I recently had the opportunity to visit three shops in the United States and one in Australia. Management at each of the shops considers their operation to be lean, but by the accepted definition of lean, only one of them is headed down the right path. I will tell you about the three with the flawed perception of lean in this article. The next article will illustrate the difference between lean perception and lean reality and the course you can take to arrive at the right destination.
Executives at each of these three facilities wouldn’t allow me to take pictures of their processes, so I will have to use a thousand words to describe them. One of the shops is in Melbourne and the other two are in the Los Angeles area. One lesson that I learned during my visits was that although the shops are separated by hundreds or thousands of miles and are in different hemispheres, the old-school task-management style of leadership has no boundaries.
Lean down under
The Melbourne shop has 30 employees and the output is a mix of standard and custom product. The facility is modern with some state-of-the-art equipment and staffed by mostly long-term employees with limited exposure to processes in other shops. On-time delivery is better than 95 percent, which is commendable, but there is a lot of rework along the way and customer satisfaction with product quality is less than 80 percent.
Lead time is measured in weeks instead of days. One of the main contributors to long lead time and poor customer satisfaction is inventory accuracy, which is a dismal 70 percent. That means that 30 percent of the time an employee needs something to complete a process the item is not available and the order has to be set aside while the purchasing manager scrambles to get the needed part. In Australia that can be quite a challenge. As you might imagine, margin is being eroded, productivity is poor, and profitability is tenuous.
During the shop tour the manager was pleased to point out the areas where he had implemented Workplace Organization, and he was quick to offer reasons why things were missing from shadow boards and why toolboxes were in a state of disarray. His reasons all pointed to uncooperative employees who were not supporting his lean initiative.
Midway through the tour I asked him who had developed the shadow boards and who determined where they should be located. His response was predictable. He had designed the shadow boards, determined what should be on them, and defined their locations with only minimal input from the people who would be charged with maintaining them.
Lean in Los Angeles
The shops in L.A. are distinctly different. One has about 20 employees and has a standard product offering while the other shop is much larger with 60 employees and offers both standard and custom product. The smaller shop is very good at maintaining high marks in the typical Key Performance Indicators (KPI) and could be considered a model that shops of any size would like to emulate. On the surface there were wonderful examples of organization and control through Workplace Organization and Kanban, but it didn’t take long to see how thin the line was between managed organization and chaos. Control was being maintained by the senior manager who had implemented the lean tools and strictly enforced compliance. The senior manager has been at the shop for many years and is technically savvy in all of the process steps.
The second example, which is about 120 miles away, struggles with achieving KPI goals, but, unlike the smaller shop, it doesn’t have the luxury of low volume, low product mix. The senior manager is relatively new to the business, but has good lean experience. He understands what needs to be done and is working with mid-level managers to establish a culture that will encourage active participation across the organization in the lean transformation process.
In the meantime, the shop shows signs that the previous manager was knowledgeable of lean tools and techniques, but like the shops described above, he lacked an understanding of how to effectively manage in a lean environment. There was evidence of an attempt to implement Workplace Organization and Kanban, but neither tool was being maintained successfully. The new manager is faced with two challenges. He has to change the culture of the organization through his leadership team while gaining the trust, respect, and confidence of the shop staff so they will be willing participants as the change process moves forward.
What are the common threads that bind all of these shops together? One is the managers’ understanding of lean tools and techniques and their desire to reap the benefits of a lean transformation. Another is their lack of understanding of how to effectively deploy lean tools and techniques. Finally, each manager started the process by trying to build a foundation for change through Workplace Organization.
What is missing in their approach to implementing change? If you have been following my articles over the last decade you know that lean cannot succeed without the 6 Es:
• Enlist the assistance and cooperation of all staff;
• Enable the staff by instilling them with the knowledge to act;
• Engage the staff through active involvement;
• Excite the staff and stir them to activities that lead to change;
• Empower the staff by authorizing them to make change happen in their area of control;
• Encourage the staff by celebrating success and spur them on to further change.
This whole series of articles uses Workplace Organization as the central theme because, as is evident by the above examples, many managers believe that if they implement the 5Ss great things will happen. Don’t let them lull you into thinking that Workplace Organization is the beginning and end of the lean journey. Lean is not about tools, it is a process for creating an environment that encourages continuous improvement in every area of a business. The 5Ss – Sort, Set-in-Order, Shine, Standardize, and Sustain – ensure consistency and continuity in achieving the process of change.
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