Any business professional who reads the
newspaper, watches the news, or pays attention to industry trends is
familiar with lean manufacturing and its great success for companies that
dedicate themselves to improvement. Conversely, you can find companies that
did not implement lean or continuous improvement strategies and have since
either gone out of business or moved overseas. And while it is true that
implementation of lean manufacturing can generate huge savings and help
companies reduce cost, executives often get confused thinking “lean” is the
entire process when, in reality, it is only one tool to become a better
company.
In the
beginning…
Many companies talk about and even begin implementing programs such
as Kaizen, Andon, 5S, Standardized Work, or 6 Sigma and feel they are taking
the necessary steps to become more profitable. Each of these tools is
designed to do something different and executives must understand what tool
is needed to fix a specific problem or situation. A great example of this
can be seen with executives who try to copy the Toyota Production System.
They focus on production, because quite frankly, the name leads you to
believe that TPS is a production model rather than a total operations
improvement model – this is where things quickly begin to fall apart! The
truth is that each program is just a tool available in the overall
operations improvement toolbox.
In our operations improvement work, we focus on
transformation utilizing the Operations Transformation Model (OTM). So how
does a company transform itself to survive in this competitive environment?
To transform an operation really requires four fundamental steps. Each of
these steps has numerous tentacles that are required for success.
I. Leadership’s Admission – it should go
without saying but…
The first and probably most important step in transformation is leadership’s
admission that change must occur within the company and that a commitment to
this change is essential. It’s no different than the alcoholic who can only
begin to change once admitting to have a problem. Companies in this country
have become, in some instances, arrogant and unaccepting of change. Many of
today’s current leaders were fortunate enough to live through the glory days
of growing industry and high profits and have been spoiled by this culture.
I believe many companies today, because of events of the distant past, have
become too complacent and now that things are changing, they are falling
behind very quickly.
Operations improvement or lean initiatives
never can be successful without leadership commitment from the top. This is
a very simple lesson that should probably go without saying, but it is a
common mistake made in the majority of facilities failing at their
improvement efforts. There are many examples even within companies like GM
where business operating systems failed over and over again because
leadership support did not exist. In most cases, once the leadership team
was on board, admitted to the problem, and committed itself to change,
progress happened more rapidly.
II. Setting the State of Improvement
With leadership commitment, the real work begins at developing an
improvement / business plan. This is a crucial step in the entire process,
yet time and time again, executives fail to plan and inappropriately set off
on their improvement journey without a true destination in sight.
Another common mistake is the lack of a
benchmark established upfront. Companies often fail to gather the
appropriate data to establish baselines, making it literally impossible to
measure changes in performance. Data gathering/benchmarking is a difficult
but absolutely essential step to any successful improvement effort. Once the
data is gathered and improvement goals are created, the leadership team must
work on the development of tools and systems to regularly track data to the
plan. The tools developed must be used and used consistently to begin to see
progress. Leadership and middle management must utilize the tools to drive
the business plan. It takes discipline and hard work to stay focused and not
stray from the plan. Again, leadership commitment is critical to drive the
team to the vision rather than towards the fire that needs extinguishing
today.
A great example of this stage is a $100 million
stamper in Michigan who struggled for years to improve using every new
program read about in a lean book, but without any plan or vision for the
company. Employees were confused - never knowing what would be the next
“program of the month”. Finally with formal development of a plan, data
gathered to baseline the operation, leadership coaching, and discipline to
drive the plan, the company made 45 percent productivity improvements, 77
percent improvement to quality, and grew its business 25 percent – all in
one year.
III. Return on Investment
Once the improvement focus is engrained in leadership with proper plans and
benchmarks, companies can implement tools of good process improvement. New
ideas can be used in experimentation, low hanging fruit can be identified,
and savings will start to hit the bottom line. This might mean accessing
improvement tools such as 5 S, standardized work, or total productive
maintenance on the shop floor. But be very aware, it also might mean value
stream mapping a payroll system or implementing better vendor management
strategies. For example, a service firm in Michigan with over 200 employees
struggled with bi-monthly payroll, taking over 55 hours to complete each
cycle. Following its vision to improve efficiency at all levels, the
company used value stream mapping to document the payroll process and even
did time studies at each step. This provided the necessary information to
begin process improvements and after two months, the company reduced payroll
processing time to five hours per cycle.
The key to transforming is training the
workforce on the available tools, when to use them, and how to measure
progress. Companies must invest in teaching and coaching their employees on
how to recognize improvement opportunities and how to solve problems
effectively. Once people have the basic skills and are turned loose,
leadership teams are often surprised at the savings that can be found.
Leadership has to coach and allow for mistakes in this stage so that the
lessons learned can be incorporated and operations transformed.
IV. Don’t Settle for Impact in the First
Improvement Attempt
The last part of the process is simple: continuous improvement. Many
companies have told me they are as good as they can be and can’t do anything
else to improve their operations. But after visiting many of these plants
and observing the business, it doesn’t take long to find numerous areas of
opportunity. Sometimes small to mid sized firms (and even large companies)
get too caught up in the day to day fire fighting to see the real
opportunity. And that’s not a pitch for consultants; it is a pitch for
continuous improvement. Everyone from leadership to the shop floor must be
trained and have a passion for continuous improvement to transform the
company.
Even Toyota, who is arguably the manufacturing
leader, is constantly challenging the Toyota Production System and improving
on its beginning. Leaders need to continually ask the question – how can we
do it better? I liken it to a sports team – without the right coach
constantly pushing his team to be better, the team wouldn’t be playoff
contenders. Companies and employees are no different; to constantly be
competitive we have to – daily - push to transform.
So lean manufacturing or operations
transformation? Companies that react quickly and implement a total
operations transformation are the ones that will be standing when the dust
settles. And what is transformation? TRANSFORMATION = LEADERSHIP. It starts
there and it ends there.
Laurie Harbour-Felax is president of
Harbour-Felax Group. She is a regular presenter at key conferences on the
topics of manufacturing and overall business operations improvement and is
regularly quoted in local and national publications as an experienced
analyst. Harbour-Felax can be reached by calling (248) 414-3866, e-mailing
[email protected], or visit www.harbourfelax.com for more information.
Lean
Manufacturing Training Programs
The University of Kentucky and the
University of Michigan offer formal training programs in lean manufacturing.
University of Kentucky
www.mfg.uky.edu/lean/
Sandra Dunn
(859) 257-6262 ext. 214
The University of Kentucky’s Center for
Manufacturing in the College of Engineering has a Lean Systems program in
place. Working in partnership with Toyota Motor Corporation, the team
studies the Toyota Production System to learn why it works as effectively as
it does. Based on that research, the university offers training programs at
several levels, including Leadership Institutes, Fast Courses, and an
intense Boot Camp. Go beyond the surface with courses on Lean Accounting and
Human Resources for the Lean Model. Learn how to transform the shop floor.
Make sure the entire company is on board by exploring the principles of lean
thinking. Learn how to apply lean tools and techniques in a unique hands-on
system simulation and learn to champion and firmly plant lean ideals within
a business unit. On-site courses and workshops also are available.
University of
Michigan
http://cpd.engin.umich.edu
Becky Erskine
(734) 615-5698
The University of Michigan’s Center for
Professional Development develops and delivers programs and services that
enable engineers, managers, and technical professionals to be more
effective, productive, and competitive. Course participants walk away with
immediately applicable knowledge and proven tools based on research
performed by the world-renowned faculty at the University of Michigan’s
College of Engineering. Course offerings include a Lean Manufacturing
ten-day certificate program, a Lean Product Process Development five-day
certificate program, a Lean Office five-day certificate program, a Lean
Logistics ten-day certificate program, and on-line Six Sigma certificate
training. Any of the programs offered by the Center for Professional
Development can be customized and delivered at a company’s site. |