"Sustaining Lean"

George Koenigsaecker

Manufacturing Engineering

May 2007, pp. 117-130

The author of this article has led 11 different corporations on the Lean journey, and he reports that all of them have continued to practice lean process-improvement, even through several generations of leadership change. A key aspect of this has been the development of a learning culture.

Involvement in kaizen events is seen as a key: "It turns out that you drive most Lean results from organized kaizen events that are driven by an enterprise value stream analysis and improvement plan. It also turns out that lean is learned from personal participation in these hands-on improvement events. You realty don't learn much about Lean from books. It's the struggle of applying new tools, new principles, and new practices to a 'chunk' of your existing work."

Some research indicates that significant employee positive attitude changes occur after two weeks of kaizen events, and this change accelerates through eight weeks of kaizen events. At that point, things level off at a high level.

Leaders also need to participate in kaizen events on a regular basis. This is both to develop understanding and practice of Lean, and to demonstrate commitment to others in the organization.

The author proposes a rule of thumb that an organization will be "substantially lean" when it has studied every process from beginning to end, at least five times. Typically, about half the waste in a process is removed each time you study it. After five or so passes through every process, a new culture will be built on the realization that there is no end to improvement. Once this culture is established, sustaining Lean becomes second nature.

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"How Do Your Measurements Stack Up to Lean?"

Frances Kennedy, Lisa Owens-Jackson, Laurie Burney, and Michael Schoon

Strategic Finance

May 2007, pp. 33-41

Many authors have argued that traditional measures often do not align well with Lean principles. It is often proposed that strategic performance charts should be completely redesigned in Lean enterprises. While this article agrees with that in the ideal, it is recognized that a complete redesign is not always feasible, such as when a Lean manufacturing company is part of a larger company with standard reporting of measures.

This article presents several useful generic forms to assess the value of a specific metric, in the context of how the metric's attributes relate to the following principles of Lean:

• Customer value
• Value stream
• Flow and pull
• Empowerment
• Perfection

The first form to assess the metric focuses on the technical attributes of the metric. This refers to "its ability to enhance the understanding of the phenomena being considered and to provide relevant information for strategic decisions." Some of the questions asked are:

• Does the measure relate to customer service?
• Is it a functional or process-oriented measure?
• Does the measure promote a smooth workflow?
• Who uses this measurement information?
• Does the measure change between periods?

The second form to assess the metric focuses on the behavioral attributes of the metric. This refers to "whether management accounting measures motivate employee actions that are consistent with strategic objectives." Some of the questions asked are:

• How does the measure relate to the business's strategic goals?
• Where does the measure focus attention?
• How does the measure relate to employee output?
• What individual behavior does the measure motivate?
• How well is the measurement goal communicated?

The third form to assess the metric focuses on the cultural attributes of the metric. This refers to "the beliefs and values embedded in a measure, and measures are symbols that represent mind-sets held by members of organizations." Some of the questions asked are:

• How does the measure reflect value as defined from the customer's viewpoint?
• Does the measure encourage continuous improvement at the value-stream level?
• Does this measure encourage one-piece flow through the production cell?
• Does the measure provide adequate information to the people making decisions?
• Does the measure promote the elimination of unnecessary steps or waste?

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"Continuous Processes Can Be Lean"

Siew Mun Ha

Manufacturing Engineering

June 2007, pp. 103-109

In examining the application of Lean's concept of the Seven Wastes to process industries, the author says that for the most part the wastes of overproduction, inventory, transportation, waiting, and movement are much less fruitful areas for improvement than in discrete manufacturing settings. The areas to focus upon are the wastes of defects and of over-processing.

The perfect process value stream is one where all the machines are:

• Capable—able to produce within the quality specifications of the downstream customer
• Available for production with no unplanned downtime
• Efficient—consume the minimal necessary energy and raw materials
• Adequate—possess sufficient capacity to meet demand

The main root cause of waste in process industries is poor mechanical condition of machines. The process-improvement tool used to restore machinery to optimum mechanical condition is a Maintenance kaizen event. To sustain the improvement, the company must practice total Productive Maintenance (TPM).

The second leading root cause of waste is suboptimal operation. Determining the optimum setting to run the machine is usually done through Six Sigma and Design of Experiments (DOE).

Poor machine design and obsolete technology are two other causes of waste in process industries. Improving machine design/technology is an engineering issue.

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"Building Human Resources Strategic Planning, Process and Measurement Capability: Using Six Sigma as a Foundation"

Kim Kleasen

Organizational Development Journal

Spring 2007, pp. 37-41

This article describes one application of Six Sigma to the Human Resources function. The plan was implemented in a specific organization that was implementing Six Sigma across all organizational functions, but the principles are considered adaptable to a variety of organizations.

The steps of the plan were:

• Dedicating a full-time HR employee to Six sigma for HR.
• Using Six Sigma tools to develop a strategic planning process for the organization's people assets. The plan was conducted in alignment with the business planning cycle, to be sure that it was integrated with the overall organization strategy.
• Developing an HR Dashboard that linked metrics to each of the strategies on the HR plan. Two HR metrics were also included in the overall business dashboard.
• Identifying specific HR strategies for Six Sigma improvement projects. This helped HR professionals better understand the Six Sigma mindset.

The author identifies a number of key learnings that she feels can be transferred to other organizations:

• Resist the temptation to try to solve all HR issues at once. Prioritize and focus HR strategies to ensure progress and success in initial efforts.
• Ensure that the business planning cycle is aligned with the HR strategic planning cycle.
• A well-planned communication approach is needed to convey HR strategy and dashboard results.
• Ensure that key HR metrics are included in the business dashboard.
• Focus on the critical few metrics because collecting and reporting on a large number of metrics can be cumbersome.
• Be sure to use solid change management practices throughout the process. These should include "communication plans, ongoing stakeholder management and engagement of HR and business leaders. Seeking input and feedback throughout the process was a key activity to build the needed engagement and commitment over time."

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BOOKS
Inside the Mind of Toyota: Management Principles for Enduring Growth

Satoshi Hino (Translated by Andrew Dillon)

New York: Productivity Press, 2006.

This book provides the most in-depth look yet at "the fundamental thinking and management structures that underlie the creation of the famed Toyota Production System."

The first chapter provides a history of the Toyota organization and looks at the contributions of various individuals to what eventually became Toyota organization of today. It identifies several traditions at the heart of Toyota:

• A pattern of linking all trials to competitive strength
• Perseverance even in the face of initial setbacks
• A gritty willingness to use whatever it takes to succeed
• Marketing schemes that emphasize users
• Production technology for mass production
• An emphasis on basic research
• Diverse efforts at technological innovation and commercialization
• Documentation of all processes
• A "learning bureaucracy"

The second chapter discusses the elements of the "Toyota paradigm": the overall company philosophy, perspectives on work, perspectives on people, perspectives on information, elimination of waste, systems thinking, decision making, and risk-taking.

The third chapter looks at Toyota's system of management functions: Total Quality Control, decision-making bodies, hoshin kanri/policy deployment, cross-functional management, Quality Assurance, Cost Management, financial and accounting systems, training, managing office work, managing documents, managing business standards, product development management, supply chain management, and company-wide information system.

The fourth chapter looks at Toyota's system of production functions: the marketing system, the individual product development system, the design management system, the design review system, use of production technology, the purchasing system, the Toyota Production System (addressed only very briefly), and the Sales system.

The fifth chapter looks at product power and brand power: This chapter examines Toyota's standing on third party ratings of Initial Quality, Vehicle Dependability, Automotive Performance, Execution, and Layout, Sales Satisfaction, and Customer Satisfaction.

The sixth and last chapter covers the topic of Toyota Management in the 21st Century. Key elements include:

• Priority investments in technological development (including focus on the environment, safety, and information technologies)
• Driving globalization forward
• Enhancing cost competitiveness
• Enlarging the value chain

Other aspects include a revitalization of the company culture of continuous improvement and respect for people, innovation in product development, and development of modular design.

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Process Industry Lean Lessons

John McNeil, GP Operational Excellence
 

In his excellent article, Siew Mun Ha highlights the fundamental differences between process-based and discrete manufacturing. He points out that in a single-product, single raw material process, machinery uptime is a critical determinant of efficiency. In many process industries though, different raw materials are combined. For instance, many types of vegetables are used in baby food. In many process industries, different products are differentially processed. For example, a basic steel type can be rolled out into many different cross sections and cut into many lengths for different end uses. Or take cheese as another example. The most basic cheese product is a large yellow slab. But very few large slabs of cheese are consumed compared to unwrapped slices, shreds, wrapped slices, staggered wrapped slices, and so forth. Each of these products assumes all the characteristics of discrete parts manufacture, including the introduction of overproduction, inventory, transportation, and waiting wastes.

Meantime, in the back offices, purchasing departments, and even maintenance departments of all styles of organization, the 7 types of waste abound within information and paper processing. And while Siew Mun Ha focuses on machine uptime as a justifiably significant cause of suboptimization, so are logistic, data, and human resources shortfalls and shortcomings. As Lean fundamentalists, we at GP Operational Excellence seldom find cause to abandon any of the core lean principles in our work.

We also remain keenly aware, as Hino points out in his book, that enterprise success at the Toyota level involves balancing his nine traditions, eight paradigm elements, fourteen management functions, and eight production functions.

Crossing all of these are needed key competencies in deploying and motivating people, generating ideas, and solving problems. Without these, attempts at instituting systems, eliminating waste, and practicing TPM will all be for naught.

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