Believing in Lean culture {align metrics from the start} Where will the “human side” of Lean affect you? Let’s talk about experiences with talking LEAN vs. walking LEAN in Part II.

As is the case with any Lean implementation in a Traditional environment, culture (or more specifically culture change) will be the most difficult obstacle to success. While a company can hire consultants, develop work teams, and even initiate lean initiatives, if the company is just “talking the talk,” the initiative soon becomes just that—talk.

The transformation to a Lean Enterprise is not easy. Top management, though labor driven, must lead the process. Goals need to be set in advance, so everyone is working toward the same future state. The difficulty is that Lean is not the algebra of your parents. More exactly, it is the geometry that he always tried to avoid.

consider this

Our favorite algebra equation is: X+Y=Z The area of ​​a triangle is:.5B * H

Think of the algebra like traditional corporate metrics. On the surface to be simple and straightforward, accepted by the industry, in black and white. Terms such as absorption, capacity, and cycle time should come to mind. In this environment, goals are set that require machines to run constantly to absorb minutes, regardless of the fact that the required product cannot run on those machines. This translates into running unneeded products, consuming valuable material, and increasing finished goods inventory to reduce variances in metrics.

At the end of the month (or at the end of the quarter, at the end of the year), the focus suddenly shifts to inventory levels and an instantaneous inventory reduction is called for. In this mentality, 2-1=1, no questions are asked. People, materials, tools… everything has the same weight.

Now consider our triangle. Here, 2-1 1, the whole is greater than the sum of the parts. Let’s say “B” represents the “tools” of Lean: Kaizen, Jidoka, Heijunka, Kanban, 5S, etc. and “H” stands for our people. Half the knowledge of the tools combined with the full commitment of the people will take you to the area of ​​our triangle, or the true Lean Culture Shift. If you only focus on Lean tools, you will not achieve success. The people part of Lean is more critical.

With Lean metrics, the details are truly simple and straightforward. Measurements such as TAKT (Actual Customer Demand) Based Delivery, Overall Equipment Effectiveness, Inventory Turnover, and Load Level are constantly monitored for continuous improvement in all areas. Inventory does not accumulate without (or by artificial demand). There is no “mad rush” to deliver the product at the end of the financial cycle.

Accounting, the dreaded A word

So here you are. It has sent managers offsite for hands-on training on Lean. You think they come back as Lean experts after just 40 hours of training. You may have even done some general training with your direct labor.

Now let’s get LEAN. By using the 7 waste and 5S guidelines, you immediately see room for improvement. Everyone jumps on board when you project cost savings. Your first project organizing workspaces and connecting disjointed processes is in full swing.

“Did you know that Bob’s machine is down today?” ask the Operations Manager about him. “Yeah, sure it is. We’re ahead of the game on that machine, so we switched Bob over to help with the assembly.” Good response, Lean thinking, cross-training of staff, better operator utilization. “But that machine is costing us money, it needs to work!”…

The A word strikes again. All corporate executives agreed that Lean is the savior of the business. They may have even brought in consultants to educate everyone on LEAN MANUFACTURING. The problem? Lean is not a manufacturing tool, it is a BUSINESS tool, it is a BUSINESS SYSTEM. The manufacturing workforce isn’t the only group that needs to change the way it does business.

There is a solution?

Developing an A3 (business case), with all the objectives clearly defined, is a start. The A3 must follow the PCSAM method (Problem/Cause/Solution/Action/Measure). Remember the 5 keys to Lean initiatives: delivery, quality, cost, safety and morale, when creating a business case (define the problem). Clearly define the current state, identifying the waste in the system (cause). Draw the future state using Rules in use: highly defined work, clear and binary connections and simple and direct (solution) paths. Conclude A3 with actions and measurements, including due dates and responsible parties.

Be upfront with executive management and ask the tough questions, like “Will there be problems if machines are turned off when they’re not needed?” This will determine how many machines you use, how many shifts you schedule, and how big your FIFO or Kanban systems need to be to break even. Perhaps most important is to be prepared to rewrite annual goals to co-exist with Lean initiatives. This should even require the commitment of the executive management to also rewrite the objectives of the company.

Companies that have unsuccessful Lean programs try to measure Lean initiatives with traditional metrics. Lean requires a long-term view, not the standard quarterly test and fix. Executive management must adapt the traditional long term of “1-2 years” to the Lean long term of “10+ years.” There will certainly be short-term impacts, some negative (specifically when it comes to valuations and equity implications). But if you have a long-term plan, those short-term impacts will come and go too quickly to jeopardize corporate performance.

Believing in Lean is critical to success. Traditional metrics can cause conflicts, but metrics are not the only cause. A mentor of mine liked this analogy: there are rabbits, turtles, and foxes. Rabbits learn Lean, live Lean and love Lean. They jump on the process and run with it. Turtles are slow to change. They are patient, maybe even resilient. But once they see Lean in action, they’ll move in that direction and be just as valuable (if not more valuable) than rabbits. The foxes are the ones to watch out for. They pretend to believe in Lean, but they never make the conversion. Foxes talk just to talk. When times get tough, they won’t walk the walk.

There is no magic pill for Lean initiatives. The Lean process requires time, commitment and determination. Companies that cannot imagine long-term commitment to Lean and only use the tools for short-term gain will have limited success. However, without the culture that supports those tools, the Lean initiative will fail and become the “flavor of the week” that everyone knew wouldn’t last.

Albert Einstein once said it best, before lean became a buzz word: “Without changing our thought patterns, we will not be able to solve the problems we create with our current thought patterns.”