Supporting the Australian service industry
Roberto Priolo: What is the current situation of lean thinking in Australia?
Alister Lee: Lean thinking and practice have spread to most sectors of the Australian economy. The country's original strength in manufacturing has been declining in terms of jobs for many years, and this culminated in the departure of the automotive industry. Toyota was the last automaker to stop production on Australian soil, in October 2017 (in English), and this had a big impact on the lean movement - many people gained insights through visits and interactions with Toyota people. The upside is that we now have former Toyota employees spreading their knowledge to new businesses and sectors.
RP: What is Lean Enterprise Australia working on at the moment?
AL: Inevitably, our work reflects the transition from manufacturing to service industries - banks, insurance companies and, drawing on Denise Bennett's knowledge, healthcare and local government. For example, we are providing problem-solving coaching to senior and mid-level executives at Knox City Council, in Melbourne. Other sectors we are working in are food and beverage and mining.
We have started a collaboration with REA Group (in English), a digital company. We took part in the latest of their hack days (events aimed at generating creative ideas that benefit society), which had muda as its theme. The company has been a pioneer in agile practices, and we will be coaching its teams to develop their problem-solving and process improvement capabilities. It is an exciting project for us!
Another interesting trend is that more and more small and medium-sized companies are experimenting with lean thinking and practice. In our experience, they can make good progress, especially when they are supported by strong leadership. Working with small companies is very enjoyable: they are more flexible, free of so many bureaucratic and political constraints, and people tend to be more engaged. As many of them are going through their startup phase, I find them very open to accepting new ideas.
RP: What are the differences between manufacturing and the service sector when it comes to introducing lean thinking?
AL: It is a pleasure to prove more and more that lean principles work as well in services as they do in manufacturing. In fact, some of them work better: for example, seeing the flow of work is very difficult in the service industry, which usually means that visualizing the work and mapping the processes has a very big impact.
Another thing to keep in mind is the concept of customer value, which is slightly different in a service environment. We know that value is in the eye of the customer and that each customer values different things. That is why it is critical to spend some time understanding the customer and making improvements that have a positive impact on them. After all, in the service sector, we are not only designing our internal processes, but also the process the customer experiences. I believe there are excellent opportunities to advance lean thinking and practice in the sector.
RP: What is your background? Tell us about your career, please.
AL: For most of my career, I worked in the automotive industry. My first exposure to lean happened when I read “The Machine That Changed the World” on a plane, and I remember being intrigued, but skeptical. I was not sure whether the improvement and management methods developed by Toyota in Japan would work in Australia, where employees usually like to question management initiatives. Surely, I believed, that would make it harder for lean to take root. Now I think differently: questioning is a key element of lean!
The manufacturing company I worked for had Toyota as a customer. We were doing well in terms of quality and delivery, but they wanted us to reduce our costs. Eventually, we let them help us (reluctantly at first, I must admit), and they convinced me in the very first kaizen event they ran with us. They worked with one of our best-performing teams, and the many small improvements they made in a short space of time had a significant impact on the team's quality and results. That, for me, was the first time I really got a taste of lean thinking. That was when I realized the impact of bringing people together, finding ways to simplify the process and empowering the team to keep improving.
In 1998, I was transferred to the United States with the role of spreading lean principles and techniques across different plants. Working with teams all over the country and sharing our difficulties and successes was a fantastic learning experience for us. After a few years, I took on an operational role at a plant in North Carolina. In a way, I was thrown straight to the lions, since we had a major quality problem as soon as I joined the team, something that even threatened to stop our customers' production lines. Pressured by executives who were in firefighting mode, my team focused on finding the root cause of the problem. An intense problem-solving process got us through the crisis, but it was a career-threatening event that taught me never to jump to conclusions, no matter how urgent the situation is. During my time in the United States, I was lucky to have many great mentors who taught me the importance of developing people, something that served as my foundation when I returned to Australia as CEO of the company.
My time as CEO was a wonderful but intense experience. It was a great opportunity to lead engagement and improvement from the top. When I left the automotive industry in 2006, I took a year off and traveled all over Australia with my family, living under the stars. While I was in the Australian outbackTN, I had a lot of time to reflect and realized that I wanted to be a lean coach to develop people the way my mentors had developed me. And that is what I have been doing for the last 12 years. Initially, I did it on my own. I called my company “Lean Experience” (my wife joked that it was called “lean” because there was little money coming in). During my time working in the automotive sector, I developed a relationship with Peter Walsh, of Lean Enterprise Australia, and we began working together more frequently. Today, I run the institute with Denise Bennett, a true pioneer in taking lean into new environments (read her profile on Planet Lean here - in English).
RP: What is LEA's biggest challenge today?
AL: The challenge for us in Australia is to support and strengthen the lean community while we expand the application of the philosophy in the service area. Lean applies to knowledge work, and we need to become more relevant in the digital space and more aware of how much we can add to approaches such as the agile movement. There are many improvement methodologies that share similar principles and practices, and we are trying to build alliances with the people who use them (one example being our work with Nigel Dalton, of REA Group - in English). I think that, as a lean movement, we need to be more open to others and learn how they work. Whenever we do that, we immediately see the core lean ideas serving as a foundation for them!
EP: What are the benefits of being part of the Lean Global Network (LGN)?
AL: For me, it has to do with the ability to learn from others around the world, who have worked in all kinds of different environments. We are only just beginning to reach that potential with group activities such as the jishuken week we had in Poland.
For our institute, there is a great benefit in being part of a large non-profit organization. LGN's mission of sharing knowledge and learning from lean organizations around the world resonates very well with our customers.
TN: Outback refers to the remote and generally uninhabited regions of the Australian interior.
