lean implementation overview

A Point of View on Lean Implementation

Roper & Associates Inc.

Page - 2Roper & Associates Inc.

Executive Summary

Lean manufacturing* is a proven approach to dramatically improve operating performance

Lean success has been elusive for most organizations, with benefits much less than advertised and much harder to maintain

Lean success depends on seven key elements:

Three integrated system elements

A lean operating system

Sustained by a lean management system

Supported by appropriate organizational mindsets and behaviors

Four implementation strategies:

Implement by value stream; deploy in “generational waves”

Implement to achieve specific, measurable business objectives

Decide in advance how to “cash the check”

Support with a robust change management structure

* - we use lean manufacturing generically; the same thoughts would apply to administrative lean implementations


Executive Summary

CurrentState

Performance

Future StatePerformance

Change management structure

Lean operatingsystem

Lean operatingsystem

Lean managementsystem

Organizational mindsets& behaviors

Specific quality, cost, delivery & asset productivity improvement objectives

Lean implementation is the bridge to improved value

stream performance

If any of the seven key elements of lean success is missing, lean implementation will fail or deliver sub-optimal results


Three integrated system elements

Lean operating system

Lean management system

Organizational mindsets and behaviors



An operating system is the process by which material, information, people and assets are organized and used to deliver value to customers

For a manufacturer this includes equipment, processes, layout, inventory, facilities, planning and scheduling practices, manpower, etc.

Application of lean technical tools improves operating system performance by reducing waste in processes



Material

People

Information

Assets

Quality

Asset prod

Cost

Delivery

PerformanceInhibitors

•Variability•Waste•Inflexibility

Process inputs Operating system(Performance = Sumof micro-process perf)

Performance outcomes

Operating performance improves as waste and variability is driven out of micro-processes and flexibility is improved

However, lean technical solutions alone are not sufficient to achieve and sustain lean’s full potential



Using lean tools, processes are designed to produce specific results (improved relative to non-lean processes)

Operating performance improves as lean process improvements are implemented and sustained

But . . . sustained results don’t just happen; specific management processes must be used to ensure that lean processes operate as designed

A lean management system is required


Lean Management System

A Lean Management System is the set of formal systems, structures and accountabilities needed to manage and improve lean processes day to day

A Lean Management System includes:

Intense focus on work group performance and any deviation from expected results

A daily accountability management process to identify and react to deviations

Metrics to define expected performance and measure deviation

Leader standard work to ensure a focus on process management

A lean management system is initially needed to build the organizational discipline required to sustain new lean processes

A lean management system ultimately leads to “lean culture”

the employee involvement, problem solving and process improvement focus essential for lean success



“Culture” is the sum of people’s habits, related to how they get their work done

Culture cannot be developed directly; it results from the management system

The lean management system forces the required practices to be performed until they become the new habits, or culture

“It is easier to act your way into new waysof thinking than it is to think your way

into new ways of acting.”Paraphrased from Toyota



Daily Management Systems (DMS) are used to build organizational discipline, drive focus on performance and create “new habits”

DMS is applied at the work group (micro- process) level, and has several key elements:

Primary visual display

Shift start up meetings (and daily accountability process)

Lean daily control system (metrics and leader standard work)

Work group action sheets


Organizational mindsets & behaviors

Organizational leaders set the tone; they must understand lean systems and support core beliefs, such as:

Lean is a business system, not a manufacturing (only) system

Process discipline is critical; it must be established and sustained

Focus must be on system effectiveness, not functional efficiency; within manufacturing and across the business

Must “trust” process improvement to drive results (“Creativity before capital”)

Value people and empower them to succeed

Recognize that a lean system is only as strong as its weakest link; all organizational functions must align to support lean processes



Leadership includes all management in a business from shop supervisors to senior leaders

For many, new mindsets and behaviors will be foreign concepts that must be coached and practiced to be learned

For others, they will be intuitive, especially for those involved in previous lean implementation successes

For lean to succeed, there can be NO exceptions to supporting the required mindsets and behaviors – there will be casualties along the way


Four implementation strategies

Implement by value stream and deploy in generational waves

Target specific measurable business objectives

Define in advance how to “cash the check”

Support with robust change management structure


Organize by value stream

Experience has shown that value stream based lean implementation is most effective

Demonstrates measurable business results for integrated product flow

Opportunity to apply full range of lean tools

Opportunity to integrate lean operating system and management system, as well as align necessary support functions

Supports generational deployment approach

Effectively target improvement activitiesA (production) value stream is all the actions (both value adding and non-

value adding) to bring a product from raw material to the customerLean Enterprise Institute


Deploy in generational waves

Generational wave deployment sets the pace of lean implementation, integrating the need for results, with the realities of support requirements and organizational capacity for change

Generational waves of lean deployment

“Chunk up” implementation to make it manageable

Provide a logical deployment path for lean implementation

Leverage internal learning and staff development

Wave II projects to further improve existing value streams

Expand lean implementation internally – order entry, engineering, etc.

12 – 15Months

(3-4 monthsper VS)

6 - 12 months

6 - 12 months

Example - Organize by value stream – Deploy in waves

A

C

B

PhaseVS I

Targets

•Reduce mfg lead time/WIP & simplify process management

Implement By Value Stream

Deploy in G

enerational Waves

VS IITBD

VS IIITBD

VS IVTBD

Wave III projects to further improve existing value streams

Expand lean implementation externally – suppliers and customers


Target specific improvement objectives

“If you don’t know where you’re going, any road will take you there.”

To generate the required organizational focus and commitment for lean success, improvement objectives (what’s being targeted through lean implementation) must be specific, business based and significant

If not significant and specific:

the organization will not always make the changes necessary to achieve it, or

the organization will declare victory too soon and fail to achieve lean’s full potential


Target specific improvement objectives

Performance objectives must be based on an evaluation of current operations:

identify key performance inhibitors within the operating system

define impact of eliminating or reducing them

Such evaluations are typically performed by value stream, understanding for each:

What process steps are involved in satisfying customer demand (and which are truly value adding)?

Where lean improvements should be targeted to improve value stream performance?

How significant the performance improvements should be – QCDAS

Such evaluations must specifically address management system and behavior/mindset needs


Define in advance how to “cash the check”

Successful lean implementation will improve operational performance by increasing capacity

Performance improvement will not flow to the bottom line unless something changes, e.g. people leave, sales increase, overtime decreases, work is insourced, etc.

People immediately “see” the improvement opportunity and will question how it will be realized by the business

Management must have a credible plan for how the improvement will be realized, communicate it as part of the lean implementation and follow it



Changing an organization, with lean implementation or any other initiative, is different than managing one

Change related activities must be separated from day to day management activities and focused on intensely to succeed

An Executive Steering Team or leadership team must plan the implementation, then meet regularly to:

Review progress against the plan

Address barriers to achieving plan objectives

Names are irrelevant, the keys to success are:

Have a dedicated change management organization

Have the discipline to follow the process rigorously

Focus on deliverables, not activities, and effective countermeasures to achieve results



The leadership team and change management process are crucial to ensure that mindsets and behaviors align to support lean

Traditional management focuses on results and fire fights daily to achieve it

Lean management installs sound processes, then sustains and improves those processes to achieve results

A lean organization’s mindsets and behaviors must evolve to focus on process discipline and continuous improvement as the way to improve performance


Summary

Successful lean implementation can dramatically improve business performance (QCDAS)

To succeed, lean must be viewed as a business system that extends beyond manufacturing

A lean system focuses on improving and sustaining micro-process performance, to improve organizational performance

A successful lean manufacturing system must have three integrated elements

Operating system

Management system



Summary

Successful lean implementations follow four strategies

Implement by value stream and deploy in generational waves

Target significant, measurable improvement objectives

Define in advance how to cash the check

Support implementation with a robust change management structure

Successful lean implementations typically proceed through phases and are managed using policy deployment tools

lean implementation overview

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