Defining "The Lean Way"
This blog is mostly aimed at those who are not in Manufacturing or who have little previous experience with "Lean"
I wanted to remove “System” because...the Lean Way really isn’t that mechanical and formulaic.
Much has been written to attempt to succinctly describe what has been called the Toyota Production System, Lean Manufacturing, or The Toyota Way. You may ask, “Why do I call it ‘The Lean Way’ in the title,” or “Why do we need yet another term for it?” I have several reasons, in no particular order. I wanted to remove “Toyota” so that non-automotive manufacturers would, perhaps, not dismiss it as something that does not apply to them. I removed “Manufacturing” and “Production” in hopes that non-manufacturing businesses wouldn’t dismiss it as applicable only to industry. I chose to remove “System” because, while that term markets well to accountants and engineers in manufacturing, the Lean Way really isn’t that mechanical and formulaic. Finally, I wanted the word “Way” to be in there to convey that it is inspirational so that non-profits would, hopefully, be more drawn to it. It is a path of Operational Excellence that can work for any organization.
So I give you a working definition of The Lean Way:
A leadership, human development, and operating philosophy that highly values the identification and systematic elimination of problems via a culture that engages all people (in identification & elimination of problems), resulting in true continuous improvement.
Let’s explore some important words in this definition. The first is philosophy. That is because The Lean Way starts with management thinking. This is where most organizations take a wrong fork early in the path on their Lean Journey. Many begin with the implementation of methodologies, which is akin to solving Toyota’s problems in your business…it rarely works sustain-ably. Some companies attempt to use lean methodologies to achieve short-term financial results. This often works…initially. However, if it isn’t quickly followed up with comprehensive coaching to adjust how every person in the organization thinks, beginning with executive leadership, the results usually will not sustain. The technical changes always happen faster than the cognitive changes and they are only about 20% of the work that is required. It is a mistake to think the work is done when the physical changes are complete. At that point, the hard (and long-lasting) work is only getting started.
Next, we need to understand the systematic elimination of problems. I’ll go into greater detail on this subject in future blogs because it is at the heart of The Lean Way. What follows here will be somewhat superficial. Here is an example of what it is not: an important customer calls and is angry because his order that was due yesterday has not arrived. We scramble to get it produced, organized and delivered today. This is where a great number of organizations stop their problem-solving efforts. On to fight the next fire! Problem solved, right? Wrong!
Why was the order late? Has this happened before? When has it happened? Under what conditions? We need to completely define when/ how/ where/ to whom/ why the problem is and is not happening. Then we need to do a root cause analysis to find the cause of the problem. Then we need to eliminate the cause. Then we need to validate that our countermeasure was effective. Then we need to error-proof and standardize the process so that it is impossible for the problem to happen again. Then we need to read-across the solution to similar situations in other areas of the business to ensure we have fully leveraged the problem-solving effort. Finally, we need to reflect on the total effort and determine how we could problem-solve better the next time. Only then have we systematically solved the problem.
Sound like a lot of work? Is continuing to live with your problems (scrap, rework, excess inventory, premium freight, customer penalties, lost business, expediting, unplanned changeovers) a lot of work?
Sound like a lot of work? Is continuing to live with your problems (scrap, rework, excess inventory, premium freight, customer penalties, lost business, limited revenue growth, expediting, unplanned changeovers, repeat problems, low productivity) a lot of work?
By the way, with my use of the word “systematically,” some may be thinking, “Hey Aaron, I thought you said there are no systems in Lean!” No, I said Lean is not a System, but a philosophy. But it is a philosophy that will drive you to implement many systems!
Speaking of Problems, what is the definition of a problem?
A Problem is a deviation from a Standard.
What is a Standard?
A Standard is a challenging Target Condition that we cannot always achieve.
See how beautiful that is? If I set Standards this way (initially, Standards should be achievable about 70% of the time), we are guaranteed to be identifying problems, which we can then eliminate! What happens when we have eliminated so many Problems that we are hitting the Standard most of the time, say 95% of the time? We change the Standard. This ensures a constant march toward perfection via Problem-Solving resulting in continuous improvement.
This next question I get all the time: “Won’t people get discouraged because they never get to the point where they are always meeting the Standard?” The answer: “It depends on your leadership.” A traditional leader who has the expectation that employees always hit Targets and blames them when they don’t will cause a great amount of discouragement if they do not change their thinking, expectations, and actions. However, a leader operating under The Lean Way philosophy operates under a different set of assumptions. The first assumption is that if an employee does not meet the standard, there must be something that the leader did not provide that the employee needs.
Instead of blaming, the leader will begin asking questions to determine what it is that she needs to provide the employee so that the employee can achieve the Standard in the future. We call this being hard on the process and easy on the people. When she finds out what is needed, she will provide it expeditiously because she knows that her performance results depend on that employee meeting his Standard. She will learn that it is important to check frequently to see if the Standard is being met…not to micromanage the employee, but to ensure the employee has what he needs. She will do this personally. We’d like to think this is what leaders normally do in businesses, but my experience is that it is quite rare.
The employee will know that his work is important because (a) his manager is checking frequently and personally, and (b) when he needs something to do his job, his manager provides it promptly. His performance and engagement will improve as a result and he will be more satisfied as an employee. He will begin to proactively bring to the manager’s attention ideas for improvement because he knows she will listen to him.
What you want to ask of your people is to think and to solve problems systematically, not to continuously improve.
Finally, a couple of thoughts about continuous improvement. First, note that continuous improvement is a result of the Lean Way and not the objective. The objective is the development of right thinking and problem-solving. If done correctly, continuous improvement will result. What you want to ask of your people is to think and to solve problems systematically, not to continuously improve.
If you remember back to your high school algebra classes, you learned the difference between discrete and continuous functions (see Figure 1). Discrete functions have a discrete number of points while a continuous function has an infinite number of points. Yet many organizations define their continuous improvement program by a series of discrete kaizen events. An organization cannot achieve a culture of continuous improvement that way, many more change points are needed…infinitely more! It requires a different way of thinking about every event (not just kaizen events) and every human interaction that occurs and relentlessly leveraging them toward change in the desired direction. In that environment, Kaizen events can be one of many tools that help, but continuous improvement cannot be created through Kaizen events alone.
The thinking that is needed centers around the elimination of waste, the creation of the flow of value, and the elimination of problems in a systematic way. When an organization learns to do this in every event and every human interaction, continuous improvement is achievable. Toyota isn’t perfect, but it is the best example I know. In 1997, the roughly 7000 employees in Toyota’s Georgetown, KY plant generated around 77,000 improvement suggestions that were implemented (many more were suggested). That is nowhere near “continuous” improvement, but it is far beyond what most organizations do, and it cannot be achieved by merely hanging a suggestion box in the break room. Think where your organization would be with 11 high-quality improvements implemented by every single employee every year!
If you work in manufacturing and have a lot of experience with Lean, I hope I have convinced you to at least consider that Lean is more about how you think than what you do. If you have heard about Lean before and always thought it was only for manufacturing, I hope you can see how it could apply to any business, or any organization for that matter. For everyone, my hope is that you can see how this philosophy is the best way to think about how to run an organization, how to improve it, how to develop people, and how to gain their engagement to drive improvement.
Well on your way in a Lean Journey, but bogged down and having difficulty sustaining and gaining engagement? Excited about getting started, but not sure where or how? Contact us! We will set up a free initial consultation to determine the best combination of Coaching and Consulting for your unique situation.