I’ve been working with a great company recently. They make several lines of furniture which share numerous characteristics. They sell many standard products and components, but they also make-to-order customized products configured for specific sites often with very short lead times. They absolutely have to be able to promise firm delivery dates. The furniture must be on site on the day the furniture fitting team is going to be working. The company is profitable, well respected in their industry, and growing steadily each year. It has an excellent work culture and very talented people.
I have explained my enthusiasm and respect for this company because I am going to point out some misgivings I have observed there that are common across many companies. Pointing out these issues is meant to be helpful. Do you see these traits in your company?
This company has been working with Lean for 6 or 7 years, and yet the progress in their primary plant does not match the amount of time and energy they have put in. Why is this? Is something wrong with Lean? Are wrong beliefs or mental models holding them back?
Here are some observations I have made. You be the judge – in regard to your own company.
Everybody at this company keeps telling me how many different products they sell and how many materials and components they use. Of course, these are truthful statements. Behind it though, the unstated message goes something like this: “Our business is so much more complicated than an average companies using Lean methods.”
This myth is baked into the company’s culture and is 100% wrong! This sort of “we are different and we are more complicated” mindset creates complacency and resistance-to-change in many companies I have worked with. It’s a way of cutting some slack, where none is needed. Leaders allow slow, half-way or unfocussed measures of Lean continuous improvement. They miss both the point and the benefits of Lean.
Real success with Lean is driven by passionate and knowledgeable leaders. The complexity of the products, processes, and markets is irrelevant. In fact, these represent opportunities, not obstacles! Lean is hard work and every company’s Lean journey is difficult. It is especially important for the leaders to help the people keep their eyes on the strategy, embrace the change, and see the going-forward vision every day.
This company keeps telling me how long their employees have been with the company. To me this is a very good thing. It speaks well of the company and their people. But the unstated message is “We want to introduce radical Lean change, but these old timers just won’t accept it.”
I have heard these kinds of stories in many companies. But, like the complexity myth, it’s just another way for leaders to cut themselves some slack.
In fact, old dogs love to learn new tricks if they are taught by people who are true leaders and visionaries, who understand Lean, and who pass their enthusiasm along to their seasoned fellow travelers.
This notion that “some old timers are too set in their ways” is just another excuse for not making the Lean progress every employee deserves. I once worked at a large, very well-known, defense company where Lean methods were taking root. I remember one old timer who really “got” the idea of SMED; he began teaching others what to do, and soon the entire plant was making small “just do it” improvements left and right. Lean flow was taking root.
It is usually fairly easy to introduce Lean methods, practices and tools. It is very much harder to sustain them over the long haul. How can you sustain Lean improvement?
Here are a few tips.
- The changes and improvements must be done by the people working in the process. Not by specialists, not by managers, and not by Black Belts that swoop in, do the job, and swoop out again. If the people do it themselves they will do it better. They will understand it. And they will work to keep it going.
- The people doing the work must be encouraged (even required) to continue improving the process. Lean is never a one-time change. Continuous small improvements, aligned with the company’s Lean strategy, are what makes Lean work.
- The managers and leaders must be disciplined. They must to go to the Gemba every day and look at the process and continually discuss and review the improvements. This way the people working in the process will see that their improvement activities are very important, and they will keep doing it. Discipline is contagious, and good leaders will make sure everyone catches it.
This particular company has a full blown ERP system with a strong configuration module owing to the wide range of features and options of their products and the short lead times that add so much value to their customers.
But they recognized several years back that their MRPII features were based on push and were anti-Lean. So they have largely eliminated the use of MRPII on their shop-floor and they have developed some clever and appropriate methods to achieve the fast and flexible service their customers require.
This was a bold move and showed a real commitment to Lean and an understanding of Lean requirements. Unfortunately, they have kept their performance measures back in the MRP world.
The company collects detailed labor reporting against every production job in every cell, and uses this information to create labor efficiency reports. This motivates people to just keep making and making products so as to become “efficient.”
What does it lead to? Large batches, high inventory, long lead times, and shortages. The opposite of what we need from a Lean production cell.
This company’s primary performance measurements in the plant are posted on a visual board. They are neat and tidy monthly reports that tell you nothing about what needs to be improved, and are too late to control and improve anything. The accounting system produces a lot of inexplicable variance reports – again too late, and too obscure. These are reviewed by accountants, not the people who are actually doing the work. Overhead absorption variances drive profoundly anti-Lean behaviors similar to efficiency.
Should we be surprised that Lean drags its feet? The people who should be making daily Lean improvement are measured in ways that drive them in the opposite direction. For Lean to prosper it is vital that it use local, timely, Lean-focused measurements.
How About Your Company?
As I mentioned at the beginning, the company that got me thinking about these issues is an excellent company with much to be proud of. If they can grasp these fundamental Lean issues, they will become a powerhouse of Lean growth and profitability. How about your company?
Below are some links to blogs and videos about what Lean performance measurements can do to reverse these problems.
And, just for fun to see what happens when production is measured wrong.