360 Degree Metrics for Lean Transformation

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While embarking on a holistic Lean transformation, I have seen practitioners struggle to come up with metrics that can provide a 360 degree view of the quality of a deployment. What normally happens is that success is defined with metrics such as quality and lead time, which are right but not complete. The success of a Lean transformation should be measured with an all encompassing set of metrics, which covers the immediate and not-so-immediate performance issues as well as elements that ensure sustainability.

My experience tells me that the majority of times practitioners take up an incomplete set of metrics is because Lean change agents are not aware of what comprises an all encompassing list. Even if they are aware, they are not comfortable placing the entire set of metrics on the table as they are not sure how they would accomplish using them. Or, they would not like commit to using metrics that are very organic in nature and have results that take time (such “people engagement” metrics).

The type of metrics that practitioners will use will vary based on the context and the type of Lean project that has been chosen for implementation. However, as leaders responsible for Lean implementation, we need to keep in mind the most important metrics that should be looked at to gauge the health of a Lean transformation.

Important Metrics for a Successful Lean Deployment

There are broadly two types of metrics that need to be kept on the radar:
 

Primary Metrics
 

 Secondary Metrics
 

Avoid a Half-Baked Lean Transformation

If a Lean transformation does not positively impact all the above metrics, it is a half-baked transformation. We all know what happens to half baked products.

Just imagine that a Lean transformation of mortgage processes delivers great metrics in the areas for lead time and quality but there is no visible change in employee engagement. Do you think the change will sustain?

Or just imagine a project done on a sales process that showed radical reduction in acquisition costs but the quality of interaction with customer continued to be less than acceptable. Do you think the improvement met all the business expectations?

Or let’s imagine a Lean process improvement that has excellent lead time and quality ratings but is not able to take care of the variability of customer demand.

I have seen companies declaring victory by looking at commonly used metrics such as “lead time," “quality,” etc. This is “good” but if you are looking for “great” results focus on all above that I have listed. Some may take time to show results but I can guarantee long term success.

Contributor:   Debashis Sarkar

Debashis Sarkar is one of world’s leading lights in the space of service Lean. Over the last few years he has been researching, experimenting and working on how to successfully implement the Lean principles to service companies. He has led large number of Lean service transformations and his efforts have led to the pioneering contribution to service lean comprising: A) The DEB-LOREX™ model, B) holistic approach for service lean implementation and C) blueprint for 5S implementation in service companies. The details of these have been encapsulated in his books titled: Lean for Service Organizations and Offices–Holistic Approach for Achieving Operational Excellence (ASQ Press, 2008) and 5S for Service Organizations and Offices–A Lean Look at Improvement (ASQ Press, 2006). Sarkar is a much sought after speaker. He is also the first person in Asia to have successfully led the lean deployment in a service business.

Sarkar is currently Global Champion & Head (Asia-Pacific) - Enterprise Lean Sigma at Avery Dennison. Prior to that Sarkar lead the Organizational Excellence function at ICICI Bank and is credited to have authored its quality strategy and other enterprise-wide improvement program. He has also held leadership positions in companies such as Unilever, Coca Cola and Marico Industries.

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Report Abuse   MikeBresko 12/20/2009 9:52:24 PM EST Good article and reminder that a successful Lean transformation will affect each of these metrics. There is a risk in focusing on these though. A Lean transformation requires that managers understand that the process to achieve the results is as important, or more important, than the outputs. A 360-degree system of metrics should also include in-process metrics for critical processes. Replies (0) Post a reply Sign in or Sign up to post a comment

Report Abuse   asheeshkchopra 10/21/2009 5:04:01 AM EDT The definitions given for Primary and Secondary Metrics can be clearer, though one can get the import looking at the tables that follow. The content is not just specific to a Lean effort but also relevant to any Six Sigma initiative as well, and to me is very logically connected, and more offten than not is implicit for most projects. Replies (0) Post a reply Sign in or Sign up to post a comment

Report Abuse   KRISHNAN PM 10/21/2009 2:31:17 AM EDT Good,informative article.However, the term flexibility and its detailed description, though gives some clarity, creates some confusion as what and how flexibility can be measured..can you give more light to this?/ Replies (0) Post a reply Sign in or Sign up to post a comment

Report Abuse   preetineha 10/17/2009 1:19:12 AM EDT Hi Debashis, A very nicely written , comprehensive and eay to understand column as usual. I am a little confused about how we can take Customer Satisfaction as a secondary metric. In my mind that should be the first and foremost thing to measure in any Lean transformation in a service setup. Also, would it be wise to gauge the impact of so many metrics in a one Lean transformation.. Replies (0) Post a reply Sign in or Sign up to post a comment