Many companies spend months, if not years, implementing Lean tools and approaches. In too many cases, they don’t achieve their objectives and the Lean effort slowly fades away. I often get calls from concerned executives who say, “We’ve been doing Lean for three years now and we aren’t making any more money. Should we be making more money?”
Many companies that try Lean are unhappy with their results. With the plethora of MEPs, Lean consultants and books about Lean, why is the success rate so low?
There’s a significant difference between doing Lean and being Lean. Doing Lean includes the tactical activities of training, implementing tools, shop floor and warehouse improvement projects, Kaizen events, and score keeping. Often those activities are assisted or driven by tactical Lean consultants who train, lead events, or help redesign work centers. But if those activities aren’t driven by your operations strategy and company vision, there’s no alignment with your business objectives. Ground-level activities aren’t enough to meet business goals and keep executives interested. When priorities change, the mid-level managers tasked with driving Lean efforts are pulled away to work on new projects.
A Lean Context
Being Lean creates the context within which improvement activities occur. Being Lean provides a strategy for improvement efforts, which helps select and prioritize activities that produce the most meaningful results. Being Lean changes the way products are designed, includes partnerships, eliminates unnecessary processes and activities, and changes the culture of the company. Being Lean provides breakthrough results.
An example is the implementation of a Kanban system. Kanban is a signal or trigger to do something, often associated with the movement and acquisition of materials and helps achieve flow, a key component of Lean. In the doing environment of Lean, safety stock and minimum order quantities are included in the Kanban size calculation, and, at least initially, should be. But safety stock is a waste, and minimum order quantities (MOQ) optimize supplier performance at the expense of your company’s performance.
If you’re doing Lean, once the calculation is set, the system is set in motion, but safety stock and MOQs continue to impact overall performance. If you’re being Lean, the operations strategy aligns with the company vision, priorities are clear, and the company culture drives behavior and is reinforced. Being Lean fosters the relationships and culture that minimize or eliminate things like safety stock and MOQs, allowing you to achieve breakthrough results including inventory turns over 12, 99.8% customer service levels, 20% annual materials cost reductions and more.
The Starting Line
Set a company vision that describes where you want to be in the next two to three years (this is often referred to as the future state.) The next step is having a clear understanding of where you are now, also known as the current state. Then select a strategy to reach your vision, such as being the high quality producer, being the low cost producer, being able to provide customized products, delivering with very short lead-times, or being innovative. Many companies try to do all of those, but you only get two. That’s a topic for another day.
Implementing the strategy is where the rubber hits the road and (unfortunately) is often where strategy falls apart. The best strategy, if poorly implemented, causes chaos. Change is hard, and having the right process for change is key to success.
Being Lean drives successful implementation; doing Lean is only the tactical part of the process. The key to breakthrough results is to align the operations strategy with the company vision, then plan how and where Lean fits. Doing Lean is like rearranging the deck chairs just before the ship sinks. Being Lean is strategic and helps achieve your goals.
© 2016 – Rick Pay – All Rights Reserved