- Defining a company wide Lean policy
- Identifying core value streams
- Eliminating obvious waste quickly
- Creating level, continuous flow
- Implementing a pull system
- Going back to step 1 and doing it all over again
Policy development and deployment ("Hoshin Kanri")
Your company's senior management team needs to decide what the goals for the company will be going forward for the next 12 to 24 months. This typically equates to three to five critical initiatives necessary to attain business objectives. These must then be "deployed" down through each successive layer of the organization along with specific metrics that will help to align everyone behind a common goal and to gauge your progress. It's been compared to Management By Objectives, but the comparisons also point out that MBOs focus solely on the target (the "what") and provide nothing to assist you on the process (the "how"). Hoshin Kanri helps define the "how" to obtain the "what".
As the goals work their way downward, general policy statements are restated as increasingly specific and action-oriented goals, eventually becoming precise metrics. The specific actions are where the more commonly known tools of Lean come in to play – Value Stream Mapping, kaizen waste elimination efforts, 5S workplace organization, etc. By starting at and forcing the company to clearly spell out its corporate goals, you can avoid many of the traps and pitfalls you've read about with companies that have failed to truly become a Lean enterprise; specifically, those that run "point" Kaizen events, which do nothing but create isolated pockets of improvement, and which then turn out to be short lived because nothing above or below that "point" in the value stream can effectively deal with output from the now-improved Kaizen area – there's no flow.
Making improvements does little to make someone Lean by the classic, accepted definition of the term unless you are able to implement and effectively maintain a pull system of manufacturing. You can't pull unless you've created flow, you can't create flow unless you've eliminated waste, and you can't eliminate waste unless everyone is aligned behind a common set of clearly defined, measurable goals that support your business objectives.
Defining a core value stream
This is where you'll start to see policy deployment move down to the next level. You need to define some of your core value streams. I say some because you can't attack in every direction at once. Not yet. You need to pick your battles carefully and not overwhelm people at the outset, otherwise you will kill momentum. If you have many value streams, you may need to decide which are at the core, or are the most critical, and start on those first.
Eliminating obvious waste, quickly…
…through kaizen events. Attacking wasted time, effort, and motion during machine changeovers; eliminating wasted time, effort, and transportation of materials through better facility layout. Eliminating obvious waste will allow you to…
…Create level, continuous flow.
Flow is defined as "the progressive achievement of tasks along the value stream so that a product proceeds from design to launch, order to delivery, and raw materials into the hands of the customer with no stoppages, scrap, or backflows." (Womack and Jones, 1996) What we're after is a continuous flow of raw material through our operations and out to our customers. Stoppages create inventory, scrap drives up costs, and backflows wreck the schedule.
Implementing a pull system
Once you've have achieved level, continuous flow, you can initiate a pull system on the core value streams you've identified. When this can happen depends on how successful you are in eliminating waste and creating flow in those products.
Going back to #1 and starting all over again
You need to revisit your strategic plans several times during the year. How are you doing with your current objectives? Do they need to be changed, updated or dropped for another core stream? What objectives will you develop for future years?
George Koenigsaecker, president of Lean Investments and the former president of Jacobs Vehicle Equipment Company ("Jake Brake"), talks about a four year learning curve and about what to expect year by year in Becoming Lean, Inside Stories of U.S. Manufacturers (Liker, 1998). The first year, he says, is the "Maybe This Will Work" year, when stories of improvement on individual projects tend to give management a sense that "maybe this will work."
Koenigsaecker calls the second year – "The Jury Is Still Out" – the riskiest year, as those "who are working to implement the change will be novices in applying the principles (which are all part of the learning process but difficult to explain). More important, the costs of training and implementing the conversion will be readily identifiable by the accounting staff, but things like a 10 percent productivity gain will not have compounded to the point that clearly shows a great payoff." He also talks about this year being the year that the naysayer will point out "every instance of one step forward and two steps back, and 'selling' the organization that it is time to give up this nonsense." A lot of people might begin to think that "it seems like a good idea, but I'm just not sure it's working."
The third year is the year in which results begin to compound and the naysayers cannot easily explain them away as the result of some other cause. Financial numbers show unmistakable improvement, and momentum is such that there are "two steps forward with no backsliding." Year four is the year that everything clicks and "everything becomes institutionalized." He warns that at times it is "perilous," and "for those who are feeling a little faint-hearted and who are looking for an easier way out – there isn't one."
Stick to it
In order for you to sustain a Lean enterprise you need to develop a Lean policy that supports your business objectives. You need to define the core value streams that impact those objectives, decide on the metrics you'll use to measure your progress and cascade these down to the plant floor. Individual plants and departments then must develop specific action plans to address these metrics for those core value streams and cascade these action plans down to their respective plant teams.
You need to eliminate the fear of making mistakes as well as the fear of repercussions and blame for making them. You must create an environment in which people are not only unafraid to make mistakes – which are really opportunities for improvement waiting to be discovered – but one in which people are eager to take on challenges and to make the small, daily changes that eventually turn your organization into a Lean enterprise.
"And let it be noted that there is no more delicate matter to take in hand, nor more dangerous to conduct, nor more doubtful in its success, than to set up as the leader in the introduction of changes. For he who innovates will have for his enemies all those who are well off under the existing order of things, and only lukewarm supporters in those who might be better off under the new.'' – Niccolò Machiavelli
There will be people who, both intentionally and unintentionally, create obstacles and disruptions along your Lean journey. They will point out every misstep and the consequences that result from them. They will say, "I told you so." It is your job, your duty, as a Lean champion to push forward through these obstacles and past the naysayers and to keep your Lean journey on track.