Why you should approach Lean as a system
It is well accepted by now that "Lean thinking and practice" is more than just a tool-kit. That's what always separates the practice of lean thinking from the various process improvement models that have come and gone over the past few decades, such as total quality management, six sigma, business process reengineering.
Those tickets were exactly that: a tool-kit to improve processes.
The most successful lean adaptations occur when service organizations seek to manage the series of steps that produce value as a whole, rather than in bits or silos. This "systems" approach has implications across the organization, not least the measurement of productivity at the system level rather than by unit, which focuses management effort on global rather than local efficiencies.
But a culture that supports continuous improvement is required for Lean to work and achieve the consequent reduction of cost and head count from systems.
Lean manufacturing includes a set of principles that Lean thinkers use to achieve improvements in productivity, quality, and lead-time by eliminating waste through kaizen. Kaizen is a Japanese word that essentially means "change for the better" or "good change."
The goal is to provide the customer with a defect free product or service when it is needed and in the quantity it is needed.
Taichi Ohno, former Toyota Chief Engineer, identified 7 wastes of manufacturing:
- Unnecessary Inventory
- Inappropriate Processing
- Excess Motion
These wastes should not be considered separate categories; instead, we should use these wastes as a teaching/learning tool to help identify opportunities to improve our work environment and focus on adding value for the customer. Wastes are non-value-added activities for which the customer would not be willing to pay.
The 5 principles of Lean thinking that Lean manufacturers employ are, according Jim Womack and Daniel Jones in Lean Thinking:
1. Specify Value
2. Identify the Value Stream
3. Make Value Flow
4. Let the customer Pull
5. Seek Perfection (Continuous Improvement of Quality and Productivity)
So how do you put these principles into action? The value stream manager should periodically clarify priorities for the value stream and identify the performance gap between what the customer needs and what the value stream provides. The manager should then engage everyone touching the value stream in carefully figuring out what is causing the gap.
"The next step is to envision a better value stream," Womack says, "and then determine who will need to do what by when to bring it into being. Finally, the value-stream leader needs to determine what will constitute evidence that the performance gap has been closed and collect the data to demonstrate this. This exercise is, of course, nothing but Dr. Deming's Plan-Do-Check-Act (PDCA) cycle conducted repetitively by the responsible person."
Aligning people and process is both an art and a science and requires constant dialogue at all levels of the organization
Management by PDCA means applying the art & craft of science - PDCA - to the practice of management itself, to the task of aligning people and process to achieve purpose.
What it means to take a systems approach
A systems approach is a framework that has been developed to trace low-level decisions to high-level system objectives.
For instance, the diagram below shows how the improvement activities of a small group of people flow upwards to the top level objectives of the organization (i.e. increasing profits in a slow growing economy). This perspective helps to people to see how what they’re doing contributes towards the achievement of each performance objectives.
How improvement activites link to overall business objectives. Image
Lean helps to add detail to a systems view of the world by encouraging managerial interest in the way work and information flows through the system, particularly where it flows freely and where there may be bottlenecks. This allows us to focus improvement efforts on those areas that will improve the whole system and avoid sub-optimal changes.
The following diagram details why managing Lean as a system is beneficial to the organization as a whole.
But it’s not always smooth sailing. According to a recent Lean Enterprise Institute survey of 2,444 professionals about lean business system implementation in the United States, middle management resistance to change is now the number 1 obstacle to implementing a lean production system (out of a list of 12 barriers). The top-three obstacles to implementation were middle management resistance (36 percent), lack of implementation know-how (31 percent), and employee resistance (27.7 percent).
"The application of lean management principles exposes problems by traditional business systems, which often is threatening to middle managers in the problem areas," says management expert James Womack, Ph.D., chairman and founder of LEI. "To get middle managers on board with lean transformation, organizations must transform the metrics and behaviors for judging their performances."
Traditional financial metrics often need to be removed from day-to-day management decisions about key processes.
"Instead," he said, "operating managers have to learn to help employees look for waste and remove it. The financial numbers will be positive. Most metrics are nothing more than an end-of-the-line quality inspection: At the end of the quarter or the end of the year everyone looks to see what happened, at a point long after the mistakes have been made."
Creating a new kind of working environment is critical to establishing Lean system. The following are characteristics of a Lean enterprise:
- Positive, clear communications
- Ensure "no-blame" culture
- Work through cross-functional teams
- Staff involvement at every stage
- Process maps on display for comments
- Remove non-value added steps, hand-offs, rework loops
- Agree design principles with all
- Fix the root cause, not the symptom
- Ensure solution supports departmental interfaces
- Incorporate Continuous Improvement
Today, it is relevant that any organization that has set its goal to be a global player or a regional leader has to incorporate changes to be productive and competitive. Lean manufacturing shows the way to that goal.
Finally, Lean management isn’t just about managing KPIs (Key Process Indicators). Neither is it just trying to make everyone feel engaged. So there is freedom to adopt his/her the best system to obtain the situational advantage.
1 A Decomposition Approach for Manufacturing System Design by David S. Cochran, Jorge F. Arinez, James W. Duda, Joachim Linck, Production System Design Laboratory, Department of Mechanical Engineering, Massachusetts Institute of Technology. Cambridge, MA, U.S.A. 02139 s
2. Introduction to "Lean Thinking", Brendan McCarron, Performance Advisor, CIPFA Performance Improvement Network
3. Lean manufacturing: The practical approach to productivity Axcend Automation & Software Solutions, an enterprise manufacturing IT solution provider
9. "Value Stream Mapping" by James Womak
10. Lean Prospective in the January Issue of PharmaChem Magazine through B5srl.http://www.b5srl.com/