Sustaining Lean

The IndustryWeek/MPI Census of Manufacturers released in November 2007, shows that nearly 70% of all plants in the U.S. are implementing Lean Manufacturing. But not all are doing it successfully! The same IW/MPI survey found that only 2% of companies, who responded to the survey, have fully achieved their objectives and 24% all companies reported achieving significant results. That means that about 74% of the responding companies are not yet realizing significant results. Some were probably just starting to implement Lean but surely others have been working on it with less than desirable results.

Ray Pay, a Lean consultant, suggests these major reasons that companies fail to achieve benefits when implementing Lean. They are:

1. Senior management is not committed to and/or doesn't understand the real impact of Lean.
2. Senior management is unwilling to accept that cultural change is often required for Lean to be a success.
3. The company lacks the right people in the right positions.

When senior management tries Lean as a fad or quick fix, it is doomed to yield limited results. Mr. Pay says executive managers need “to fully understand the various stages of implementing Lean so they won't be tempted to pull the plug before results are achieved. In short, they need to accept Lean as part of their overall operations and business strategies and support it all along the way.”
He also says that limited Lean success comes because “top management teams miss the point that Lean transforms an organization's culture -- and they don't want theirs transformed! Most productivity improvement programs, including Lean, result in enhanced communications, more empowered teams, and the positioning of decision making at the lowest possible levels.” Some managers are not ready to let this happen and hinder Lean initiatives.
Senior managers “must be willing to accept and even drive culture change. The top team must invest in the transformation process in terms of both time and money.
“The third reason that companies often fail to realize gains with Lean is because they don't have the right players in the right positions, especially at the line manager level. What's more, they don't support their team with strong training and development opportunities.”
Lean does not require major investments in capital equipment, in computer equipment and software. It does require training so that employees know how to implement the appropriate Lean tools. Senior management cannot expect to train a few project managers and foremen and realize broad Lean implementation. One does not do Lean to the employees but implements Lean with the employees.

Companies are made up of people. Their behavior determines the way the company behaves and grows. Senior managers need to be Lean leaders and champions to successfully implement Lean in their companies. Engaged employees are also needed (see article below) but they will not happen without Leaders.

Source: “Everybody's Jumping on the Lean Bandwagon, But Many Are Being Taken for a Ride, Rick Pay, IndustryWeek Inside Track, March 5, 2008

What Lean is and is not

Lately at several companies I have heard jokes made about how something that didn’t work right is Lean. The implication is that the company cut corners or bought something cheap to be Lean. Lean is not about being cheap. Lean is about adding value and reducing waste. The economic definition of Lean is the ratio of the usefulness of the product or service to its cost (usefulness/costs). By this equation, if something is broke or doesn’t function it is less useful and therefore value decreases. That is not Lean. There may be cases where a company (or individual) would purchase material or tool at a lower price because he cannot tell the difference in ‘usefulness’ between two choices. If that tool or part turns out to be less useful or defective, then, though the person tried to maintain some value level, he actually decreased it. He may also have caused additional waste in replacing the broken part or tool further reducing the value. This may have been done under the cause of being Lean but it certainly was not Lean. The next time you hear someone blame something on Lean, logic it through and correct the misunderstanding.

Needed – Engaged Employees

To sustain Lean in any organization, engaged employees are needed. These are employees who want to help the company improve and are looking for ways to do it. One indicator of how engaged employees are in an organization is the ratio of improvement ideas to the number of employees per year. Typically, in the USA we average one idea per every five employees per year. (That it takes five Americans to come up with one idea a year - sounds like a joke.) In Japan they typically receive five ideas per every employee per year. However, Toyota averages 80 ideas per employee per year! Since in construction we don’t always have the same people employed over a whole year, one construction company that I work with calculated their ratio based on total man-hours worked and found that they average 1 idea every 6.5 years per employee. When I worked at JB Rodgers Mechanical Contracting Company, we celebrated when we finally reached one idea per employee per year. What is your ratio? Do you have a way to capture employee’s improvement ideas?

Measuring ideas per employee is one indicator of engaged employees, but it is only an indicator. More important though harder to measure is how involved employees are in making Lean changes, regardless of where the idea came from. Jim Womack says these factors are needed to get employees engaged:

• Teach employees to see the process. All work is a process but few employees see their work as part of a value adding process.
• Give employees the problem solving PDCA skills. Lean is about experimenting on new ways to do something. While most of us solve problems many do not know how to systematically attack a problem, find the root cause and develop counter measures.
• Push responsibilities to the level of action. Processes run horizontal in a company but chain of command is almost always vertical. Senior managers usually only see symptoms of problems (customer complaints, late projects, etc.) while those on the front line, who see the real problems, have little power to change things.
• Use end-to end measures. Many times we use point measures and not end to end. For example one shop was measuring how fast they could run sheet metal through a machine. They wanted a newer one that ran much faster. It doesn’t matter how fast one tool is if it doesn’t speed up the whole time a fitting takes to be fabricated. Few shops measure the total time through the fabrication process.
• Create frequent problem solving loops. Give employees the opportunity to solve problems to improve the process.
• Make the abnormal immediately visible. We need to be able to see when things are off track so we can address them quickly. If there is a defect in welding, fabricating, or installation, the sooner we see it, the sooner everyone can help fix and then prevent it. By knowing the jobs to fabricate today or the work to install today, employees can see if they are on target or behind schedule.

FYI - Toyota role models this last point at the plant floor and also even at a corporate level. In their annual report they tell the top problems they are facing each year. This is not the threats but the internal problems they must address. Most companies would never share their problems in an annual report. Toyota feels that by sharing they are creating awareness with other partners and individuals that can help them solve problems. If they shared it only inside the company, it would leak out anyway, so they feel being open gives them an advantage. How do you share your biggest issues?

Source: Jim Womack, Webinar, May 1, 2008

Learning Opportunities

You may be interested in attending one of these training seminars:
June 2, 2008 – Lean Works in Construction, Oakland, CA – Sponsor: Bay Area SMACNA Chapter – contact Audrey Kerns at (510) 635-8212. Must be a SMACNA member to attend.
June 18, 2008 – Gaining Customer Loyalty by Design, Kansas City, MO – Sponsor: SMACNA- KC – Contact Sang 816-421-3360 ext. 112. Must be a SMACNA member to attend.
Nov 10, 2008 - Gaining Customer Loyalty by Design, Oakland, CA – Sponsor: Bay Area SMACNA Chapter – contact Audrey Kerns at (510) 635-8212. Must be a SMACNA member to attend.

Other Lean Learning Opportunities:
June 2-3, 2008 - P2SL & LCI Lean in the Public Sector, Berkeley CA.
June 4, 2008 – N. California Lean Coordinator’s Meeting, Doubletree Hotel & Executive Meeting Center Berkeley Marina, Berkeley, California, Contact Theresa L. Robinson at 916.554.7944
June 12-13, 2008 - LCI Design Forum: St. Louis, MO
June 30-July 2, 2008 - Introduction to Lean Construction - Texas Lean Construction Summit, College Station, TX
July 14 – 20, 2008 – International Group for Lean Construction (IGLC), Manchester, United Kingdom
July 17–18, 2008 - Lean and Green Summit, Boulder CO
October 28-31, 2008 - 10th Annual Lean Construction Congress, Boulder Colorado Sponsor: Lean Construction Institute

Two new articles by Dennis Sowards:
"Manufacturers Need to Look at Lean Construction" in Industry Week

"Implementing Lean In The Service World" in Plumbing and Mechanical

A Quick Thought

The measure of success is not whether you have a tough problem to deal with, but whether it's the same problem you had last year.
- John Foster Dulles (1888–1959)

For more information about Lean applications to construction and especially the 5S’s contact Dennis Sowards at his office at 480-835-1185 or his cell at 602-740-7271 or at his web site: www.YourQSS.com