I just returned from Chicago where I attended the quarterly board meeting of the Association for Manufacturing Excellence. The meetings are always interesting and thought-provoking, primarily due to the diverse nature of the board members. Company executives, shop floor practitioners, consultants, academics, private equity investors… you name it. The new chairman, Keith Syberg, even runs an executive search firm specializing in lean.
Aside from a handful of administrative support people, the board and management team of AME is all volunteer and unpaid, which creates some interesting managerial issues but also means that everyone is there because of a genuine passion for manufacturing excellence. That passion helps AME put on the largest lean conference each year, and run hundreds of smaller events.
One highlight of this past meeting was reviewing the results from an extensive survey of thousands of practitioners and several CEO focus groups. Obviously I can’t disclose most of it, but I will say it will lead to some interesting new AME programs in the future. However one fundamental piece of summary information was interesting: the top five "hot topics" by hands-on lean implementers:
- culture change
- supply chains
- value streams
- visual controls
You have the original basics, such as value streams and visual controls, as well as newer concepts like culture change. The old is still new, but some organizations are wrestling with fundamental issues that go beyond the tools. This then led to what I found to be one of the more interesting discussions of the weekend: the impact of lean efforts moving beyond basic manufacturing and into the overall enterprise, and especially into non-manufacturing organizations.
There are obvious benefits resulting from applying lean manufacturing techniques to enterprises such as health care, government, education, and the like. Massive waste and associated costs can be removed while improving the level of service, and we’ve talked about many of those opportunities here and on Superfactory.
How and why did lean move into those new realms, and what is the impact? Lean started on the factory floor. Then it became obvious that the techniques could be applied to the manufacturing support and administrative functions, and later to enterprises that had nothing to do with manufacturing. Some of this evolution was due to natural organic growth as shop floors were optimized, exposing waste in support areas. People who honed their skills on the shop floor moved to completely different organizations and saw the opportunity to introduce and implement what they had learned.
But in other cases it is due to manufacturing organizations trying to implement lean widely and quickly… not deeply. And unfortunately some consultants trying to find new niches to make a quick buck with their ubiquitous "kaizen-in-a-box" programs or creating questionable "extensions" of lean. Short-term, narrow-focus, shallow programs that have no hope of creating a sustainable lean organization. Even the PowerPoint presentation downloads on Superfactory are designed to be just a tiny part of an overall lean program, but I’m sure some short-sighted organizations use them once and declare themselves magically "lean."
Surveys have shown that roughly 60% of manufacturing companies are "complacent." What they’re already doing is deemed acceptable by the owners, and they see no reason to change. Those are the companies that are likely to wake up one morning and find themselves almost immediately nonexistent or irrelevant when a new competitor surprises them with a new business model. Another 35% "dabble" in lean. They have some level of desire to "do lean" but don’t really understand how or don’t have the executive commitment required to really implement it. Although the AME survey also showed that many company executives simply didn’t know where to go to get the knowledge… even if they truly wanted a real lean program. The last 5% are the companies truly executing a deep lean transformation. And many of those are teetering on the edge of failure.
Becoming a truly lean organization takes a long-term and deep commitment. So what is the impact of this "dilution" of lean? Is it hurting the potential sustainable transformations, especially of factory floors? Or is it creating greater overall value by casting a wider net? How do we enable and stimulate the creation of deep sustainable lean programs that require long-term commitments?