Developing Lean Processes -- What are the Common Mistakes?

Just this month, Matthew J. Zayko and Eric M. Ethington published about Lean process development entitled The Power of Process: A Story of Innovative Lean Process Development, which explores Lean Process Creation and teaches the specific frames -- the 6CON model -- to look through to properly design any new process while optimizing the value-creating resources. The framing is applicable to create any process that involves people, technology, or equipment—whether the application is in manufacturing, healthcare, services, retail, or other industries.  The result is 30% to 50% improvement in first-time quality, customer lead time, capital efficiency, labor productivity, and floorspace that could add up to millions of dollars saved per year. 

When I spoke with both authors earlier in the month, I asked them: "What are the common mistakes made when developing Lean processes?" Here is their full response:

Although every situation is unique, the three lean process development mistakes we see most often are:

Confusing Tools with Goals -- This is often rooted in not understanding the true purpose of the many Lean tools at one’s disposal, coupled with a poor grasp of the current state of the existing processes.  This results in a patchwork of “Lean stuff” stitched together – a veritable Frankenstein of a process.  First, understand your situation (CONtext) and then apply the right tools at the right time to learn what you need to know.

Losing Sight of Targets -- New projects most likely have a business case.  Done properly, this business case is based on assumptions that have been documented.  These might include a particular margin level, production rates, volumes – and the list goes on.  Likewise, these assumptions are calculated from a variety of other expectations such as cycle times, process uptime, projected yields, and material costs.  Once the money is approved, progress towards some of the high-level metrics is sometimes tracked, but often the more basic expectations that fed the calculations get lost.  Additionally, these assumptions are rarely translated into metrics that make sense to the project teams earlier and earlier in the development process.  End-state targets need to be translated backward to meaningful targets at key points, earlier and earlier, in the development process.  What does a final target of 15% margin look like to someone who is developing early process concepts?

Treating Development as an Event instead of a Process --  It is amazing what a properly selected and inspired team can accomplish.  Just think about the impact a 3-day kaizen event can have.  Yet, the organizations that really excel with lean have figured out how to make improvement part of everyone’s daily work.  The same thinking applies to process development.  It is okay to start your journey to better process development with a great, focused team.  But make certain to capture lessons learned along the way to incorporate into your “process of process development.” 

What do you think of Matt and Eric's perspective on mistakes regarding Lean process development? Have you experienced the same problems in your company during your Lean initiative and process creation? 

For more information about the 6Con Model and Mat and Eric's book, please visit: https://www.thepowerofprocess.solutions/

Do Misconceptions About Lean Cause Many Initiatives to Fail?

At conferences, in magazine articles, and in books, we often hear of the benefits that Lean initiatives provide to organizations' efficiency and general workplace culture, but the failure rates are never comprehensively analyzed. In August, Cordell Hensley published an interesting new book, Lean Misconceptions: Why Many Lean Initiatives Fail and How You Can Avoid the Mistakes, that sheds light on why more than half of performance-improvement initiatives fail to achieve desired results.When I spoke with Cordell last week, I asked him: "What are the common mistakes that cause Lean initiatives to fail?” Here's the answer he provided:

The focus on removing waste is fundamental within Lean, but it should not be the only objective when beginning on your journey. Many organizations think simple: Lean = less waste. While this is true, it is like saying the TARDIS is just a police telephone box.

For example, I am always surprised by how few have heard of MURA (unevenness) or MURI (overburden). These are as, or potentially more, important than MUDA (waste). These other two create waste; and if you don’t focus on removing unevenness and overburden, then your efforts to reduce waste will be in vain. 

In addition, while removing or reducing waste is fundamental within Lean, I argue that it is too easy to ignore or skip the objective of creating capability. I’m not talking about getting a few experts in or training your leadership team but actively engaging everyone in the thinking behind what you’re trying to do.

Lean provides the impetus for challenging the status quo, for seeing every process as something that can be improved, including the improvement process itself. Arguably, improving processes is the easy bit, and identifying waste is relatively simple as well, but it is the change of focus of every employee to solving problems that only comes from a shift in organizational thinking. It is a shift from an organization where employees do as they’re told by management to one where they are engaged in making things better, for everyone, including the shareholders.

Today’s leaders seem to want an answer to their problem that they can buy “off the shelf.” This doesn’t exist! There is no silver bullet or panacea  that can fix  problems or improve performance for every business. The results they seek are readily available, but it takes effort, it takes learning, it takes a shift in paradigms.

Lean has been around for several decades. It evolved from research on Toyota followed by the application by hundreds if not thousands of organizations and their consultants. Many users and “experts” within organizations, however,  have modified and adjusted the thinking to suit their immediate needs. This has created misconceptions within the industry and has denigrated the term to little more than a process improvement technique. 

This evolution has, in most cases, reduced the potential that organizations can achieve and has sadly been used to put many thousands of people out of work. Throughout my book, I try to demonstrate a different view of Lean and the culture desired to enable organizations not only to improve their processes and systems but also to create the capability to learn and adapt to the ever-changing world in which they operate.

What do you think of Cordell's perspective? Have you been involved in a Lean initiative that has not lived up to expectations? What do you think are its shortcomings?

Lean Initiatives in the Construction Industry -- Can they succeed?

Just this month, Gary Santorella published a new edition of his forward-thinking book, Lean Culture for the Construction Industry: Building Responsible and Committed Project Teams. Much has changed in the construction industry since Gary published the first edition of his book back in 2010, so I contacted him to discuss what he has observed and learned working with professionals in this industry during the past seven years. One of the questions I asked was:“What are the main obstacles to a Lean initiative in a construction environment?” Here is his very candid and insightful answer:

The main obstacle is not an intellectual one, but psychological. In an industry that relies heavily on a multitude of personalities and companies, all of whom have competing interests, there is a natural tendency to resist tools that were developed in a controlled manufacturing environment. When you allow people to talk freely, there is a sense of skepticism that Lean practitioners “just don’t get us or what we do.” And, in many ways, they are right. Many of those trying to implement Lean in the construction industry are a bit tone deaf. They hear resistance as an intellectual challenge, and therefore counter it by generating copious amounts of data, imposing weighty (and sometimes faulty) measurements, and implementing Lean tools in such a way that is cumbersome – all of which only serves to justify the divide.

Given that most Lean practitioners are engineers by training, I understand the inclination to go straight for the analytics rather than attend to interpersonal struggles and issues influencing workplace culture, but in doing so, they ignore the realities of our industry. On any given day, the average Project Manager interacts with scores of individuals, each of whom comes from a variety of different backgrounds. From owners, architects, and city planners, to inspectors, workers and various employees and departments within their own company,  managers in construction, more than any other industry, have to be able to navigate the murky waters of human dynamics and interpersonal politics. That’s not to say that there aren’t ample opportunities for measurement and Lean tool implementation. Pull-planning, Value Stream Mapping, 5S and Kanbans have literally transformed businesses that were bleeding money in the form of waste. We know the flow stoppages that are the result of people choosing to store information idiosyncratically on their personal hard drives rather than using the standard practice of uploading to a common share drive. But when we emphasize data, and measurement, and tools we are taking Lean out of its proper context and missing the most transformative element of Lean – it’s ability to transform a culture.

The construction industry is, unfortunately, fraught with blame, finger-pointing, and self-protective cover-your-butt behaviors. The average Owner-Architect-Contractor meeting is more of an exercise of the fine art of attack and counter attack than productive waste identification and problem solving. Teaching people to use Lean tools in the context of their interactional realities is far more productive than measuring everything. When all of the competing parties understand that there is far more to be gained – financially and psychologically - by viewing problems as opportunities to improve, rather than as weapons, that’s when people start to understand the true power of Lean.

As Lean practitioners, we need be as interested in helping people to embrace the concerns of all of the parties, as we are in implementing the tools. To me, this is the true power of Lean. I love the framework because if implemented properly, it melds process and measurement with the psychological realities of human interest, and embodies the true meaning of the word teamwork by empowering people to change their working environment for the better. It’s exciting and humbling to see people come to the realization that they are far better off as a united whole, than a bunch of separate competing interests who are resigned to doing battle with each other. To me, this is the true power of Lean. The tools should be a means to get there, rather than the end result. 

What do you think of Gary's comments? For those working in the construction industry, do you agree with his observation of behaviors and habits?

What is the Key to Lean's Long-Term Success?

I recently had the opportunity to speak with both Bill Baker and Ken Rolfes about their new book, Lean for the Long Term: Sustainment is a Myth, Transformation is Reality. During our conversation, I asked them: "Why did you write this book? What was unique about your experiences?" Here are their complete separate responses:

William (Bill) Baker: When Ken and I began this book, we found we had been in different industries during the past 40 years, but we had witnessed similar transformations that had started strong with management commitment, but when the low-hanging fruit had been harvested and/or a new executive was hired, the transformation was derailed and lost its momentum. It seemed many times lean was viewed as a “project” executed by a manufacturing manager or continuous improvement leader, but it did not have full-time support by upper management. So we researched organizations that have been on the Lean transformation journey for 30 to35 years to discover their approach to share in Lean for the Long Term: Sustainment is a Myth, Transformation is Reality.

Ken Rolfes: Having been an early adopter of the Toyota Production System methodologies we call "Lean," I have had the opportunity to benefit from Lean strategies in multiple industries and companies. I have seen businesses transform with Lean and then lose it. We wanted to understand why so many Lean initiatives start off strong, plateau, and then recede as well as how can that be prevented. What we found is the Lean transformations that fail to last were not transformations after all. They were high-energy attempts to rally the organization to action, and when the energy is spent, so goes the transformation effort. A Lean transformation is, in reality, a different management system. Lean for the Long Term challenges our organization and management system models.

Business transformation is currently on most CEOs' agenda, and General Electric (GE) is only one example. GE’s announcement in April that it plans to sell off most of its big finance unit, GE Capital, represents one of a number of moves in the transformation of the company under the CEO Jeffrey Immelt. Mr. Immelt described it as a lengthy and often humbling corporate journey recognizing that GE’s real strength lies in industrial engineering rather than financial engineering.

A few years ago, when he was speaking at Stanford Business School about following Jack Welsh after his tenure at GE, he stated “The trick, if you follow someone famous, is that you’ve got to drive change every day without ever pretending anything was ever wrong,” This is the premise of the Lean management system described in Lean for the Long Term. Most are familiar that core idea of Lean is to maximize customer value, but many lean practitioners are hung up in their current business model and structured organizations that are compartmentalized, departmentalized and driven by MBO (management by objective) goals.

The structure and isolation from the customer will not work in the unprecedented trends in sheer number, speed, and intensity of today’s business transformation activity. The need for business transformation may be caused by external changes in the market such as an organization’s products or services being out of date, changing income streams, new regulations, and/or competition becoming more intense. Organizations need the flexibly and responsiveness required to drive business model transformation which a Lean management system is designed to deliver.

To accomplish this, management must change the focus from optimizing separate technologies, assets, and vertical departments to optimizing the flow of products and services through entire value streams that flow horizontally across technologies, assets, and departments to customers. The Lean management system described in Lean for the Long Term describes that system and gives examples how it applies in every business and every process and the line of sight management process required from the front-line operations to the board of directors. The application of the principles described in our book can make any business more effective and profitable. At the end, this can benefit all of us – owners, managers, employees, and communities. 

So many companies have experienced the Lean initiative "plateau" -- the beginning of the initiative is strong but it soon loses direction and energy. In your experience, what is the cause of this situation? Do you agree with Bill and Ken's perspectives?

Global Cultures and Lean Initiatives

This past Spring, Jeffrey P. Wincel and Thomas J. Kull published a book titled People, Process, and Culture: Lean Manufacturing in the Real World. A purchaser and reader of the book, Scott E. from the University of Kentucky, had some questions. He asked: "People, Process, and Culture: Lean Manufacturing in the Real World shows there are many interesting effects that a country's culture has on Lean. This is shown by testing the influence of each cultural dimension. Aren't all these dimensions, however, happening at once? If so, how can a manager use the results specified in the book and take into account all dimensions at once?" I directed these questions directly to the authors, and here is their reply: 

Thanks Scott, this is very true. The multiple dimensions of national culture we examine are operating simultaneously. So they all could be impacting how effective Lean practices are, all at the same time. Our method of testing does account for this. That is, we allow all nine dimensions of national culture (as described in the GLOBE international study HERE) to simultaneously try to predict if Lean practices will be effective in a country. Researchers sometimes call this "competing for variance." Our results try to mimic what's happening in the real world; each of these influences exists, but which ones really stand out as impacting Lean practice effectiveness? We find four. We should note that there are many more aspects of national culture not included in our study, and we hope researchers will build on what we did to explore those. 

Now, what does this mean for managers? At the end of our book, we list the various regions of the world and how they "score" on the four dimensions of national culture that we found impactful. It's a nice table, and it summarizes potential benefits and detriments of having a specific cultural bias. For instance, Latin America scores high on a dimension called "uncertainty avoidance," which is a dimension that increases Lean effectiveness. For managers working in Latin America or working with suppliers in Latin America, they can use this knowledge. High uncertainty avoidance means there's likely a cultural bias for responding to out-of-control signals, valuing structure improvement, and being attracted to routines: each beneficial to making Lean work. We think managers can go to this table and ask themselves, "Are my people generally sensitive to uncertainty?" If yes, then maybe showing them how Lean helps this can bring more effort into making Lean work. 

Our book has many other tables that make this research easy-to-use. So I hope readers can enjoy it, learn from it, and best of all make use of it! Thanks for asking! 

What do you think of Jeffrey and Thomas’ response? As Lean initiatives expand across the globe, what effect do you think local cultures will have on the implementation of Lean methodologies?

The Natural Barriers to Change and Lean Initiatives

I often come across online articles that discuss the implementation of a Lean initiative as akin to purchasing a new tool box, so I was impressed when I found this article on a blog site devoted to change management. This article succinctly explains the common barriers that hinder the transformational change needed to successfully reap the benefits of a Lean initiative.

In regard to those barriers associated with senior management, the article states that "measurements and rewards may be counterproductive." That is, managers might be driven to perform in ways detrimental to a Lean initiative because their objectives and incentives might be tied to an outdated accounting system or value of inventory. In addition, the article captures what I believe to be the most important cause of resistance to change by front-line employees and operators: They "will see the change to Lean as a loss of turf or status or as a downgrading of their skills."

I'd certainly like to hear you reactions to this article. Do you think it is accurate? Are there any important barriers missing from the discussion?

Comprehensive Lean and Green Resources on the EPA Site

The U.S. Environmental Protection Agency (EPA) offers on its website a wide array of resources -- from publications and reports to case studies -- for integrating and maximizing the environmental benefits of lean. Most notably, the agency features its Shingo Prize-winning Lean Manufacturing and the Environment report from October 2003. This report was crucial in establishing the relationship between lean and the environment because it was one of the first official documents that pointed out opportunities for further enhancing organizations’ environmental performance through their lean initiatives.

In addition, the case studies illustrate examples from many different industries, but one of the important facts about many of these initiatives is that the implementation of lean concepts and tools resulted in improvements in environmental performance even when lean activities were not initiated for environmental reasons.

Has your organization experienced environmental benefits through its lean initiative? Have any readers used these EPA resources? If so, please post your thoughts.

Karen Martin On Your AM Dial

Karen Martin (author of both The Kaizen Event Planner: Achieving Rapid Improvement in Office, Service, and Technical Environments and Metrics-Based Process Mapping: An Excel-Based Solution) will be a guest on the The Lean Nation radio show on Friday, March 12, from 4 pm to 5 pm (EST) on 790 AM Talk and Business, hosted by Karl Wadensten. She will discuss holding kaizen events in non-manufacturing settings.

You can listen live on 790 AM (Citadel Broadcasting, ABC Affiliate) in Providence, Rhode Island. In addition, the show is globally available via a live audio stream at 790business.com. She will be answering questions and listening to opinions, so feel free to call in to the show at 401-437-5000 or toll free at 888-345-0790. If you can’t tune in live, a podcast will be available after the show.

The Lean Nation is a new show on 790 AM and airs weekdays from 4 pm to 5 pm (EST) and streams online at 790business.com. The Lean Nation features real world examples and actionable advice from local and national business leaders on how “to reinvent yourself into a lean operation in business and in life.” The show's host, Karl Wadensten, is the president of VIBCO, a Rhode Island manufacturing company.

Corporate Sigma: Making Lean Six Sigma Holistic

One of the common complaints I hear about Lean Sigma initiatives is the failure of the organization to maintain momentum. Often the initiative begins with enthusiasm and energy and important strides are accomplished, but then it encounters the "glass wall" -- the initiative plateaus and the crucial goals remain unattainable. I posed the question "Why do Lean Sigma initiatives often deliver below expectations?" to Anwar El-Homsi (author of Corporate Sigma: Optimizing the Health of Your Company with Systems Thinking). He offered this reply:

"Lean Six Sigma tools have been successful in improving processes within the corporation, and several of these successes are well documented by many the companies. However, even with the documented successes due to the application of these tools, many companies still failed to meet strategic business goals. Why these corporations failed in spite of a successful Lean Six Sigma program? What did they miss? Some of the Lean Six Sigma program success factors include the need to have the right leadership, a compelling organizational vision, a well defined business plan, projects that are truly linked to business objectives, engaged and motivated people to execute the plan, etc. But one of the most important factors that imperative for success is the utilization of systems thinking. We need to think about improving the entire company holistically - not just focus on individual processes.

Sometimes, an improvement to a process in one area of the corporation can negatively impact another area or the entire company/business. Often, this negative effect is delayed and the impact is not realized until it is too late to do anything about it. The concept of 'Corporate Sigma' eliminates this problem and it addresses all the factors listed above. It combines the power of Lean Six Sigma and Systems Thinking to assess the performance and the quality level of the entire company, assuring both Lean Six Sigma program and corporate success."

Taking Toyota Out of Lean?

Like most lean advocates, I surely enjoy reading about presentations or case studies that detail the application of lean think and culture to new business and nontraditional industries. I was quite happy to read this article about a presentation given by Darren Bassett from FormaShape (a Canadian company that produces huge water slides) given at the recent "Composites 2010" convention in Las Vegas. He explains the benefits the organization received after adopting a lean initiative and, more specifically, how a specific TAKT time was established.

What I find curiously interesting about the article is the section that gives a brief background on the origin and history of lean. It states that the beginnings of lean manufacturing date back to Henry Ford's early 20th-century plants, but then continues with "the concept was taken up by the Japanese in automobile manufacturing in the '40s...." Not once is there a mention of Toyota! In addition, most lean practitioners know that lean culture was not something generally "taken up" by all Japanese automobile makers. The term lean was coined retroactively to describe the Toyota Production System -- the methodologies and culture we call "lean" were specifically honed at Toyota.

Do you think that because of the negative press Toyota has been receiving lately in regard to its recall of so many vehicles, writers are now shy to associate benefits derived from the most-powerful production system of the past 60 years with its originator? I might be reading too much into this one specific article, but do you think committees and organizations that sponsor lean and performance-improvement conferences will start to explicitly downplay the association of lean with Toyota?

Is Lean Green By Any Other Name?

The concept of sustainability has considerably proliferated during the past few years, and many organizations are recognizing its importance. Techniques and practices that consider environmental impact and minimize the use of energy do not only benefit society, but promote a more effective and successful business. A lean initiative, and the culture it fosters, perfectly complements and supports sustainable practices. Lean’s primary function is to reduce waste, and lean’s power to accurately identify and measure environmental wastes will only result long-term improvements and profits.

The popular terms that have emerged to identify this approach that incorporates sustainability and lean are “lean and green” and “green manufacturing.” When I recently received this announcement for an upcoming lean workshop (sponsored by Sherwin-Williams) focusing on environmental concerns, I was introduced to a new term: “Eco-Lean.” What other terms have you seen to describe these new initiatives? Which one do you think is the most accurate? Whatever term emerges as the standard, the goals and results remain the same, and a provocative thought emerges: capitalism and environmentalism can actually enhance each other.

The "Selling" of Lean

It appears the most common cause of lean-initiative failures is the lack of senior-leadership support and commitment. Are senior management leaders truly disbelieving the benefits of lean or are the reasons proposed by the advocates not persuasive enough? Some of the common roadblocks I’ve heard discussed are:

• Return on investment (ROI) – senior leaders do not fully see the short-term and long-term benefits of a lean initiative. Do they understand that lean is not merely a tool for quarterly or yearly gains?
• Lean is a specific “project” -- Lean improvement tasks can be delegated to particular persons within the company to fix certain areas. Do leaders fully grasp that lean is a cultural transformation not a process technique?
• Compliance not commitment – senior managers do not impede the initiative, but they do not outwardly lead it or actively participate in its implementation. If senior leadership appears reticent, does this attitude also dissuade engagement by operators and frontline staff?

What are some other reasons for senior leadership’s lack of support? Are advocates making ineffective and incorrect “sales pitches”? Please share your experiences and suggestions.