The challenge with lean

Lean and the lean transformation is about people and culture. It’s important to develop leaders who thoroughly understand the system and lean, live the philosophy, and want teach it to others. AzmanL/E+

Lean is all encompassing. If a company that's operated in a very traditional way decides to implement lean initiatives, it needs to think in terms of total transformation of the operating practices. This requires a holistic approach.

It is not just implementing a lean tool here and there and hoping for the best. It needs to be all encompassing, yet most companies don't take that approach. They tend to look at implementation in bits and pieces. When they don't achieve success, they blame lean and believe that it won't work for them.

It’s all about finding the right approach and strategically moving through implementation. This should lead to a total transformation, not just random practices that don’t work towards a larger vision.

Many shops don’t look at the whole picture, the big picture. They opt to use tools, like 5S value stream mapping or others that fall under Toyota Production System (TPS). They dabble. Companies start with one aspect because they don't see the big picture. They may be successful in one aspect, like 5S on the shop floor, but eventually it will fizzle out because it doesn't have rooting in a larger system.

It’s not just about performing setup reduction or putting up visual controls. And while those can be important parts of a system, if a shop doesn’t get far into a holistic view, people give up and any movement forward goes away.

People give up on lean for several reasons. It’s not just because of the approach to implementation, but a change in leadership also can lead to scrapping any lean plans or initiatives. Oftentimes, the person who pushed for lean is its champion. If the company is lucky, there is more than one person who really understands it and wants to make it happen. But if that is not the case, if that person retires or leaves the company, then where does that leave the lean transformation?

Tell Tale Signs of Lean Journey Struggles

Excessive Scrap and Rework. One of the first signs that maybe a shop isn’t as lean as anticipated is when excess scrap and rework occurs. Rather than look for the root cause to analyzing why there was so much rework and scrap in the first place, some shops have a department where workers are paid bonuses to repair rejected parts.

Long Product Cycles. Another sign is overextended product cycles, where products that should only take two days end-to-end wind up taking two weeks. If you consider the standard end-to-end times, a shop may wonder what's going on. Well, products are not moving through the system the way they should.

High Obsolescence. A shop with parts laying around that have become obsolete is another indication of a faltering lean operation. A lot of manufacturers out there never throw anything away. It's so important to assess why parts or equipment are sitting idle or laying around and how to best deal with them, whether that is by throwing them out or finding another use for them.

Excess Machine Breakdowns. A machine that breaks down constantly is a good indicator that a shop should be doing more predictive maintenance and exploring root causes to habitual issues.

Some shops have way too much inventory on the shop floor, which can be wasteful and problematic when it comes to carrying costs and quality.AzmanL/E+

High Warranty Costs. High warranty costs can creep up on shops that manage to get a product out the door only to see it return three weeks later because of poor quality. Since this can be a big challenge, the focus needs to be on finding out pain points in the quality process.

Poor flexibility, Response Time to Change. A good manufacturer that has everything in place with lean and is utilizing the methods properly should be able to embrace change quickly and with fast turnaround. However, a shop with a faltering lean process will struggle with this. If a customer wants a change to a part, shops need to be flexible. That's what the lean transformation is all about. Manufacturing is moving towards more one-off operations and custom components at competitive costs to mass production. That means that shops need to find ways to get short cycle time, and fast, flexible turnaround.

Poor On-time Delivery Record. Many companies find themselves constantly behind. Usually shops have a monthly quota, they work month to month, and they need to fulfill that quota before the month ends. It may send out 10 per cent of its scheduled jobs in the first three weeks and the other 90 per cent the last week. When a shop is basically shoving product out the door at the end of the month to make quota, there's no balance.

Poor Communication Between Management and Shop Floor Personnel. It’s so important for management and shop floor workers to be on the same page. If management expects something, that should be effectively communicated across the company to ensure clarity. It’s also important for management to acknowledge employee concerns or else they may not get a full picture of what’s going on the shop floor.

Low Inventory Turnover. Some shops have way too much inventory on the shop floor, which can be wasteful and problematic when it comes to carrying costs and quality.

Areas of Opportunity

Opportunities exist for shops to optimize. Some organizations have developed questionnaires and audits. An effective audit includes roughly 15 principles for shops to self-evaluate; covers various parts of the organization that should be in a lean operating system; and is based on lean thinking, value stream flow, and pull techniques.

One of the first principles that is so important is the need for management to focus on long-term philosophy, even at the expense of short-term financial goals. If management is able to do this, it’s a good indicator that it can look at the big picture rather than just focus on immediate concerns. Shops need to have the mentality that successful lean implementation takes a very long time.

Toyota took upwards of 70 years to fully implement lean and they're still new at it in terms of continuous improvement. The company has spent decades developing methodologies and has continually optimized them as time has gone on. Shops need to understand the long-term nature of this process, and how certain methodologies and tools need to be tied back to an overall planning strategy.

To be effective at lean, shops need to be in it for the long haul and change the organizational operating practices rather than just add a tool here and there.

The second principle requires shops to create a continuous process flow to identify problems. Most lean management consulting firms only really start to evaluate a company’s processes when there is a need to improve. For example, management think its purchasing department has room for improvement, and rather than analyze the company as a whole, it focuses on the one department.

Applying value stream mapping will help determine how a company’s processes flow. This is a good starting point, but it’s important to look at the organization based on how it flows horizontally and not vertically. If a shop looks to improve vertically, it’s only improving one department, and that may slow down the process through other parts of the organization. It’s important to have a horizontal view.

The idea behind creating a continuous process flow is to reduce cycle time. If end-to end cycle time is three weeks, how can it be reduced to three days? How can they shorten that timeframe? From a flow perspective, shops have to contend with long setups, and there may be middle points stopping flow on the shop floor. Value stream mapping is one of the keys necessary to straighten out flow issues and streamline the whole situation. Value stream mapping for flow cannot be done just once because products change, customer requirements change, and other organizational aspects change. It's a tool that has to be used dynamically on a continual basis to maintain flow.

A third principle is the importance of building a culture where quality matters. It’s not about fixing problems when they arise but rather getting it right the first time. In 2022, in-process inspection should be the norm. No longer can shops get to the end of production and find out a product is out of specification or wrong. Quality at the source is essential. Shops need to give employees the proper training and an understanding of how to measure quality levels right at the source where the activity is taking place, which leads to error proofing. The goal is to limit workers making mistakes, employ error proofing, and avoid the mistake right from the beginning.

Developing leaders who thoroughly understand the system and lean, live the philosophy, and teach it to others is another important principle. Lean and the lean transformation is about people and culture. Training and helping to develop people into lean-conscious thinkers is essential. However, there is often no structured approach for training and growing employees. Training needs to be widespread and available for everyone. People grow when they are engaged and that’s why workers should be offered training to help upskill or reskill as well as broaden their mindset about what can and should be done.

A company going through a lean transformation that also becomes a training organization can make a huge difference for long-term success. Get more structured and budget for training.

The Reality of Implementation

There can be a disconnect between the ideal lean implementation and what actually happens on the shop floor. This can occur due to a lack of investment in appropriate training. Senior management needs to really engage with the principles and understand what a lean system approach is and their role in it. A lot of CEOs say they are practicing lean, but they couldn't tell you the first thing about it because they've downloaded the responsibility to other people in the company.

Management must lead the charge, by using some of these methodologies, like hoshin planning, that tie to the overall strategy. They also need to demonstrate that they are in it for the long haul.

It comes from the top, and the top has to be properly educated in the tools. Management can’t expect other people to use lean tools that they themselves don’t use or understand them.

Having a realistic lean transformation timeline is essential. Every company's a bit different in terms of the time required and it depends on a shop’s starting point.

Enacting standards is common when it come to the lean transformation. Standardization and standard operating process are the ways a shop works. Is there a standard, such as ISO, that could help standardize the lean practices already implemented in the shop? Not really.

A lot of businesses are trying to emulate TPS based on their own understanding, which may or may not be limited in scope. Having some sort of standard for lean could be very beneficial for companies interested in implementation.

When it come to tools and methodologies, there is an order that should be followed during the implementation process. First come the stabilization tools including value stream mapping, 5S, visual control, and standardization in general. Next are the flow tools like batch reduction, setup reduction, plant and office layout, air proofing, and total productive maintenance. And finally are the just-in-time (JIT) tools that fit into pull, kanban, point-of-view storage, level production, heijunka board, and cellular workstations.

These different types of tools affect how lean is pulled through the organization. If a company starts on a tool without first understanding how it will affect the big picture, it can be tough.

Shops tend to bounce around and try one thing and not another. But there is an intuitive order. A shop certainly shouldn't start a kanban system before exploring a flow tool, which gives a better outline and overview of how that JIT tool fits in the overall flow of the shop.

As another example, a shop should analyze flow first before performing any 5S exercises, such as outlining the floor to visually identify equipment and boundaries. Doing this before looking at flow could render the initial exercise useless. It’s important to understand how the tools work together and the necessary order of implementation.

William (Bill) Neeve is president of Cycle Time Management Inc., 525 Highland Rd. West, Suite 100, Kitchener, Ont. N2M 5P4, 226-747-7475, billneeve@leancycletime.com, leancycletime.com.