lean transformation ~ a journey
TRANSCRIPT
Lean Transformation
A Journey
Anand Subramaniam
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“You are here to enrich the world, and you impoverish yourself if you forget the
errand.”
- Woodrow Wilson
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Origins of Lean
Lean concepts evolved from the JIT philosophy pioneered in Japan by Toyota and embodied in their Toyota Production System (TPS)
The emphasis of JIT is the elimination of waste throughout the supply chain
In the 1990's companies adopted the term lean in place of JIT
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Basis of Lean Thinking
Lean means producing What is needed When it is needed With the minimum amount of materials, equipment,
labor, and space
The goal of an enterprise adopting lean Make each process as efficient and effective as
possible Connecting those processes in a stream or
continuous chain that is focused on flow and maximising customer value
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Lean Principles
Control Measure
AnalyseImprove
Specify value in the eyes of the customer
Identify the value stream and eliminate the waste
Make value flow at the pull of the customer
Involve and empower employees (there is no better source of insight than the employees who are performing the work)
Continuously improve (kaizen) in pursuit of perfection
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Note..
It is a systematic approach to drive customer satisfaction and operational excellence
Be flexible and vary the approach depending on your organisation’s culture
It is a journey / endurance race for continuous learning and improving top & bottom line
It requires leadership, discipline, and buy in on lean philosophy
Process improvement and people development must go hand in hand
It is on the job, real time learning & training
Lean is 20% Technical and 80% Behaivioral
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Challenges
Viewed as technical transformation (not cultural transformation)
Looked upon as “One-size-fits-all” approach
Lack of commitment and understanding of effort required by “C” Level and All Levels
Most organisations never get deep enough into the lean process to achieve true success
Focus on departments rather than value streams
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Internal Challenges
Gap between enterprise resourceplanning (ERP) and factory floor
Incompatible and Inconsistent systems
Lack of timely informationto make informed decisions
Lack of strategy to unify information across manufacturing
Lack of funds and/or lack of perceived value
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Best in Class – Strategic Actions
Improve processes that manage the flowof material and information
Lean Initiative
Optimise performance atIndividual plants and factories
Drive standards and consistencyAcross Global manufacturing networks
Improve Sales and OperationsPlanning Processes
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Improvements from Lean Implementation
Adapted from: National Productivity Review, Industry Week, Deltapoint Actuals
Total Cycle Time
Revenues
Inventories
Invisible Inventories
Blue-Collar Productivity
White-Collar Productivity
Availability
Scrap
Delivery Lead Times
Time-to-Market
Return-on-Assets
20 40 60 80 100
Ranges in % ImprovementBest Practices from Actual Cases
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Lean Transformation – Implementation
Implementation
What are the key lean principles and practices?
How do I transform myenterprise to lean?
How do I assess my progress?
Process / Checklist
Enterprise Level Roadmap
Enterprise Transition to Lean
Lean Enterprise Self Assessment Tool
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Lean Transformation - Enterprise Approach
Information Technology
Certified Suppliers
Uncertified Suppliers Warehouse
Sales & Marketing
Warehouse
CustomersCustomer Service
Accounting
Engineering
Human Resources
Factory
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Enterprise Level Roadmap – High Level
Entry / Re-entryCycle
Adopt Lean Paradigm
Decision to pursueEnterprise Transformation
EnterpriseStrategicPlanning
Long Term Cycle
Focus on theValue Stream
Develop Lean Structure &Behavior
Create & RefineTransformation Plan
Focus on ContinuousImprovement
Implement Lean Initiatives
Initial Lean Vision Lean Vision
LeanTransformation
FrameworkShort Term Cycle
DetailedCorrective Action
Indicators
Outcomes onEnterprise
Metrics
EnvironmentalCorrectiveAction Indicators
EnterpriseLevel
TransformationPlan
+
Source: MIT – Lean Aerospace InitiativeLean Impact
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Enterprise Level Roadmap – Detailed
Scan theenvironment
Segmentthe market
Define leadershiprequirements
Create leadershipstructures
Define policies,objectives, targets
and budgets
Communicate!Communicate!Communicate!
Play catchballwith deployment
teams
Play catchballwith action teams
Use reliable,scientific methods
at all levels
Discover/correct performance
variances
Perform corporatediagnosis withtop Champions
Assess/analyseperformance
Capture learningand make it
replicable
Re-vision yourstrategy -- again
Renew yourbusiness – in
real time
Use advancedplanning methods
CelebrateSuccess!
MissionStatement
Values Statement
VisionStatement
P/OMatrices
FocusTeam
Charter
Kickoff
Promotion
P/OMatricesDeploy-ment Plans
P/OMatrices
Action Plans
PlanSummary
CEDAC
P/OMatrix
Phase II: PilotPhase I: Plan Phase III: Deploy Phase IV: Integrate Phase V: Excelbusiness renewal strategy re-vision vision deployment implementation/adherence strategy re-vision
Create mission;establish values
Envision the future
StudyMissions
MarketStudies
Product/MarketMatrix
TechnologyRoadmaps
CorporateDiagnosis
Develop-mentPlan
Relation-Ship Map
Organi-graph
Target/means
Analysis
Finalise policiesand budgets
Target/Means
Analysis
Target/Means
Analysis
CEDACJIT
TPMCE
Newsletter
Website
ProgressTables
Site Visits
CEDAC
5 MinuteMeetings
WeeklyMeetings
MonthlyMeetings
StudyMissions
CreativeThinking
Bottom upPlanning
Strategic Scenarios
GameTheoreticModels
analysis and reflection
business renewal
2003 Productivity, Inc. adC IP0201wc
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Example - Enterprise Level RoadmapS
ou
rce:
Pro
du
ctiv
ity In
c.
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Benefits of Enterprise Level Roadmap
Facilitates enterprise focus
Provides “sequence” for enterprise transformation
Increases understanding of “what went wrong” in previous transformation attempts
Focuses on people/leadership issues
Provides an organising framework for enterprise wide transition
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Enterprise Transition to Lean
Begins with a description of a Top Level Flow of primary activities referred to as “The Roadmap”
Then, provides descriptions of key tasks required within each primary activity
Finally, leads discussion of issues, enablers, barriers,case studies & reference material relevant to eachtask in a common structured framework
Focus on the ValueStream
• Map Value Stream• Internalise Vision• Set Goals & Metrics• Identify & Involve Key
Stakeholders
Source: MIT – Lean Aerospace Initiative
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Lean Enterprise – Self AssessmentSourc
e:
MIT
– L
ean A
ero
space
Init
iati
ve
WhyCommunicate “lean”
enterprise-wide
WhyCommunicate “lean”
enterprise-wide
WhatA “lean” vision
WhatA “lean” vision
HowLearn from successful“lean” implementations
HowLearn from successful“lean” implementations
WhoThe Enterprise Leader
WhoThe Enterprise Leader
WhenFirst step
WhenFirst step
WhereEnterprise-wide
WhereEnterprise-wide
Information Technology
Certified Suppliers
Uncertified Suppliers
WarehouseSales & Marketing
Warehouse
CustomersCustomer Service
Accounting
Engineering
Human Resources
Factory
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Checklist, Process & ProcedureLean Structure & Behaviour
Organise for Lean Implementation (checklist)
Identify & Empower Change Agents (process)
Align Incentives (process & procedure)
Adapt Structure & Systems (process & checklist)
Create & Refine Transformation Plan
Identify & Prioritise Activities (checklist)
Commit Resources (process)
Provide Education & Training (procedure)
Implement Lean Initiatives
Develop Detail Plans (process & Checklist)
Implement Lean Activities (As-Is/To-Be process, checklist)
Enterprise Transition to Lean (process & checklist)
Measure Improvement / Self Assessment / Lesson Learnt (checklist)
Adopt Lean Paradigm
Build Vision (process & checklist)
Convey Need (process & checklist)
Foster Lean Learning (procedure)
Make the Commitment (process)
Obtain Senior Management Buy-in (process)
Focus on Value Stream
Map Value Stream (process & checklist)
Internalise Vision (process & checklist)
Set Goals & Metrics (process & checklist)
Identify & Involve Key Stakeholders (process)
Focus on Continuous Improvement
Monitor Lean progress (process & checklist)
Refine the Plan (process)
Capture & Adopt New Knowledge (process)
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Example – “Lean Structure”
Phase – Lean Structure Behaviour
Outcome – Change Management Plan
Process – Strategic Alignment Top Management support & commitment Sense of Urgency and prorities Stakeholder Involvement Organisational Structure Goals and Objectives Transformation Plan Monitoring and Nurturing
Checklist – Customer need assessment Communication assessment Readiness assessment Training Needs Analysis
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Example - “Change - Checklist”
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Example - “Convey Need”
Phase – Adopt Lean Paradigm Outcome – Build a Vision Process – review (culture, internal & external process, success criteria, stakeholder needs, training needs, case
studies of successful lean implementation, research) Checklist -
WhyCommunicate “lean”
enterprise-wide
WhyCommunicate “lean”
enterprise-wide
WhatA “lean” vision
WhatA “lean” vision
HowLearn from successful“lean” implementations
HowLearn from successful“lean” implementations
WhoThe Enterprise Leader
WhoThe Enterprise Leader
WhenFirst stepWhen
First step
WhereEnterprise-wide
WhereEnterprise-wide
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Example - “Implement Lean”
Phase – Implement Lean Initiative Outcome – Baseline and improvement level using 5 S - Increase productivity, product quality &
safety at work : reduce manufacturing cost: improve on-time delivery Process
Clearout and Classify - Clearing items no longer required : Tagging items that may be required and storing away from workplace Configure - “ A place for everything & everything in its place” Clean and check - Identify cleaning zones, establish cleaning routines Conformity - Roll out across the organisation Culture and practice- Monitor process adherence & continually validate
Checklist – Level Sort Simplify Shine Standardise Sustain
Baseline 0
Unsafe items in work area.
Placement of items causes unsafe conditions.
Spills, waste, trash, etc. produce unsafe conditions.
No methods or procedures documented.
No routine review/correction of unsafe conditions.
Beginner 1
Needed and un-needed items found in work area.
Needed and un-needed items are placed randomly throughout the workplace.
Work area and machines are not cleaned on a regular basis.
Methods of work not completely documented.
Occasional, unscheduled 5S activity.
Basic 2
Needed /un-needed items separated, un-needed tagged.
Needed items stored in an organised manner.
Area and equipment cleaned daily.
Methods of work documented but not consistently used.
5S activities conducted on regular basis.
Visual 3
Red tag area created, all un-needed items removed.
Needed items have dedicated positions which are clearly indicated.
Standard work layout posted and maintained.
Methods of work posted and consistently used by some cell team members.
5S assessment conducted occasionally and results posted.
Systematic 4
List of needed items developed, maintained, posted.
Needed items can be retrieved within (cell target) seconds and (cell target) number of steps.
Daily inspections of plant and area occurs.
Methods of work consistently used by all cell team members.
5S assessment conducted on a regular basis and recurring problems are identified.
Preventive 5
Un-needed items are not allowed in area.
Method for adding/deleting indicators for needed items
Root cause sources of dirt, grease & spillage have been eliminated.
Methods of work are regularly reviewed and improved.
Root causes of problems revealed by 5S assessment are identified and eliminated.
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Example - Value Stream Map
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Lean Building Blocks
ValueStreamMapping
Continuous Improvement
Performance Measurement
Performance Management
Quick Changeover
Standardised Work Batch Reduction Teams
Quality at Source
5S System Visual Plant Layout
POUS
Cellular/FlowPull/Kanban TPM
POUS – point of use storage Source: Techhelp
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Waste Elimination
Source: John Willey & Sons - 2009
97% NVA3% VA
Most Process Improvement Teams Attack this . . .
. . . Achieve this
97% NVA
Typical Value Stream Ratio Value-Added (VA) to Non-Value-Added Activity (NVA)
. .and Ignore thisSource: C. Fiore; Lean Strategies for Product Development, ASQ, 2003
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Reference - Lean www.lean.org www.productivityinc.com www.productivitypress.com www.leanadvisors.com “Building the Lean Machine,” Advanced Manufacturing, January 2000. Fiore, Clifford, Accelerated Product Development: Combining Lean and Six Sigma for
Peak Performance, Productivity Press, NY, NY, 2005. Hamilton, Bruce, “Toast Kaizen, An Introduction to Continuous Improvement & Lean
Principles,” Greater Boston Manufacturing Partnership, University of Massachusetts, Boston, MA, 2005 (DVD).
Insights On Implementation-Improved Flow: Collected Practices and Cases, Ralph Bernstein, Editor, Productivity Press, 2006.
Jacobs, Robert F. and Chase, Richard B., Operations and Supply Management: The Core, McGraw-Hill/Irwin, NY, NY, 2008.
Nahmias, Steven, Production & Operations Analysis, 5th Edition, McGraw-Hill/Irwin, NY, NY, 2005.
Nave, Dave, “How to Compare Six Sigma, Lean, and the Theory of Constraints,” Quality Progress, March 2002, pgs 73 – 78.
Thinking Beyond Lean - How Multi-Project Management is Transforming Product Development at Toyota and Other Companies (Cusumano, M. A. & Nobeoka, K. 1998)
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“To improve is to change. To be perfect is to change often.”
- Winston Churchill
