The Next Level of Lean
A few years ago, lean manufacturing was considered something that applied only to automotive companies and their suppliers. Other companies generally believed their cases were very different and that lean thinking would not apply. Today, however, it is very rare to find a company that does not have some Lean or Lean Six Sigma program.
The reasons for adopting these improvement programs are many. They usually include the inevitable need to excel in all three dimensions: quality, cost and delivery, as well as the importance of staying ahead of competitors. These are all good reasons. I am optimistic about the ability of the people implementing lean principles to make improvements, but some trends give me cause for concern.
Generalizing a bit, lean efforts in most companies are typically characterized by these activities. First, actions are focused mainly on deploying lean tools. Second, efforts are usually based within a single-plant setting. And third, there is a special group in charge of implementing the program. While this is a good start and will help companies improve, I fear it is not enough for them to reach the next level of operations performance. Based on Toyota's work experience in Japan, firms need to strive to achieve more. Here is why.
I frequently observe that lean programs are organized around lean tools. These companies regularly audit their use, such as 5S, SMED, Standardized Work, Kanban, Value Stream Mapping, among others, using formal assessment mechanisms.
Although this may sound counterintuitive, deploying lean tools can be very problematic. The reason is that we fall in love with them and forget their purpose. A more appropriate name for “tools” might be “countermeasures,” as they are called at Toyota. Lean tools are countermeasures to be used to solve specific problems and drive improvements. SMED was not invented for the sake of using the tool. It was developed because Toyota needed to change over its stamping presses more frequently in order to achieve the right mix of components downstream for the welding and assembly line processes, and to increase available production time on the machines. In other words, it solved a problem the company was facing at that moment. I always advise companies to discourage the use of tools as a mere numbers show and to emphasize the need to solve specific productivity, quality or delivery problems. In the long run, I guarantee you will get far more benefits.
A second trend is that efforts tend to be focused solely within a single plant. In days when facilities were highly integrated, this would not be a problem. But today's supply chains are more diversified, and most components come from outside. In this case, where value is coming from outside resources, the most critical aspect of operations for analysis and improvement is usually the quality, material and information flow of these delivered items.
More than once I have visited plants with significant problems in managing the inventory of purchased components and poor delivery performance to the customer. Instead, the lean efforts were focused on building flexible “U”-shaped work cells or internal material routes using kanban. Again, there is nothing wrong with using these tools, but if the supply of components is not always available, then the cells and routes will not work as they should. Toyota realized the importance of managing supplier and incoming material quality in the early 1970s, and created a special task force to improve supplier performance and the delivery of materials to the final assembly line. If your business is highly dependent on the quality and delivery time of the materials supply, then I suggest you focus on improving that area.
Finally, to develop a sustainable lean transformation, develop your people. Most companies have a special group of people known as “lean change agents” tasked with implementing lean. It is necessary, of course, to have dedicated resources to start the program and sustain it. But these groups must not fall into the trap of making improvements happen for the plant managers. Long-term success and sustaining the gains only occur when the local management team and the production employees who control the actual process are the people driving the improvements. At Toyota there is a Japanese saying, “mono zukuri wa hito zukuri.” Roughly translated, it means that to make things, you first have to make people. In lean efforts, we cannot forget that ultimately the system is only as strong as the people who support it, and we must not cut this development process short.
Portuguese translation by Diogo Kosaka.
