrective action has been initiated.

Step 4 Understand the current state

Now that the organization has a fundamental understanding of lean concepts and is starting to manage visually, its time to understand what kind of mess we are in. A scoping exercise identifies each task we do, how long each takes, what inputs are required (materials, instruction, approvals) and which of these tasks add value (in the eyes of the customer). We start to identify waste and see improvement opportunities in our processes. At this point, its easy to get confused and overwhelmed with information. Often, even in small to medium sized organizations (under 100 people), several hundred improvement opportunities arise. What do I tackle first? How do I manage change so that I get the maximum benefit from my limited resources?

Step 5 Identify the bottleneck

These questions are very real - and very important to the organization. No company has unlimited resources and every company realizes that they cannot tackle everything at once. The key is to look at the value stream system throughput and focus our improvement effort on where this system throughput is bottlenecked. Spending time and money on any process that is not affecting system throughput will not achieve additional revenue for the organization. And if the bottleneck to the process is a lack of customer orders, then we should not be producing to forecast. In this case, we should focus our efforts on marketing and sales so that we only produce what we have commitments for, and our system can meet our customer demand. Continue to look at your processes as a system and focus your improvement efforts on managing the bottlenecks.

Step 6 PDCA

Now that we know where to focus our attention, its time to pull out some more lean tools from the toolbox. Put the Plan-Do-Check-Adjust continuous improvement cycle to work. Host kaizen improvement events in the bottleneck areas and ensure the team is using standard work, pull signals (Kanban) and error proofing techniques. Continue the PDCA process within your bottleneck processes and improve flow through your entire system.

Step 7 Strategy Deployment (Hoshin Kanri)

At this point in the lean deployment the organization has seen some success and continuous improvement can take on a life of its own. Many departments are adopting the principals and utilizing the tools effectively. An air of excitement exists where people see real change occurring and can envision the potential for future improvement. Its time to align the entire organization around our strategy and ensure we are all pulling on the same rope. Departmental objectives need to align with the company purpose and vision for the future. Often departmental initiatives are not aligned with corporate goals and may even directly oppose other departmental initiatives. In other instances, duplication of effort exists as departmental improvement initiatives outpace the internal communication processes.

The first place to start this alignment process is with the senior leadership. What is our vision for the organization in the next few years? What are the biggest issues facing the organization today that prevent us from achieving this vision? Define the organization's true north - the business needs that must be achieved. These will exhibit a magnetic pull for the organization, the same way a compass guides the traveller. If we don't know where we are going, we'll never get there!

Conventional strategic management emphasizes planning - strengths and weaknesses, opportunities and threats, values and social responsibilities. Lean strategy deployment asks the same questions, but emphasizes deployment - any fool can make a plan, its the execution that gets you screwed up!

Strategy deployment (Hoshin Kanri) utilizes A3 storytelling. If you cannot tell your story on one page (the A3), you have not thought it through thoroughly enough. Keep it simple and easy to understand. Tell your story and execute! The mother A3 will support the organizations true north. Baby A3's are initiatives that support the mother A3. This process focuses our attention, resources and effort on what's important for the organization as a whole. It focuses on execution - where the rubber hits the road - getting it done!

Step 8 Follow-up and review

Now that the organization strategy is aligned and resources are deployed on what's important, we must monitor the results of our activities and make corrections based on results. (The PDCA cycle applies here as well).

The approach above begins the lean journey with leadership team commitment. It engages the team leaders and people doing the work by introducing the tools and lean thinking concepts where the work is done. We achieve step change results by focussing on the bottleneck. And we align the entire organization with strategy deployment. Sound like a winning approach?

Feel free to contact me for real world examples of where this has been deployed and the actual results that can be achieved. We can also discuss typical timelines - how long will this take in your organization. Lean truly is a journey - its not just a set of tools or the program of the month!

Best success on your journey!


If you would like a copy of this post as a downloadable PDF, click here.
To discover more about organizational strategy and the A3 strategy deployment (Hoshin Kanri) process, click here.


Jamie Flinchbaugh said...

A good and important topic. Getting the deployment and implementation strategy right is extremely important. Your recommendations are flexible enough that people can't get too far off course. However, I have to caution.


There might be a right one for you, but there is no right one for everyone. Every organization is different - different cultures, resources, business conditions, capabilities, etc. You must build a plan that represents your unique conditions.

We have found through developing many, many implementation strategies for companies from Intel to Harley that this is true - there is no one right way. You must chart your own course.

Jamie Flinchbaugh

Norm said...

Well said Jamie.

There is no ONE right implementation strategy.

Every organization is unique and has its own challenges to overcome. That is why many become frustrated on their lean journey - a solution that works well in one company cannot be simply transplanted into another - it may not work there!

The PDCA cycle, however, is a sound approach and the foundation to continually improving.


Jamie Flinchbaugh said...

No question - you can't go wrong if PDCA is mastered and central to your approach.


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