Lean in High-Mix Low-Volume (HMLV) Manufacturing -- Does it Work?

Lean thinking and methodology have resulted in many organizations instituting powerful initiatives and gaining major improvements, but most still associate Lean principles with low-mix high-volume (LMHV) manufacturers. There are, however, a gamut of high-mix low-volume (HMLV) manufacturers that wonder if the power of Lean is really applicable to them given their very different factors regarding volume, variety, and scheduling.

I recently spoke with Shahrukh Irani – who actually just published a book entitled Job Shop Lean:  An Industrial Engineering Approach to Implementing Lean in High-Mix Low-Volume Production Systems – and asked him the very specific question: “How is Lean applicable in High-Mix Low-Volume (HMLV) manufacturing?” Here is his detailed answer: 

Of all high-mix low-volume (HMLV) manufacturers, a job shop has the most complex production system.  The classification of different production systems that is shown in Figure 1 provides the simplest evidence that forcing a job shop to adopt a production system and tools that were designed to improve a repetitive assembly line’s performance is like fitting a square peg into a round hole. 

Figure 1: Comparison of an Assembly Plant and a Custom Fabrication Job Shop

Currently, nearly every job shop has failed to realize the full gains from Lean because they have stopped at implementing only the Lean tools listed in the left-hand column of Table 1.  In contrast, the Lean tools in the right-hand column of Table 1 are ineffective, often inapplicable, in any job shop.  So how does any Lean job shop reap additional benefits from Lean?  By implementing a new “Job Shop Lean Toolbox” in which the Lean tools in the right-hand column of Table 1 have been replaced with other tools that were developed for job shops!  

Table 1: A New “Job Shop Lean Toolbox” for High-Mix Low-Volume Manufacturers

Lean tools that will work in job shops also

Lean Tools that will not work in job shops

Strategic Planning

Pencil-and-Paper Problem Solving

Top-Down Leadership

Value Stream Mapping

Gemba Walks by Managers

Assembly Line Balancing

Employee Engagement

One-Piece Flow Cells

Workplace Design with 6S

Product-specific Kanbans

TPM (Total Productive Maintenance)

FIFO Sequencing of Orders

Setup Reduction (SMED)

Pacemaker Scheduling

Error-Proofing (Poka-Yoke)

Inventory Supermarkets

Quality At Source

Work Order Release based on Pitch

Visual Workplace

Production based on Level Loading

Product and Process Standardization

Mixed Model Production with Takt Time

Right-sized Flexible Machines

Right-sized Inflexible Machines

Standard Work

Pull-based Production Scheduling

Continuous Problem-Solving

Manual Scheduling with Whiteboards


If the Tool Works for High-Mix Low-Volume, Then Job Shop Lean Uses It!

In Table 1, the tools in the left-hand column will also work in HMLV production systems.  Top-down Leadership” and “Employee Involvement” are essential.  “Standard Work Instructions” and “Setup Reduction” are needed to minimize variation in setup times on any machine (or manufacturing cell) due to different parts having varying setup sequences, tooling packages, material sizes, tolerances, etc.  “Quality at Source” empowers employees to reduce costs, take pride in their workmanship and have ownership for their work.   “Right-sized Machines” appears in both columns of Table 1 because simple machines are easy to learn to use, setup, operate and maintain.    

If the Tool Does Not Work for High-Mix Low-Volume, Then Job Shop Lean Replaces It!

In Table 1, the tools in the right-hand column will almost never work in HMLV production systems because those tools are simply not applicable to MTO (Make-To-Order) HMLV production systems that do not operate like assembly lines.  It is these tools that have been replaced by a more effective set of tools, often enabled by software, to successfully implement Job Shop Lean.

What do you think of Shahrukh's observations? What are the experiences of those who work in a HMLV environment and have been part of a Lean initiative?


Becoming a New Supervisor -- What are the Challenges?

During May, Hugh Alley published a book that introduces the central skills that any supervisor must master with, at least, a basic working competency: instructing, leading, and making improvements in their own area. It is entitled Becoming the Supervisor
Achieving Your Company's Mission and Building Your Team, and it presents some of the more widely used tools that a new supervisor may need. More importantly, it ties these tools and skills to solving particular problems.

I spoke with Hugh this month and asked him: “What are the common mistakes many new supervisors make?” Here is his complete response:

I’d say that there are three common mistakes among new supervisors.

First, they are not clear enough with their employees when they assign work. They’ll describe what need to be done, but they’ll skip over the details of how the work is to be done. These details are what set the orders apart, and they are where the mistakes happen. You need to go over them with your employee. And you need a conversation about how long the work will take. When that happens, both supervisor and worker can agree, and the supervisor’s stress goes down.

Second, they act without thinking through a situation when something is amiss. Usually that’s because they don’t have a structured way to approach this sort of problem. In the book, Julie, the GM, introduces Trevor, the young supervisor to the Job Relations approach, which gives a nice structured way to think about any situation. I’ve seen team leads charging across the floor to “deal with” someone stop in their tracks and reconsider when they remember the steps of the Job Relations program. It’s very powerful.

Third, they don’t pay enough attention to standard work. They don’t make sure that people are using the best way to do a job that the organization currently knows. That consistency will typically increase productivity by 10%. The best route to that is a good job breakdown, and the concepts of the Job Instruction module from Training Within Industry are very helpful here. In the book, Trevor learns how to do this, and it solves several problems. I’ve seen it reduce the time to get new staff up to speed from three months down to one month.

If new supervisors can get those three skills nailed, they’ll be much better off. From there, they can learn all the other skills. 

What is the quality of the leadership training within your organization? Do you agree with Hugh's assessment of common mistakes by new supervisors? Has your company experienced the benefits of a training within industry (TWI) program?


The "Blendification" of Your Organization's Culture, Strategy, and Execution

Early in June, Dan Bruder published an exciting new book entitled, The Blendification System: Activating Potential by Connecting Culture, Strategy, and ExecutionBy focusing on the unifying purpose within each organization, this book promotes alignment between leadership and employees setting a clear, strong foundation in which every individual can thrive.

During a recent conversation with Dan, I asked him a series of questions about the book and the connection between employees, customers, and communities. Here are the important questions followed by Dan's answers:

What is the connection between culture, strategy, and execution and why are most companies not embracing it?”

Companies are at the forefront of fostering growth within society and communities. In the US, adults spend over 50% of their waking time in work- or work-related activities.  Work is where people come together on a regular basis with the primary purpose of identifying and satisfying society’s needs.  For companies to realize their potential, they must break away from the model of oversimplification and internal silos. Human beings can accomplish tremendous outcomes when motivated, challenged, and connected.  Unfortunately, business has diminished employee motivation by relegating people to functional silos and meaningless task-oriented behaviors.

"Why aren’t companies embracing the connection between culture, strategy, and execution?"

There are three primary components that are critical for organizations to realize their potential.  They are culture, strategy, and execution.  Historically, there has been little intentionality around designing an exceptional culture while strategy has been something the executive elite do every year or two and it typically is not cascaded through the organization.  Similarly, execution has not been embedded in the culture or aligned with the strategy and employees do not see how their jobs make a difference. Generally, there has been little focus on deliberately designing culture, strategy, and execution as a connected system where each complement and complete the other.  This is primarily related to executive leaders and founders not fully grasping the potential of a united team and their ability to truly make a difference.  Essentially, it is easier to pursue profit than potential.

"Why should companies embrace the connection between culture, strategy, and execution?"

Culture, strategy, and execution are seamlessly designed and implemented together in The Blendification® System.   When these three business components are purposefully created and connected, companies experience substantial growth in engagement, innovation, and outcomes.  As the entire company aligns on a common cultural cause, the strategic platform becomes the path for employees to realize their human potential.  Finally, the execution of the strategic platform enables employees to align their work with making a positive impact on their communities.  Thus, the systematic blending of culture, strategy, and execution enables companies to be at the forefront of advancing society through their employees, customers, and communities.

What do you think of Dan's ideas? Does your company suffer from disconnects among the culture, strategy, and execution platform? 


Can Lean and Agile Techniques Be Applied to Sales?

In April, I had the opportunity to speak with Brad Jeavons shortly before the publication of his new book, Agile Sales: Delivering Customer Journeys of Value and Delight. Brad's book is the first to address incorporating enterprise excellence (Agile/Lean) into sales. Organizational excellence journeys have not included sales teams up until now. Brad's book provides a proven step-by-step approach for integrating Agile/Lean practices into sales to amplify customer experience and sales-team performance. The book contains many case examples from companies achieving amazing results from integrating agile into their sales teams.

During our conversation, I asked Brad what results have been achieved by applying Agile/Lean techniques for sales. Here is his response:

The best example I have seen is a retailer rocketing from 0% sales growth year on year to a growth of 70% year on year. I have seen sales teams in a highly commoditized market elevate their approach and bring value back into their dealings with customers. They went from 2% growth year on year to over 15% year on year with a 10% elevation in gross margin. The results are amazing and speak for themselves. My book Agile Sales provides good detail to help an organization bring agile into their sales team and optimize their results.

In addition, I followed up with: Why does Agile/Lean work well in sales teams similarly to operational teams? 

Agile and Lean philosophies share many common beliefs, tools and techniques. They both help people to collaborate, innovate, and amplify performance. The role that people are working in does not matter; people are people in operations as they are in sales. The Agile and Lean approaches to excellence are proven to help in sales as much as operations. Agile lends itself to sales as it evolved through major global technology organizations adopting more office-based practices. I made this connection several years ago after initially learning and applying Lean practices. I moved into an executive role within the organization I was working and started to work with my sales leaders and team members to apply Agile/Lean techniques. The results we saw were amazing. I genuinely believe that Agile can help a sales team optimize their results.

Throughout the book, I give this evidence -- analyzing many successful organizations that have applied Agile/Lean techniques to their sales teams and customer engagement approaches. I describe how all levels of an organisation can sustain their energy and effort on their key customers, how they can focus on what is most important and establish a culture of continuous improvement, innovation, and ultimately, performance.  Agile Sales provides many practical examples of how agile concepts have amplified customer experience and sales team performance. I have worked to make it easy for the reader to take the learnings and apply them to their organization.

The current environment requires us to think differently and pivot for future success. Agile Sales is a must-read for anyone directly involved in or leading sales teams. It provides ideas to help sales teams get back in the game, deliver greater value and delight and amplify performance and results.

Sales improvements will help organizations survive and thrive for the future, which may prove more vital than purely operational improvements.

What do you think of Brad's perspective? Have your sales teams applied any Agile or Lean techniques? What have the results been? 


Why is Lean Needed in Higher Education?

A few days before William Balzer published the second edition of his groundbreaking book Lean Higher Education: Increasing the Value and Performance of University Processes, I had a chat with him about the successful applications of Lean concepts at major universities. During the conversation, I asked him directly: "Why is Lean needed in higher education?” Here is his complete answer:

Lean provides a proven problem-solving framework to address challenges in any organization or business sector, and higher education is no exception. Universities must be more responsive, efficient, and effective to address the growing number of external challenges disrupting higher education including: 

  • Eroding financial support from the government coupled with freezes or caps on cost increases.
  • Rising costs at universities to maintain their educational mission coupled to the growing price sensitivity of students and families worried about the long-term burden of student loan debt.
  • Attracting and retaining the best faculty and staff in a labor-intensive operations where we have not resolved how equitable compensation increases can be offset with gains in productivity.
  • Greater competition such as online universities and free Massively Open Online Courses that compete for a shrinking demographic of college-aged students and employers who question whether a college education is really the best preparation. 

As we speak, COVID-19 is already sending shock waves through the higher education community.

The application of Lean to improve processes in higher education, grounded in the principles of continuous improvement and respect for people, offers a way forward, as documented in my book by 16 exemplar universities from around the world that are using Lean. When correctly implemented, practiced, and sustained, Lean Higher Education (LHE) will meet – and even exceed – the expectations of those served by these processes, engage and develop university faculty and staff who deliver critical academic and support processes (including teaching, curriculum development, and research), and enhance the efficiency and effectiveness of the university through cost avoidance, cost reduction, and greater revenue generation. 

The potential of LHE is great at any university regardless of mission, size, and resources; in the 10 years since the publication of the first edition of Lean Higher Education, LHE has demonstrated that it can help universities reinvent themselves to earn or grow their reputations as preeminent institutions that should be valued and supported. 

Are any readers affiliated with universities or colleges that have implemented some type of Lean initiative?  Have you experienced the benefits that William Balzer described? 


Why are Leadership-Development Efforts Relatively Ineffective?

Michael Couch and Richard Citrin recently published an important new book entitled Strategy-Driven Leadership:The Playbook for Developing Your Next Generation of Leaders. This book places business strategy first and maintains an emphasis on building leadership programs around what it will take to make the business successful as opposed to implementing a program in the hopes that it will benefit the strategy.

I spoke with Michael and Richard this month and asked them: “Given that most organizations spend significant resources on developing their leaders, why are most leadership-development efforts relatively ineffective in the long run?”

Here is their complete answer:

In Strategy-Driven Leadership, we cite several factors related to the ineffectiveness of most leadership development initiatives. Let’s discuss three of the most critical factors.

First of all, many approaches to leadership development ignore context. By this we mean that any development initiative must be built from a strong and clear strategic or business case. Designing effective development starts with the question, “Why exactly are we doing this?” -- so that the intended business impact of any investment in development is established at the get go. We call this “framing” the development.

Related to context, a second factor that is important to the effectiveness of leadership development is to have learners understand and focus on leadership competencies that are directly linked to the strategy of the business.  Strategies vary across organizations and the strategy of an individual business can change over time. For development to make a difference, strategy must be translated into the unique skills required of leaders to execute the strategy.

Third, organizations often take a one-size-fits-all approach to developing their leaders by buying an off-the-shelf program and requiring all leaders to attend the training. You’ll see this kind of program something like “these 5 factors are essential for every leader to possess.” This approach is seldom effective because it ignores the fact that the development needs of individual leaders vary greatly. There’s just no way that a single program can address those diverse needs. In addition, and probably more importantly, critical leadership competencies cannot be learned in a classroom. Real leadership skill-building occurs through navigating and learning from a challenging job or assignment. Our model for developing strategy-critical leadership skills, called Intentional Leadership Development, capitalizes on learning from experience so that development is built into everyday work and not bolted on as something extra to do.

What do you think of Michael and Richard's views on leadership development? Has leadership development been successful in your company?