1. Who are you, what organization are you with, and what are your
current lean-oriented activities?
I have been a student of Lean since the early 90’s. I have been directly involved with Lean since 1992 (as a Plant/General Manager with The Hon Company and as VP Operations with Jennings Technology (a Danaher Company)). I have been involved in Enterprise Wise Lean Consulting since 1998, as a VP, COO, President and Senior Partner of two consulting companies (Simpler and Lean Horizons). I have since left the consultancy world, and am working an independent schedule focusing my attention in the Healthcare, Oil and Gas and Manufacturing sectors. I continue to speak at Lean Conferences around the world focusing on topics including: Lean “Information Flow”, Getting Started with Lean, and Strategy Deployment. I continue to work on a book focusing on the effective use of Lean in information flows.
2. How, when, and why did you get introduced to lean and what fueled
and fuels the passion?
Looking back, I talk about my learning in 3 distinct phases:
Phase I (mid 80’s through early 90’s) is what I call the “days of industrial tourism.” For those that can recall, these were the days of SPC, Cells, Suggestion Programs, SMED, Kanban, self directed work teams … etc. This was the era of American Management taking regular trips to Japan to try and ‘figure out’ what the keys to Japanese Industrial success. As a young (manufacturing) engineer, I was sent to a myriad of ‘workshops’ to learn these concepts and bring them to the plant. I didn’t have a clue what I was looking at, or more importantly why a concept/tool might have been important, but I did learn a lot of ‘stuff’ and had a lot of fun. What’s funny is that in spite of our inability to understand “what, why, or how”, we did implement many “tools” with great enthusiasm. We always got “better,” but we never really understood ‘what good looked like’. I learned two key things from this era: (1) managing “cells*” was a whole lot easier than managing “work centers” and (2) Every tool had potential value, but not every tool was needed in every situation.
Phase II (1992-1998) is what I call “real Learning.” I was fortunate enough to have worked for 2 companies (Hon and Danaher) that both had selected the same group of Japanese consultants to implement “Lean” into “Manufacturing.” During this period, not only did I transition into Operations management, but more importantly I was introduced to TPS (Lean) by Japanese mentors who really knew what TPS was and how TPS should be used. The lessons were painful and grueling, but it was during the 6+ year period that I learned the discipline of the TPS Principles and understood (accepted) that the lean process was incredible at driving metrics such as: Productivity, Capacity, Lead Time, Quality and Safety. The timing for me personally was perfect. It is important to note, that although I transitioned from doing “stuff” to improving “metrics,” I still had a lot to learn about impacting a Business.
Phase III (1998-today) is what I call “Enterprise Learning.” From a developmental perspective: Phase I was about “tools” and “concepts”. Phase II was about improving “metrics.” Phase III was about improving a Business (i.e. the Balance Sheet and Income statement). Late in 1998 is when I got involved in consulting. In those early days, for me, Lean = Lean “Manufacturing.” Running consulting companies forced me to ‘target’ clients applications of Lean to their P&L. No longer could “project” results be summed into bottom line results. It was during this period that I lived by the credo “…if the controller can’t measure it … it doesn’t count.” This simple approach ensured the client selected meaningful Value Streams, and also prevented (didn’t eliminate) much of the “Lean for the sake of Lean” activity.
Impacting Business level performance (Balance Sheet and Income Statement) is the passion for me. No one hires individuals to ‘reduce walking distance’ or ‘5s an office/shop.’ Can you help me with my P&L is the question that executives ask. More importantly is how this Business Level challenge affects how I ‘think’ about Lean Implementation…
3. In your opinion what is the most powerful aspect of lean?
I often get asked “what makes Lean any different that TQM, Quality Circles, Six Sigma .. etc. My answer is two fold. One aspect is that Lean truly has a process for both the Identification (i.e. Lean “tools”) and Elimination (“tools’ and principles) of Waste. However the second is not so obvious. Every improvement ‘program’ (past and present) uses some/all aspects of: Problem Statements, Cross functional Teams, Process/Value stream map, Brianstorming, problem solving … etc. These pieces are not so different. What people don’t realize is that “lean” introduces a critical step that others do not. It is the step of “Understand the Current State “… before we brainstorm, discuss, prioritize and determine solutions. This step (create a common understanding) is imperative to the problem solving, cross functional, team buy in process. In every other “improvement program”, the ‘program’ moves too quickly from “Problem” (blame) to “brainstorming” (what will we do). Using this approach, we quickly apply all kinds of ways to prioritize, weight, factor .. etc the (preconceived) ideas in order to decide ‘what’ we will work on.
The problem is this: When different departments come to a ‘room’ (or join a team) to solve a problem, everyone comes into the room with what they (honestly) believe is the problem (from their point of view). In particularly bad situations, politics, personal opinion, bully behavior or passive aggressive behavior inappropriately affects the direction of a team … Without a process’ which seeks to first create a common understanding of the problem (before asking for ideas/solutions), what have is a group of people ‘doing battle’ over what they believe is the biggest issue.
What is powerful about “Lean” is that every use of Lean seeks first to gain this common understanding of the process (via VS Maps, Spaghetti Diagrams, Process Maps, Time Observations, Gemba Walks) and uses data from which to begin any analysis (Takt Time, Bar Charts, Failure (data) analysis…). In taking the first step of Create a common understanding, when it becomes time to discuss ‘where is the impact’… The individuals ‘see’ the problem and the process through a common lens. From this common starting point, the ideas are more focused, the discussion is fact based, the buy in is much stronger, the solutions are not only more poignant, but (more importantly) the buy in is much higher.
4. In your opinion what is the most misunderstood or unrecognized
aspect of lean?
A lesson that many learn (the hard way) is that although Lean is about Identifying and Eliminating waste, when an organization is testing the waters with Lean, it is not good enough to simply eliminate wastes. You must learn to use Lean to Identify and eliminate the Right Wastes. That is, those specific wastes that impact the “Business Case” (i.e. metrics) you are trying to improve. If one understands this concept and how it subsequently affects how a team will decide ‘what’ to implement and what to focus on, the wasted energy of so many Lean start ups can be avoided:
- When teams start moving off on a Tangent, the question “…is this discussion going to impact our Business Case?” can be asked to refocus a team
- When building a VS Map, you can quickly qualify/quantify the scope of the VS Map (i.e. how much detail should we go into?). The result will be VS Maps which have been built with the “right waste” in mind and in turn are much more effective at guiding implementation plans that accomplish the objective
- When the “list” of things to do gets too long (they all do), you can also qualify every task through the “Business Case” lens (I.e. “must have” .. and “nice to have”)
- When a team begins to ‘force a tool,’ one can ask “…what waste will this tool help us to identify. Is this waste likely to have a significant impact on our Business Case?”
The following steps should be used (considered) whenever choosing to use lean as part of a Project Improvement, Value Stream improvement or Business Unit improvement:
- Define your “Business Case.” What is it that you think you want to improve? Be specific.
- What is the metric?
- Define the Metric (numerator and denominator)
- Establish your baseline (gather data)
- Deselect and then Select the Value Stream(s) that impact the Metric. In other words, which Value Streams have little/no impact on the metric. Similarly, what VS have significant impact on the metric. If you want a 10% improvement overall, and a particular VS has 50% of the impact in the metric, then a 20% improvement on the target VS (50% contribution) will yield your 10% improvement overall
- Once you have selected your target VS, use the Lean process (VSM, Implementation Plan, Introduction of the right tools/techniques) to Identify and eliminate the Right wastes.
If you follow this type of approach,
- Your Lean ‘approach’ will become more targeted
- The waste you impact will in turn impact the metrics you have been tasked to improve
- You will be less likely ‘accept’ a project and expectation that has little chance of success
- You will have built in a natural ‘speed bump’ into your process which clearly defines expectations, scopes the task at hand, quantifies “any” waste into “must have” and “nice to have” categories.
- You will make much more effective use of you and your organizations resources
- You will prevent common mistakes that sound like: “we must VS Map every process,” “It is time to 5s the office,” “what kaizen events will we be doing this month?,” “We must use Visual Management (everywhere),” “Lean won’t work in Product Development…”
5. In your opinion what is the biggest opportunity for lean in
today's world? How can that be accomplished?
By far the biggest opportunity lies not with the companies who are doing Lean well, but with those companies who don’t realize they are using lean inappropriately. The operative phrase is “you don’t know what you don’t know.”
In the early 90’s, when I first started learning Lean, I often heard the phrase “after 5 years of doing this lean stuff, you will then be in kindergarten.” I believed this for almost a decade. It was around this time that I began to consider the learning environment that existed in 1992 compared to 2000. In 1992, my employers used consultants where I was ‘not allowed’ to ask questions. There were no good books available to explain ‘how’ to implement lean (there were lots of books that talked about lean “tools.”) The conferences available in 1992 were also either non-existent or early in their infancy. Since 2000, the quantity and quality of books available have increased one hundred fold (I am a believer that good books and bad books offer much learning to the reader). In 1992, we implemented (learned) lean like “chickens with our heads cut off…” Too many companies (and too many consulting companies) continue to engage lean with this model.
By 2002, AME had joined The Shingo Prize in putting all their chips into “Lean.” Today, the number of skilled people with ‘real’ lean implementation experience numbers in the thousands vs the dozens. I no longer believe in the “5 years = Kindergarten” rule. I now ask the question “how good do you have to be at Lean in order to make a significant improvement to key metrics in your business?” The answer is “…not very good…provided you have a focus, a structure and a process for Implementing Lean.”
The danger with Lean is that everyone thinks of Lean too ‘low’ (many refer to this as thinking of Lean as a “tool.”) The real opportunity is to ‘see’ Lean as a mechanism to improve the Balance Sheet and the Income Statement. Interestingly, when thinking about lean at a Business level, most of your Lean activity will reside in your Information Flow Value Streams (Inquiry to Order, Order to Cash, Product Development, New Product Introduction, Product Lifecycle “Value Stream”, Working Capital Management … etc)
- Can Lean help use improve Working Capital? Yes, lets choose to use Lean to improve Receivables (Reduce DSO by 15 days = $7.5mm) and Inventory (Reduce Inventory by 40% = additional 3.2 turns = $5.6mm)
- How can Lean help us improve Market Share from 22% to 30%? Lets use Lean to improve “speed to market” from 50%. or With our new “Inquiry to Order” capability, we can now access a market segment we couldn’t before. If we can absorb this growth with no additional assets (Equipment and/or inventory) and we can leverage the growth into productivity, we can improve Gross Profit from 32% to 41%
I truly believe you can make significant improvements to your business, in a short period of time, provided (1) you have a structure for engaging Lean: Business Case – Value Stream Selection – Proper use of Lean Process/Tools, (2) you develop a process for executing Lean: Identify and Eliminate the right wastes, (3) you choose to take advantage of the wealth of knowledge available to you today: Conferences, Workshops, Books, Webcasts. The biggest opportunity lies with “raising the bar” amongst three primary groups:
Group I (those that are good at “Lean” today): Raise the bar from using Lean to Improve Value Streams to being able to use lean to improve a Business Unit … Grow (existing) market Share, enter new Markets, Reduce Working Capital, Increase Cash Flow .. etc
Group II (those that think they are good at “Lean”):Raise the bar from Lean being a tactical capability to Lean producing Operational (Office and Shop) Capability. It is operational capabilities that can be used to accomplish Strategic objectives.
Group III (those that know they don’t know lean):Take advantage of the lessons learned in so many industries over the past 20’ish’ years. Skip the missteps of Group II and take on the challenges of Group I. Understanding the challenges will make you realize what’s possible and help you understand how much work there is to do. From a Lean Vision and Business Strategy perspective “Stand Tall” and know “what” you want, establish “how” you will measure progress (success) and decide “how fast” is the appropriate velocity of change for your organization.