Lean but wider
Ninety per cent of businesses fail to capitalise on early lean initiatives by taking them across the whole company. E&T explores how companies can translate early gains into wholesale, lasting improvement.
Many businesses handle the first stages of implementing 'lean' processes effectively, but really stutter in extending it across the organisation. Experience shows that it is not easy to translate changes made in small pockets of activity - usually on the shopfloor - into wholesale cultural changes, and more difficult still to make those changes permanent.
I vividly recall one event that really brought home the difference between theory and practice. When I was a young group leader at Toyota, my area of the factory encountered a problem. None other than Sir Alan Jones, Toyota's first UK MD and a renowned exponent of lean techniques, arrived to see what was happening.
He asked my team to show him what methodologies we were using, first to protect the customer and, secondly, to solve the problem. He then asked if we would have a proper counter measure in place in two weeks. Precisely 14 days later, he came back to check we'd succeeded.
Now, Sir Alan Jones had 4,000 people working under him and scores of managers who could have descended on us - but he chose to see it for himself. That's why he is one of the best-respected and most effective managers in industry. Having made us sweat profusely, his personal approval of our actions sent our morale soaring.
There are some good lessons here for anyone taking lean one step further. First, it illustrates the true link between lean and strategic objectives. The MD's first question was not technical; it was about actions taken to protect the customer. That is because customer value was the established yardstick for prioritising action across the organisation. Lean for lean's sake is pointless. Companies that really profit from lean use it to establish and strengthen what really matters to the business's success - in lean parlance, mapping the 'value stream' of their processes from the supply chain right the way through production to customer delivery.
Secondly, although pilot schemes are invaluable for getting the basics in place, you may need to revisit what you have already done when you try to implement procedures on a wider scope. In this instance, we certainly had theoretical understanding of the 'lean fix' but the boss was making sure we could apply it in practice in a new situation.
The Toyota Production System that gives us the lean methodology did not come carved on tablets of stone; there was trial and error in learning what worked and what did not. At the Manufacturing Institute, we see that pattern recur again and again by companies successfully extending lean.
Often the root cause of waste lies well away from the area of the business where it shows up. In improving those processes, you also need to reassess the impact down and upstream, often by remapping the value stream. Look at the barriers sitting inside and outside the factory walls that influence your ability to meet customer demand. There are sites where two weeks of a three-week lead time are taken up by the drawing office. I have also seen businesses unwilling to change shift patterns even though their problems come from a massive bow wave of customer demand hitting them on Monday mornings.
The third lesson, however, is probably the best: behaviour will only change permanently if the person at the top leads by example. By creating an area of early success, you also create interest. But it takes time to make things second nature. Businesses that sustain lean are led by people completely immersed in its application. They understand the principles and they visibly follow them in everything they do; they give the teams time to make improvements; they encourage them to do it and they remove roadblocks for them. It is about as far away from traditional hierarchical management as it is possible to get.
Cultural change doesn't happen in a day or even a year. Take Spirax-Sarco in Cheltenham, which makes steam and condensate control equipment. Its achievements are remarkable; so far its leadership development programme has yielded over £2.5m in realised and potential project savings, ten times more than the sum invested in it. But no one should underestimate the effort of the 120 people involved. Business improvement manager Mike Hart is adamant that only 20 per cent of lean gains actually come from tools and techniques. The other 80 per cent is derived entirely from developing people.
"We don't all come up at the same pace - that's true of any company in my experience," Hart explains. "You have to let people seek and understand for themselves. You need a management culture that is responsive to that. You also have to create a learning environment that seeks profound knowledge of the processes so that decisions are based on fact."
Mike Hart practises what he preaches. Earlier, as operations manager of one of the biggest sites, he sent a team member on one of our courses. The results persuaded him to enrol too. He has subsequently been awarded a Lean Fellowship to the Manufacturing Institute and has completed an MSc in lean operations at Cardiff University. His experience of moving beyond the pilot convinces him there are few shortcuts to winning hearts and minds. The pilot focused on introducing a tool that supported production flow by sizing lines to 'pull' from customer demand. It brought standardised working practices, better flow, improved lead times and delivery performance and exposed difficulties in the supply chain for problem-solving.
"We went straight from the first lean principle to the fourth. We hadn't gone through identifying the value stream and yet we were expecting people to seek perfection." This lack of groundwork affected supervisors and managers more than operators: "It appeared they couldn't accept the pull system would work if they followed the rules. They constantly broke them by going back to their old behaviour but we hadn't spent any time with them or allowed them any input on what new behaviours should be."
He worked with the Manufacturing Institute to develop a 'Leadership for Lean' event for all the senior managers. His team followed it up with an 11-module programme for first-level leaders with 13 days' off-site development: in all, 120 people are in or have completed the programme. It not only teaches the technical aspects, philosophy and principles but also reinforces knowledge through work-based projects, encouraging them to feed back the results for discussion with their peers. Significantly, the programme is helping them develop the cognitive leadership skills to engage the whole workforce of over 600. They deliberately created a supportive environment. A colleague visits them on request to resolve difficulties and 'buddy groups' of four peers meet every two weeks. "Previously, the message wasn't coming down - now we have this groundswell doing wonderful things with people at the processes."
Improvement accelerated with the formation of teams integrating planning, purchasing, production engineering and supervision, and product support, aligned to the value stream and reporting to a value-stream manager. The effort has brought tangible returns across the board. In one area of the business, lead-time has come down from an average 5.5 days to a guaranteed 3 hours 15 minutes. More tellingly, continuous improvement work and home-grown kaizen events have yielded millions. The range is huge. A welder spotted he could save £320 a year in the time spent picking up stores by investing £60 in a welding bay kanban. An exercise with stores staff showed a small investment in storage and transport materials would save £60,000 a year in damage to polished materials.
Mike Hart says it comes from encouraging people to determine the 'how' of any improvement for themselves: "It's plain sense to invest in people and the return is enormous. People are, after all, our only appreciating asset - if we allow them to be."