Leaders: someone to lean on
This issue investigates leadership ideals and the relationship between leaders and followers.
Issue 12 September/October 2011 www.leanmj.com
In this issue: What a good leader looks like : Alessandro Laureani, Google, shares his idea of the top ten most desirable traits of a lean leader. BIG vs. small : Mark Pulman, IG Doors, talks about the approach of a small enterprise to continuous improvement, and shows why lean isnâ€™t just for big players. Lean doesnâ€™t equal job cuts : Rhoda Avanzado on the lean implementation programme Westminster City Council undertook in the past year, and the difficulties it had to overcome to ensure buy-in. Lean with IT : In our special feature, Malcolm Wheatley explains the difficult relationship between IT and lean methodology, and why things might be changing.
The Lean Management Journal is supported by the Lean Enterprise Research Centre, Cardiff Business School
Dear reader, As I write this letter I’m about to complete my third week as editor of the Lean Management Journal. It may be a short time on the job, but I’m already enthused by the incredible potential of lean to transform even the most unlikely companies. As a non-expert, I find it invigorating to see so many now embarked on operational excellence journeys, both in the UK and overseas, and to speak to so many inspiring professionals. These are difficult times. Manufaturing output in the UK fell to its lowest level in 26 months at the beginning of September, and governments worldwide are drawing up emergency plans to reduce their debt. We have recently seen the US on the verge of default, and several other countries taking drastic measures to improve their financial and economic positioning. There is no doubt that in such a challenging scenario lean has an important role to play, both in business and government environments. However, no change is possible without a strong commitment from leaders towards their workforce, their company, or nation, and their programmes to improve. I am not sure Benjamin Disraeli can be considered a father of lean principles, but he once said: “I must follow the people. Am I not their leader?” In these words lies much more than an act of good will and trust towards those who are led. This quote can be related to a much wider idea of what makes a good leader. A lean leader sets an example, shows the way forward and find ways to include everyone in the struggle to achieve excellence. Google’s Alessandro Laureani shares his thoughts on the traits a lean leader should develop, on page 10. With both industry and government struggling, a culture of continuous improvement and efficiency can bring remarkable benefits. The cuts governments are announcing globally can be an opportunity to tackle waste in all its forms, and increase the presence of lean in non-manufacturing environments. On page 34, Rhoda Avanzado looks back at her experience with lean implementation at Westminster City Council. My predecessor, Jane Gray, has done a tremendous job editing the journal for the past two years. Hers will be big shoes to fill but I look forward to keeping on working on the growth of LMJ, and it is my sincere hope that the journal will continue to act as a beacon for an expanding lean community. Happy reading, Editorial
Commissioning editor – Roberto Priolo firstname.lastname@example.org
Consulting editor – Jane Gray email@example.com
Roberto Priolo Editor Email: firstname.lastname@example.org Tel: 0207 401 6033
Art Editor – Martin Mitchell email@example.com
Designers – Viicky Carlin, Alex Cole firstname.lastname@example.org
In order to receive your bi-monthly copy of the Lean Management Journal kindly email email@example.com, telephone 0207 4016033 or write to the address below. Neither the Lean Management Journal or SayOne Media can accept responsibilty for omissions or errors. Terms and Conditions Please note that points of view expressed in articles by contributing writers and in advertisements included in this journal do not necessarily represent those of the publishers. Whilst every effort is made to ensure the accuracy of the information contained in the journal, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrieval system or transmitted in any form or by any means without prior written consent of the publishers.
S E P T E M B E R / O C T O B E R 2 0 1 1 contents
05 Lean News 06 Leading from a lean perspective
GKN’s Peter Watkins shares his thoughts and experience as an introduction to this issue of LMJ, which concentrates on what it means to be a good lean leader.
Principles and purpose 07 Changing the game in the enterprise
Keith Schorah, CEO of SynGro, explains why it is impossible to achieve cultural change without full commitment by every level of leadership.
10 What a good leader looks like
Alessandro Laureani, global operations processes and systems manager at Google and Lean Six Sigma Master Black Belt, looks at the most desirable traits any lean leader should strive for.
13 BIG vs. small
Many seem to think lean is best suited for big players, but SMEs can benefit from improvement programmes just as much. Roberto Priolo interviews Mark Pulman of IG Doors.
16 Are you ready?
People are the single most important element in any attempt to achieve cultural change in an organisation. Edyta Oborka, industrial performance specialist at Schneider Electric, talks about organisational readiness.
18 How well are you performing?
Looking at the experience of others is the first thing we do when we are learning something new. Mark Knowlton of KPS Ltd. discusses the importance of lean benchmarking.
Process focus 24 Lean sales and marketing
We tend to think of lean as something that is mostly applied to manufacturing operations. However, as Richard Harrison of the Sales Transformation Partnership points out, there are ways to turn other types of processes, like sales and marketing, into examples of operational excellence.
28 History and evolution The history of flow
This chapter of LMJ’s review of the history and transformation of the lean toolset brings you an interesting and surprising insight into the origin of Flow Production, written by Bob Emiliani, Peter Seymour and Pauline Found.
32 Letters and comment
Contributions for this issue come from Rhoda Avanzado, who shares her experience of lean implementation at Westminster City Council; Harry Dunlevy, who talks about the crucial role HR plays in any improvement programme; and Ian Tindle of Sora Group, who gives you his take on lean leadership from the interesting point of view of a training specialist.
38 Special feature Lean with IT
Malcolm Wheatley, IT editor at LMJ’s sister publication The Manufacturer, analyses the difficult relationship between IT and lean, and explains how things are changing. Paul Docherty of i-nexus and Mike Hodge of Cimlogic offer additional comment.
42 Book review
John Bicheno reviews The Puritan Gift, by Kenneth Hopper and William Hopper.
Elizabeth House, Block 2, Part 7th Floor, 39 York Road, London, SE1 7NJ T +44 (0)207 401 6033 F + 44 (0)207 202 7488 www.sayonemedia.com. Lean management journal: ISSN 2040-493X. Copyright © SayOne Media 2011.
04 Introducing the editors
Introducing your editors Articles for LMJ are reviewed and audited by our experienced editorial board. They collaborate on comment against articles and guide the coverage of subject matter.
Professor Zoe Radnor
Cardiff Business School
Dr Keivan Zokaei
Pratt & Whitney Rocketdyne
Lean Enterprise Research Centre, Cardiff Business School
Warwick Manufacturing Group, University of Warwick
More information on our editorial board, their experience, and views on lean is available on the LMJ website: www.leanmj.com 4
Report warns against poor quality of leadership in UK companies New research from talent management consultancy DDI and the Chartered Institute of Personnel and Development (CIPD), UK Highlights: Global Leadership Forecast, reveals that only a third (36%) of UK leaders and one in five (18%)
UK HR professionals rate the quality of leadership as ‘high’ in their organisations. The survey identifies the key leadership skills needed to ensure success in the next three years: driving and managing change, making difficult decisions and executing
organisation strategy. Vanessa Robinson, head of HR practice development, CIPD, says: “UK companies should focus on opening up decision making in their organisation and creating a set of shared and meaningful values for their employees.”
Cardiff PhD student visits lean Chinese SMEs Qing Hu, a PhD student at Cardiff University, is investigating lean implementation within Chinese small and medium enterprises. This summer she visited some Chinese manufacturing companies that are currently implementing lean programmes with one of the top Chinese consultancies. One of the differences from the UK she observed is that, rather than studying customers and customer value, these companies focused heavily on how to improve the
internal management and become more efficient by using lean tools such as kanban, 6S (which includes Safety) and visual management. Discussions are welcomed with anyone from SMEs in the UK who are applying lean, or from companies that trade with Chinese SMEs, to develop a more in-depth study of the differences between Chinese and UK approaches to lean implementation. For more information, contact Dr Pauline Found at FoundPA1@cardiff.ac.uk.
Training specialist OEE launches online training platform Operations improvement specialist OEE is launching a one-hour online Introduction to Lean course in September. The interactive training draws on state of the art learning and development techniques and combines them with the company’s knowledge and experience of
lean. Examples of content from this media rich course include an animated simulation, interactive exercises, quizzes, audio and a video case study. The online training is suitable for individuals or large numbers of staff. It is a cost effective option with lower rates, reduced time away from
work and savings in travel and subsistence budgets. In developing this solution, OEE has responded to customers’ requirements for cost effective courses offering good ROI. Development of the next online course focusing on the Overall Equipment Effectiveness measure is already under way.
Masaaki Imai to come back in the UK publication The Manufacturer. Mr Imai is one of the surviving co-workers of Shoichiro Toyoda and Taichi Ohno, the deviser of the Toyota Production System. His experience and knowledge will provide unique, priceless insight into the secrets of lean.
If you have any news that you think would interest and benefit the lean community please let us know. Send submissions to the commissioning editor Roberto Priolo: firstname.lastname@example.org
Regarded as the “father of Continuous Improvement” and often nicknamed the Lean Guru, Masaaki Imai will be a keynote speaker at The Manufacturer Directors’ Conference 2011, to be held in Manchester on November 8-10 and organised by LMJ’s sister
Leading from a
lean perspective Peter Watkins, global lean enterprise and business excellence director at GKN, introduces this issue of the Lean Management Journal, which looks at leadership as a fundamental part of any attempt to deploy a continuous improvement programme and to achieve cultural change. I remember the first time I took on a team leader position. I brought in a book on team working and tried some team building methods during meetings. However, as I soon discovered, you don’t magically turn into a lean leader overnight, and there is no book with the straight answers to your many questions. The one teaching I have treasured over the last 20 years as a leader is that you never stop learning. During the early 1990’s I was working for a company that had successfully embraced the concept of Employee Involvement (EI). Several EI teams were set up and started to make small improvements every day by using a combination of the Twenty Keys framework (based on Koyabashi Lean factory implementation) and a leadership philosophy based on getting employees at all levels engaged and involved. The ‘White shirt’ leadership philosophy (developed by Sean Wright, vice president of Kaufman Global) originated from giving a new white shirt to a press operator in an old, dirty and unproductive car wheels factory. Each time that the white shirt was found dirty, leadership would ask him: “Why is your white shirt dirty?” The issues people highlighted and the explanations they provided leaders with were used to see opportunities for improvement and to fix problems together. The aim of ‘White Shirt’ lean leadership was to create and sustain a culture of continuous improvement where people want to come to work and they take pride in their own success, and their company’s.
One of the biggest barriers to successful lean leadership is the balance between leaders who focus on managing tasks in work processes rather than setting behavioural standards and developing their core skills to coach, give constructive feedback and recognition. The common thread of applying behavioural standards and core skills suits leaders at all levels of the organisation as they support the leaders below them. However, different levels of leadership also require different focuses. In particular, executive leaders should drive directional focus for connecting strategy to tactical plans; middle management should ensure process execution, redesign and problem solving; and team leaders should develop standard work and coach using PDCA for small daily problem solving and process improvement. Over the last six years, the GKN journey to create a culture of continuous improvement has helped to drive the need for a change in leadership style. Recently, all of the senior management in GKN started on the Future, Engage and Deliver framework developed by leadership coach Steve Radcliff. Aimed at making leadership simple, it builds on the premise that if we want to grow our leadership we need to talk to people about it. And how often do we talk about our leadership to others? E N D
Changing the game in the enterprise Keith Schorah
Changing the game in the enterprise
P rinciples and
Arguably, however, achieving lean operations is not a short term cost reduction programme, but rather a continual process of improving and reshaping the way a company operates.
For example, many manufacturers have implemented lean manufacturing programmes achieving significant efficiencies but they still suffer from â€œsilos of knowledgeâ€?, such as overdependence on long-established members of the sales or production teams, within the organisation. In this scenario the business remains open to substantial risk.
Keith Schorah, chief executive officer of SynGro, talks about the importance of listening to the customerâ€™s requirements to achieve cultural change. But reshaping the business around the voice of the customer is not possible without a clear commitment from the CEO as well as the board.
n the current economic climate, businesses providing products and services are under unprecedented pressure to make year-on-year profit while reducing costs. However, organisations can only go so far with efficiencies. To increase revenue and create differentiation they now have to add value. By developing a clear insight into their customers, organisations will be able to enhance their service provision and create improvements in their service delivery. Using customer insight to drive improvement actions and identify additional revenues with customers is an opportunity businesses cannot afford to miss.
By using customer insight to drive the process, organisations will focus their business on prioritising issues and take advantage of new opportunities, whilst ensuring they do not lose customers. This takes a long-term perspective and perseverance. A lean organisation understands customer value and focuses its key processes to continuously increase it. The ultimate goal is to make the organisation customercentric with the business perfectly aligned to ensure the customers are loyal and that the organisation is able to service them profitably. To accomplish this, lean thinking changes the focus of management from optimising separate technologies, assets, and vertical departments to optimising the flow of information and insights through entire value streams that flow horizontally across technologies, assets, and departments to customers. As a result, to develop a more profitable and stable customer base, large organisations need a more sophisticated enterprise-wide view of its customers, based on information and insights gleaned from all different points of contact with the customer (purchasing, delivery, sales, etc).
Using the next generation of customer experience platforms - such as Voice of the Customer (VoC) programmes - as a strategic tool to drive change, organisations can manage their customer retention, operational efficiency and increase productivity because the breadth of business functions involved in understanding and reshaping service to the customer base is widened. Any potential customer issue isnâ€™t confined to a particular silo, like sales or technical support that can reassure an unhappy contact at a customer. Most importantly, senior management has to act on this compelling information. Tools such as the Voice of the Customer hub offer organisations the process and system of required sophistication to capture the sufficient quantity of feedback across any type of channel, and combine it with operational and financial data to enable sufficient insight that will allow the business not only to identify trends in customer satisfaction, but critically to understand the cause of the issue, adapt the way it does business to permanently improve customer experience and operational efficiency.
Changing the game in the enterprise Keith Schorah
It is essential, however, that the ownership for the Voice of the Customer programme lies not only with the board of directors but directly in the hands of the CEO, who must ensure full department participation in setting up customer insight programmes and commitment to act upon customer feedback, with the aim of creating more value in the customer’s mind. The CEO has to be the instigator, sponsor and the driver of changing strategy across the organisation towards a more customer-focused approach, focused on better insights into the customer base,
The role of customer satisfaction has evolved from a marketing specialism to one which is inextricably tied to developing a corporate strategy that is interacting with an organisation across all levels and business processes, because it is drawing on detailed and wide-ranging market and customer insight. Such transformation demands cultural as well as process changes. With leadership and ownership from the very top of the organisation, the Voice of the Customer programme has the ability to transform enterprise culture, ensuring the customer and their satisfaction are positioned at the very centre of the organisation. E N D
P rinciples and
delivered through sophisticated customer feedback programmes. This will help board level executives to manage risk better, understand how resources can be arranged to better support them, change processes as necessary and prioritise actions to deliver these changes.
SynGro specialises in enabling large organisations to increase their customer loyalty, retention and profitability by capturing, managing and driving action from a Voice of the Customer programme. By capturing the Voice of the Customer whether it is direct, indirect or inferred across any channel and combining it with clients’ operational systems and data, SynGro helps clients to evolve their customer engagement and create a customer centric culture. Focused on the enterprise sector of the Voice of the Customer market, SynGro’s key clients include Stora Enso, OutoKumpu, and Heineken. SynGro’s clients capture real-time customer feedback across web, mobile, call centre and face to face channels in 61 countries and 40 languages.
To develop a more profitable and stable customer base, large organisations need a more sophisticated enterprise-wide view of its customers, based on information and insights gleaned from all different points of contact with the customer
As a result, experienced and highly knowledgeable but arguably under represented personnel such as finance and supply chain teams – with unique insight into their industry’s relationship with customer - become involved. This breakthrough enables wider and more effective collaboration to address and resolve customer problems.
What a good leader
It is a leader’s responsibility to make change happen. Careful analysis of business processes and needs and the ability to nurture employee engagement are a must, but there are myriad traits which can make a successful leader and more than one way in which they can be shown. Alessandro Laureani, global operations processes and systems manager at Google, explains.
hen asked what the most significant obstacles to the deployment of a continuous improvement programme are, most professionals in the field, according to a survey done by Kausman and Lane in 2008 for an Accenture white paper on the subject, list the following five: ‘fire fighting’; lack of leadership support; difficulty in maintaining momentum; pushback by the organisation; and lack of available resources.
Leadership, although explicitely mentioned only in the second point, is the common denominator in all these issues: it is leadership that assigns resources, prioritises targets and pushes through resistance. A particularly good definition of leadership was given by House, Javidan and Dorfman in 2001: according to them,
leadership is “influencing, motivating, and enabling others to contribute toward the effectiveness and success of the organisations of which they are members”. Most of the literature on leadership can be organised within the following five theories: 1. Behavioural theory: identifies two clusters of behaviours by leaders: people-oriented and task-oriented. 2. Contingency theory: states that effective leaders adapt their styles to the situation. 3. Competency theory: tries to identify the characteristics of effective leaders. 4. Implicit leadership theory: states that the importance of leadership is inflated. 5. Transformational theory: states that leaders create and communicate a vision.
W hat a good l e ad e r looks lik e A lessandro L aureani
Over the years, various different traits of a leader have been identified, as summarised in the table.
Ambitious for the organisation, not themselves
High-level of control
Relies on inspired standards, not charisma, to motivate.
Challenge the status-quo
Service above self
Transparency & Disclosure
Climate of Trust
Manage by Exceptions
Value - centered
Facilitating dialog & deliberation
Protecting & Valuing divergent views
Figure 1: Leadership’s traits Which ones of those leadership traits are more conducive to the successful deployment of a continuous improvement programme? In my experience, the top 10 traits for a leader of such a programme are:
P rinciples and
Challenge of the status-quo: ‘Status quo, you know, that is Latin for the mess we are in,’ said Ronald Reagan. Clarity: setting a clear goal for the organisation, and making it relevant to each person in the organisation. Consistency: maintaining a strong set of values, living by a certain code of conduct, without appearing to be one thing to one group of people and something else to a different set. Facilitation of dialogue and deliberation: engaging the employees in setting the goals themselves, without imposing them from the top. Flexibility: being open, adaptable and resilient. Global perspective: translating the goal(s) in something meaningful for each region, according to local customs. Goal orientation: remaining focused on the goals set, despite the outside ‘noise’.
Open-mindedness: being willing to move out of his/her comfort zone. Quiet determination: having the resolve to reach the goal, without being outspoken or loud about it, working towards the goal almost unnoticed. Reliability on inspired standards, not charisma, to motivate: gaining the respect of the staff and their engagement not from personal charisma, but for the standards and examples set and lived up to. However, the right traits of leadership are merely aspects of a successful deployment: research shows an inextricable link between leadership and commitment at the basis of the success of a quality improvement programme. Unwavering commitment to quality programmes by top management is fundamental for embedding them in the organisationâ€™s culture, allowing management to overcome the initial scepticism by the employees at large, as already identified by Juran in his seminal book on leadership for quality. But it has to be the right kind of leadership engagement. Successful leadership in lean six sigma transformations shows the following characteristics: Visibility: no oneâ€™s going on a journey... unless they can see their leaders firmly in the front. Inspiration: the vision offered has to be exciting at a personal level for the employees. Realistic: nothing alienates as quickly or as deeply as the sense that the expectations of senior management are out of step with business realities facing frontline staff. Targeted: some parts of the business will need more attention than others in order to overcome resistance. Consistency: a continuous improvement programme will have to overcome various obstacles and setbacks to last long enough to genuinely change the organisation.
The above characteristics are necessary, but not sufficient: overall, lean six sigma deployment needs to proceed hand in hand with cultural change, to avoid falling into the same traps as Total Quality Management did in previous generations of quality improvement programmes. As Kausman and Lane identified in their 2008 white paper, different leaders have different styles, and there are other factors affecting the success of a CI programme, such as finding the right people in the organisation, training them, giving them the necessary resources to do their best. However, when looking at successful deployments, the 10 leadership traits and five leadership engagement characteristics mentioned above embody the type of leadership that stands out: visible to the entire organisation, inspirational as a vision, realistic as a programme, targeted to the area of strongest resistance in the organisation, and consistent through the highs and lows that any continuous improvement programme will inevitably face. E N D
B I G vs small M ark P ulman
It is a common misconception that there is greater scope for lean thinking in larger companies than in smaller ones, and that itâ€™s the bigger players who are better positioned to deploy effective programmes thanks to the resources they have access to. Roberto Priolo interviews Mark Pulman, managing director of IG Doors, a small enterprise that is reaping the benefits of lean implementation, and finds out that size doesnâ€™t always matter.
P rinciples and
RP: What were the biggest challenges that you faced at the beginning of the deployment of your lean programme? MP: It was the very fact that we are a small company operating in a very competitive market. Getting lean going required effort from a number of people throughout the organisation, and we clearly had resource issues. In the early days, it was also difficult to get the commitment from people to want to participate in lean: they felt they were too busy and some of them, especially workers on the shop floor, saw lean as a threat to their job. One of the biggest challenges what getting people on board, and making them realise it was a means to making things easier, to become more efficient. We quickly won new business, and didnâ€™t lose anybody as a result of lean.
Roberto Priolo: How did you start your lean journey? Mark Pulman: We are a fairly small enterprise and that is the context in which we manage lean. When we first started we went to see a number of very big lean businesses. It was obvious that they were lean from the minute you walked in. There were boards on the walls and all sorts of things throughout the building that made it obvious that it was a lean site. If you walk into our business, even now, it perhaps would not be so immediately obvious. What we have done is taking out of lean what we needed for our small business environment, and embedding it with our people, rather than going down the track of the big visual approach that larger companies tend to take.
Subliminally, we have done lots of things like 5S and value stream mapping, but we haven’t imposed these on people as a part of lean . We have taken the tools and we have instilled them into them, so that they are now using them as part of their every day processes
RP: What were the first steps you took to deploy the programme and how long did it take you to fully deploy it? MP: The first thing we did was sitting down with SA Partners, and coming up with a plan of the biggest issues in the business. We strategically reviewed the business and, because of our resource issue, we decided to divide the programme in chunks and tried not to do too much too early, concentrating on the things we thought would give us the biggest benefits. As we did that and we deployed the programme, people began to realise the benefits and as they became more evident, more and more people came on board. It’s important to say that we have never really promoted lean as a project: we never went to people and said, “This is going to be a lean enterprise”. We purposely did that because people had seen lots of initiatives like this come along in the past and we were afraid their reaction would be, “Oh no, not another initiative”. We just promoted the programme in terms of looking at the business and finding ways to apply the tools SA Partners offered to improve things. Subliminally, we have done lots of things like 5S and value stream mapping, but we haven’t imposed these on people as a part of lean. We have taken the tools and we have instilled them into them, so that they are now using them as part of their every day processes. If you went talking to our people and ask what they think about the company’s lean programme, they wouldn’t know what you are talking about. But if you asked them about the improvements in efficiency and other results that lean brought, then they would be very much aware.
B I G vs small M ark P ulman
RP: What are, in your opinion, the advantages larger companies have in implementing lean? MP: They have people who are fully employed to implement lean, they have lean champions, and it is their job to drive lean through the business. Small companies can’t afford to do that. Bigger players have the resources to ‘attack’ projects in a more aggressive way, to accelerate some of the things we did.
RP: Do you think it’s important to go one step at a time when implementing a lean programme? MP: Absolutely. You have to proceed at the pace that your business can stand. If you try to accelerate, you turn people off and lose their commitment. What I am finding now is that the workforce is excited by the fact that they are able to see opportunities to improve business, and that there is no need for me to drive it any longer because it’s been driven by the people further down in the organisation, which is great to see. We haven’t had a huge number of lean champions, probably just a couple of people in the business that you would describe as such. When we first started, I was worried we would need a lot of training, but in reality that wasn’t the case. We only have a couple of people that are really on board, all of the technical staff, and from them we have been able to instil in the other people in the business the principles. E N D
P rinciples and
RP: What is the role of leadership in all this? MP: Many companies struggle with their programmes because leaders aren’t committed enough. I’ve seen businesses running lean in departments or in small parts of the organisation, but doing so without the commitment of the board, which is crucial. I think larger companies are more vulnerable to this issue: you often see production people desperate to run
I think you have to be very structured in your approach, and patient, particularly if you are a small business. It is important to do things in a strategic and sequential way, and recognise you are putting the foundations to be able to get the results as things unfold, and that takes time. It took four years for us, the first three of which haven’t been spectacular. It is in the last 12 months that we have really started to see progress, thanks to the preparation work we’ve done before.
RP: How did the shape of the IG Doors change after the lean programme was deployed? MP: Our weekly output grew 33% and, most significantly, we doubled our operating profit.
lean through the production department and struggling to do so because lean is not implemented as a global approach and there is lack of commitment in the rest of the company. We have implemented lean across the business, not just in production, and this has had a massive impact.
RP: Do you think one of the reasons why many attempts to deploy lean fail is that many companies tend to make it too theoretical? MP: I absolutely do. Our approach has being very hands on, letting people use the tools as and when they can apply them. It’s being a very low key implementation, but very effective. We’ve been doing it for about four years, and think lots of people within the organisation would recognise that the whole organisation has become much more aware of waste in all of the aspects that lean would point to, but they wouldn’t necessarily associate this with lean. It has gone into the blood and guts of the business and the effect has been dramatic.
Are you ready? Edyta Oborka, industrial performance specialist at Schneider Electric, looks at organisational readiness for change, and explains why the people involved in the process are the single most important element to any change implementation programme.
continuous improvement strategy is crucial for a business to stay competitive. But achieving greater efficiency, cost savings and quicker response times requires the effective involvement of people. The improvement techniques and methodologies available to companies are comprehensive, but organisational and people readiness for change remains a problem for many. Employees are the heart of an organisation and they influence the nature of a change management process. Through their own behaviours and values, they shape the company’s culture, and influence the success or failure of change initiatives. Culture strength reflects in an organisation’s readiness for improvement, such as the application of a lean methodology. In order to be successful, lean has to be integrated within a company’s business strategy and involve everybody from top management to workers on the shop floor. It is not just about tools and techniques, but also about people; it is not about delegating but about contribution and team working. To become lean a company has to teach its employees to think and behave in a lean way.
Global corporations often deploy large-scale improvement strategies without considering their level of cultural readiness. Small and medium sized enterprises (SMEs) are, on one hand, fascinated by examples of successful lean implementation worldwide, and overwhelmed on the other.
As the market is getting more competitive and customers more demanding, the boundaries of lean implementation are pushed further. Today, low volume, engineer to order (ETO) manufacturing organisations aspire to deploy lean. The uniqueness of a product or solution highlights the business’ flexibility on one side, but requires additional skills, high reliance, dependence on people on the other. It doesn’t really matter if an organisation is a slave or an enthusiast: a well-developed organisational culture is required to make changes and reap the consequent benefits, to convert improvement activities into constructive results in any type of business, whether a large organisation, small manufacturing business or ETO manufacturer.
A r e y ou r e ad y ? E dyta O borka
Lean is a universal methodology, but, looked at from another perspective, it is adaptable to the unique features of an organisation and its environment, and people. Knowledge of tools and methodology constitutes a comparatively small percentage of the efforts required to implement lean successfully. Considerable effort has to be put into soft skills too. Lean is about people and their capabilities and involvement, and these factors have to work together to make change happen. At present and in most cases, regardless of the type of organisation, the ambitious plans of continuous improvement, change management and cultural change are designed without the necessary involvement of employees, with high expectations for their performance and a low understanding of their readiness.
Employees’ resistance to change impairs the successful and quick implementation of change processes. Much of the challenge in successfully managing change lies in helping people to overcome their resistance. Operators’ active participation can be difficult to achieve and manage, and modifying the way people work is clearly the biggest challenge facing an organisation that wants to become lean.
Each organisation is characterised by the uniqueness of its own culture. Any cultural development programme has to be individually developed by the organisation and employee participation at this stage
Even though there is no standard definition of the elements that create a background for successful change, the following list below defines the characteristics it must have. On a strategic level, the organisation should deliver: unambiguous mission and vision; empowering motivational systems; straightforward systems and processes; support for innovation; On an operational level, change should be supported by: inspirational leadership; team working with a ‘can do attitude’; clear communication systems; fair conflict resolution systems; Finally, on a functional level, it is necessary to have: committed, adaptable employees with a positive attitude towards change. The competitiveness of a business relies on the competitiveness of its own resources: a strong culture, building on the alignment of employees to the company’s organisational values, provides for a background for successful change. The understanding of a company’s own culture and the gaps within it, and the need for improvement have to be considered both a starting point and a long-term plan for successful and competitive improvement strategy, something every company needs if it is to compete in the market. E N D
P rinciples and
What should we focus on to be ready for a change?
Any change implemented without a welldefined cultural background will end up requiring rework, consuming more resources than it should and in most cases not paying back as expected. This is a risk many companies are unaware of: they implement change without an accurate understanding of the organisational culture and the gaps within it.
Organisational inclination for change and people readiness are equally important to revolutionise a company. To make this transformation work, employees have to be an active part of it; they have to feel responsible for it and, most importantly, they have to understand it and see the benefits it can bring.
is pivotal. An understanding of the cultural gap and of the improvement actions required is also key to success, as a strong cultural development can guarantee the success of further change implementation.
Why are people so important to an improvement process?
How well are you
Mark Knowlton is the director of KPS Ltd., a specialist in providing support to companies undertaking improvement programmes through the deployment of lean principles, and the founder of online business improvement tool LeanBenchmarkâ„˘. In this article, in which he reports on the experience of several organisations, he explains the importance of lean benchmarking and the great impact it can have on a companyâ€™s plan to achieve excellence.
s turbulence in the economic and business environments continues, organisations across many industry sectors are faced with fierce competition, shrinking operational budgets and reduced profit margins. The public sector too has been tasked to deliver greater value for tax payers, with the governments spending review in October 2010 stating that departmental budgets will be cut by an average of 19 per cent over four years. The pressure on leaders and their teams to find more innovative ways to improve performance continues - no surprises there, but how are the more enlightened organisations facing up to this challenge? And, more importantly, where do they start from?
Benchmarking is widely recognised as a systematic process for identifying and implementing best practice, or in simple terms it is about learning from the experiences of others. Comparing performance with organisations in either similar or dissimilar sectors enables individuals and teams to develop improvement plans and adapt specific best practices, usually with the aim of increasing some aspects of performance.
H ow w e ll ar e y ou p e rformi n g ? M ark K nowlton
Benchmarking may be a one-off event, but is often treated as a continuous process in which organisations continually seek to improve their practices. Many of us are regularly benchmarking on an informal basis during normal day to day life. We do this unconsciously at work or at home where we learn by comparing our behaviour and practices with colleagues, peers, and experts within our network. Formal benchmarking takes a more structured approach. There are two main types of formal benchmarking:
performance benchmarking and best practice benchmarking. Performance benchmarking compares the performance level of a specific process to identify opportunities for improvement. Best practice benchmarking, which is considered the most powerful type of benchmarking, is searching for the best way or solution by studying other organisations that are high performers in a particular area of interest (lean, for example). Benchmarking establishes the performance gap and opportunities for improvement. Improvement teams can compare performance either by visiting an exemplar organisation or through online web based tools such as www.leanbenchmark.org
P rinciples and
Figure 1: Example of results compared to a specific sector and all sectors.
Lean benchmark takes this tried and tested method and applies it to a Lean Competencies framework covering leadership, customers, empowerment, communication, processes, plant, equipment and supply chain.
Origins of benchmarking It has been around for over 20 years and is recognised by experts and leading organisations all over the world as a vital ingredient for sustainable, long term business success. Xerox Corporation is credited with originating the practice of benchmarking. The chief executive, David Kerns, defined benchmarking as “the continuous process of measuring products, services, and practices against the toughest competitors or those recognised as industry leaders.” Robert Camp, the logistics engineer who initiated Xerox’s benchmarking programme and who is generally regarded as the guru of the benchmarking movement, offered an even simpler definition. “Benchmarking,” says Camp, “is the search for industry best practices that lead to superior performance.” Camp developed a very structured and thorough 12-stage approach to benchmarking which can be summarised as follows:
1. Select the subject of focus 2. Define the process 3. Identify potential partners 4. Identify data sources 5. Collect data and select partners 6. Determine the gap 7. Establish process differences 8. Target future performance 9. Communicate 10. Adjust goal 11. Implement 12. Review and recalibrate.
A recent study conducted by the Global Benchmarking Network highlighted current and future trends for 20 popular business improvement tools. The research covered 450 responses across 44 countries. Over 60 per cent of respondents stated that the main reason for benchmarking was to improve performance. Other drivers included the need to address specific strategic challenges, improve financial performance or to learn how other organisations have developed new products or gained a shift in organisational culture. Interestingly, lean was one of the improvement tools that was analysed within research study and, whilst identified as “above average” for effectiveness, it was ranked within the bottom five in terms of future adoption. Respondents considered performance benchmarking, best practice benchmarking and informal benchmarking as the most desirable improvement tools for future adoption (you can access the full report at www. globalbenchmarkingnetwork.org).
Lean benchmarking in action
Essentially, lean benchmarking provides a ‘snapshot’ of current performance compared to other organisations. The resulting gap analysis clearly highlights the future potential and the most appropriate focus for improvements to increase performance and operational productivity. Philipp Schuell, a lean specialist at Trumpf GmBH, used lean benchmarking at SPI lasers, a UK company the group acquired in 2008, and claimed it highlighted a number of benefits to their organisation. He says: “The benchmarking exercise gave us independent feedback on the status of our lean implementation, it also allowed
H ow w e ll ar e y ou p e rformi n g ? M ark K nowlton
us to compare and highlight strengths and weaknesses with others in the lean community and analyse our current status.” Schuell went on to describe what was learned from the lean benchmark report: “The gap analysis offered useful suggestions for improvement projects. The assessment also focused on cultural and organisational transformation rather than just the individual uses of lean tools.” Ailsa Kaye, managing director at Onsite Insights, which has been delivering best practice visit programmes for over 10 years, says: “Benchmarking and sharing best practices between companies has proven highly successful in improving productivity and performance. An independent survey undertaken by the DTI on Inside UK Enterprise showed that each year the visit programme delivered £135m in improved productivity.” Genzyme, one of the world’s leading biotechnology companies, used lean benchmarking at its UK facility as part of its lean transformation programme. Lesley Coombes, lean transformation manager, explains: “The benchmarking process has enabled us to consider how well we are doing and where we need to focus next. It wasn’t just about seeing how well our score compared
P rinciples and
Lean benchmarking provides a ‘snapshot’ of current performance compared to other organisations
to others (although obviously this was very interesting). The recommendations within the report meant we could identify what we needed to do next. We have now started to build our lean road map with lean objectives linked directly to the business’ goals.”
Whilst lean has its origins within the manufacturing industry, it is now being applied successfully across many servicebased sectors including healthcare. Progressive NHS hospital trusts have lean transformation programmes covering clinical activity, support functions and back office administration. Dr. John Coleman, director of Alturos Ltd, a specialist in providing support to companies going through transformational change, has used lean benchmarking as part of the framework with which the company develops lean projects with clients. Dr. Coleman notes that there are two, immediate benefits of lean benchmarking: the first is the strategic view of ‘where to start in lean’ (in this sense a benchmark helps the senior management team assess the organisation’s readiness and highlights key areas for development, particularly the vital areas such as leadership and organisational culture for lean 5), the second is represented by operational and tactical views. A lean benchmark will help operational staff create specific measures for Plan-Do-Study-Act cycles, and so gauge the degree of success of improvement projects. In particular, Alturos often applies benchmarking during its initial Change Agent training programme with clients. Dr. Coleman concludes: “It is important to understand the different perspectives people have as to where the organisation is on its lean journey. This helps us adapt our approach accordingly. We encourage teams to develop their views until they have reached conclusions, based on data such as benchmark results and having
H ow w e ll ar e y ou p e rformi n g ? M ark K nowlton
Susan Whitaker, who heads up a lean improvement programme for the Bedford Hospital NHS trust, describes how lean benchmarking has contributed to their lean transformation programme: “When starting on a lean journey it is difficult to know how far you have come as an organisation, especially in terms of measuring the impact of lean on the organisational culture, the mind-set and empowerment of staff. A few successful projects do not necessarily mean that lean is embedded throughout the organisation - it may be that we are successfully delivering results on projects but in reality we are only tinkering around the edges with a selected few. Lean benchmarking provides a useful tool for monitoring how far you have travelled on your lean journey. It provides a snapshot at a given moment in time and helps to identify gaps, open up dialogue and refocus on your organisation’s lean or change management strategy and priorities. It is also useful to compare your organisation with others - not that it’s a competition!” Those of us who have been involved in lean transformation for a number of years
recognise that every organisation has its own unique set of cultural and operational challenges. Whilst lean benchmarking is not the panacea for achieving world class performance it can be an effective approach to kick-start a new lean programme, reinvigorate a stalled lean journey or inspire well motivated improvement teams to strive for even greater performance.
A FREE Advanced LeanBenchmark™ account and personalised benchmark report valued at £99 is being offered to the first five LMJ readers to apply. Email email@example.com for a unique online voucher code.
For further information about either individual company of multi site benchmarking contact firstname.lastname@example.org E N D
Various authors, Global Survey on Business Improvement and Benchmarking (Global Benchmarking Network, www.globalbenchmarkingnetwork.org). Mark Knowlton, J. R. Coleman, T.W. Franklin and others, A Mountain Top View of Lean (Conference Paper presented at the 5th Annual International Benchmarking Conference in December 2010 in Kuwait).
P rinciples and
Robert C. Camp, Benchmarking: The Search for Industry Best Practice that Lead to Superior Performance (Milwaukee, WI; Quality Press, 1989).
References for further reading
understood how well lean principles are embedded across the organisation.”
Process focus Lean may be widely used and very popular in production departments, but, as Richard Harrison of the Sales Transformation Partnership explains, there is a chance to adapt it to other processes, like sales and marketing.
Lean sales and marketing
ack in 2009, I attended the Lean Shingo awards ceremony in Nashville, Tennessee, and took the opportunity to talk with other delegates about using lean to improve performance in sales and marketing. Some key observations became apparent very quickly in those conversations: That in the initial stages of lean introduction to a business, sales and marketing were way down the list of priorities for lean awareness training - in fact they were often excluded. That where lean had been introduced into the sales and marketing arena as part of a fully integrated business proposition, it had a major positive impact on performance improvement - often at zero cost.
For those sales and marketing specialists among you who are inspired by the concept of continuous improvement, it is absolutely possible to overlay existing skills and experience with new learning and by adopting the principles of lean, enhance sales and marketing performance. Adapting the lean principles in sales and marketing is as much about delivering added value through effective sales strategy, deployment, leadership, communication, behaviour and engagement, as it is about using tools and techniques developed to enable process improvement - the traditional view of lean.
lean selling and marketing process focus
To adapt the principles of lean within sales and marketing you first need to change the language - to make it more meaningful within these environments. There are five lean principles which provide a high level road map for continuous improvement practitioners to follow.
Lean Principle 1 - Understand what adds value from your customersâ€™ perspective
Often referred to as the Voice of the Customer, this is about really understanding what your customers value (as opposed to your perception of what they value) and, if an existing customer, understanding how you are currently performing measured against their expectations in respect of those values. You also need to understand how you are performing compared to the competition and also versus the people who do it best (often outside of your own sector) - measured against the actual criteria that the customer values. Benefits deliver value and those suppliers who can deliver perceived benefits more closely aligned to customer needs at an acceptable cost/risk will win the business every time.
Lean Principle 2 â€“ Ensure that all the value added parts of the sales and marketing process are integrated
There are always four key drivers which enable an effective sales and marketing process: The ability to generate leads or enquiries of the right type (marketing). The ability to convert those leads into business of the right type (sales). The ability to maximise sales of the product/service offering (sales). The ability to retain customers of the right type (sales). These drivers have specific phases of activity which should be highlighted across the whole process to identify those key steps which add value and those which do not (which generate waste).
Waste removal is usually achieved by undertaking a process mapping exercise, using an appropriate mapping tool, within a poorly performing phase of the process.
For example: Creating lots of costly information around customer surveys and then either not being able to interpret the information or do anything with the insight it provides. Having a sales/customer care structure which is misaligned to the specific needs of the market in which you are operating. Spending lots of time and resource generating leads which are not the right type for the business. Spending too much time with customers of the wrong type. Producing reports that no one ever reads. Multiple levels of sign off.
Lean Principle 3 - Make the offering flow
The key symptoms often seen in a sales and marketing process where continuous flow is absent include: Overburdening of individuals through excessive work load leading to backlogs in specific parts of the process. Unevenness of work related to the variation of the actual work content in the process. Waste, which is non value added work in the eyes of the customers. Once you understand what adds value from the customersâ€™ perspective and have removed the non added value parts from the process, you should re-design the process to enable the smooth and efficient delivery of those elements that the customer does value. For example, if the customer values quotations to be provided within a much shorter time frame, the process should be designed to deliver these in a specified, sustainable manner.
Lean Principle 4 - Only take action at the pull of the customer
The opposite of pull is push and in lean terms trying to push something towards a customer which is not valued is waste. The benefits of adopting this approach are specifically related to work patterns throughout the process in that work is organised only in response to pull from the customer. Specific benefits include: Highlighting issues with workflow including backlogs. Enabling you to align skilled resources to demand. Highlighting opportunities for continuous improvement.
Lean Principle 5 - In pursuit of excellence
This is where every activity undertaken by every person in every part of the sales and marketing process is focused on adding value aligned to the needs of the customer. It is an ongoing process where individuals working within the sales and marketing process are trained to recognise and then remove successive layers of non value added activities as part of a continuous improvement process.
The principles of lean, as well as the tools and techniques, are as relevant to improving performance within the sales and marketing process as to any other business process. What delighted me most about my conversation with the Shingo Award recipients was that these delegates, who had been so inspired to adapt the principles of lean to improve performance, were not all manufacturing and operational specialists, but also senior sales and marketing people. E N D
Subscribe to LMJ today! Subscriptions are priced at ÂŁ200pa Business School student discounts available Subscriber benefits include discounted delegate rates at LMJ and partner events
Contact Benn Walsh (b.walsh@sayonemedia. com) on 0207 401 6033 for further details
history and evolution
The history of
We are used to thinking it was Toyota to first introduce the principles of lean methodology to the world, but we might have to change our minds. Professor Bob Emiliani, historian Peter Seymour and Cardiff Business School’s senior research associate Pauline Found analyse the origins and evolution of flow production looking at the life and achievements of Frank Woollard, the British man who first used it, years before the Japanese car-maker did. His ideas were remarkably similar to modern-day lean axioms.
he central tenet, and third principle, of lean thinking is making customer value, in the form of products or services, ‘flow’ to the customer at the right time, in the right quantity and with the right quality. What we, in the UK, did not know, and this is something that is completely missing from lean timelines, is the role that a British engineer had in influencing this thinking. This article introduces the long-forgotten work of Frank George Woollard (1883-1957), who in the mid-1920’s established flow production in the British motor industry, and its remarkable similarity to current-day production principles and practices used by Toyota Motor Corporation. Frank Woollard’s work makes him one of the early 20th century’s pioneers in industrial management, automation, and flow production.
history and evolution the history of flow
The name Frank George Woollard is one that few production and operations management academics or practitioners have ever heard of, but should know much more about. Woollard was a British mechanical engineer who worked for nearly three decades in the British motor industry in various roles in design, production, and management. He is regarded as one of the fathers of the British motor industry for his major contributions to flow production, progressive management practices, and industrial automation. His innovative work at Morris Motors Ltd., Engines Branch (Coventry), beginning in 1923, enabled the company to grow rapidly and achieve a commanding 34% of the domestic market by 1930. Woollard was educated at City of London School until 1899 and then apprenticed for five years as a mechanical engineer at the London and Southwestern Railway. His first experience with a basic form of flow production was in the manufacture of railway coaches in 1904. Around 1905 he entered the British automotive industry as an auto parts designer. In 1910 he joined a Birmingham-based company called E.G. Wrigley and Company Ltd., a maker of gear boxes, axles, and steering components for various British automobile companies, as chief draftsman. In 1914, he assumed responsibilities as production engineer. He re-organised production from batch to a simple form of flow to meet an increase in orders for vehicle components. William Richard Morris (later, Lord Nuffield), who was the founder and owner of Morris Motors Ltd., became acquainted with Woollard when he worked at E.G. Wrigley. Morris recognised Woollard’s talents in automobile parts design and production and named him general manager of Morris Engines Ltd. in January 1923. With William Morris’s encouragement and financial backing, Woollard immediately led the re-organisation of engine production from batch to flow, increasing output from less than 300 units per week in January 1923 to 600 units per week by December 1923, and to 1,200 units by December 1924. To achieve this remarkable increase in output, he developed an advanced flow production system for low volume production.
histor y and
Woollard’s flow production system was remarkably similar to currentday lean production, and utilised most features of today’s lean tools and techniques. This included (using current terminology): U-shaped cells, multi-skilled workers, takt time, standardised work, Just-InTime, supermarkets, autonomation, quick change-over, etc. As a result, Woollard was able to prove, prior to the Toyota Motor Corporation, that achieving flow in lower volume production resulted in costs that were as low as or lower than that which could be achieved by Henry Ford’s large scale production system.
The major changes in production system design took place quickly, over a period of less than two years. In comparison, reorganisation of Toyota’s engine shop, some 25 years later in the 1950s, took six years - and at half the production volume of Morris Motors.
He was also the first to develop mechanical materials handling equipment known as automatic transfer machines to facilitate flow production, which some 25 years later would become common in the global automotive industry. Overall, his contribution to progressive manufacturing management practices is substantial and comparable to that of Taiichi Ohno at Toyota. His application of flow production beginning in 1923 means that timelines for discoveries and attributions of key accomplishments in lean management must be revised. For example, Kiichiro Toyoda is credited with creating Just-in-Time (JIT) production in 1937, while Taiichi Ohno is credited with inventing “supermarkets” in 1953 to supply downstream processes. These innovations were established and used in flow production by Woollard between 1923 and 1925. Other innovations, such as autonomation, appear to have been discovered independently by Sakichi Toyoda and Frank Woollard. Woollard’s work is important because he was not a technocrat solely interested in using new machines to replace men and increase productive output. He warned people that flow is the objective, and machinery can be helpful but is not necessary to achieve it. He also warned against falling in love with machinery for its own sake. He viewed factory workers as part of the production system, not separate from it, and gave them responsibilities that would have normally been handled by supervisors. He also allowed workers to participate in efforts to improve production processes which was innovative for its time, but was rudimentary and more limited compared to Toyota’s systematic development of workers capabilities post-World War II. Further, he understood that achieving flow in production activities alone was not enough; management and workers must work to connect all processes, from beginning to end, to achieve flow throughout the enterprise.
He clearly understood the idea and practice of continuous improvement in a flow environment, saying: “the virtue of flow production lies in the fact that it brings all inconsistencies into the light of day and so provides the opportunity for correcting them,” and “[the] high visibility conferred on the company’s activities by flow production will lead to unceasing and continuous improvement”. Additionally, Woollard understood that to achieve flow production, management practice had to be non-zero-sum, meaning that workers had to be respected and also benefit from flow production, in addition to customers. He recognised that in order for flow to exist, the interests of key stakeholders cannot be marginalised. Flow must cause no harm; if it does, then material and information will not flow. He also understood and practiced what we today call ‘continuous improvement’ and ‘respect for people’ - the two principles of lean management, and embodied them in his 18 principles of flow production.
history and evolution the history of flow
Woollard’s 18 Principles 1. a) Mass production demands mass consumption. b) Flow production requires continuity of demand.
10. Operations must be based on motion study and time study.
2. The products of the system must be specialized.
11. Accuracy of work must be strictly maintained.
3. The products of the system must be standardized.
12. Long-term planning, based on precise knowledge, is essential.
4. The products of the system must be simplified in general and in detail.
13. Maintenance must be by anticipation – never by default.
5. All material supplies must conform to specification.
14. Every mechanical aid must be adopted for man and machine.
6. All supplies must be delivered to strict timetable.
15. Every activity must be studied for the economic application of power.
7. The machines must be continually fed with sound material.
16. Information on costs must be promptly available.
8. Processing must be progressive and continuous.
17. Machines should be designed to suit the tasks they perform.
9. A time cycle must be set and maintained.
18. The system of production must benefit everyone – consumers, workers, and owners.
It is notable that his work was well publicised in technical automotive production and engineering journals. Papers written by Woollard (1925, 1952) and by Woollard and William Morris (1925) showed their strong desire to share the details of their innovative continuous flow production system with others and to showcase British industrial prowess. Their work was no secret and was readily
available to anyone interested in learning about advanced automobile production methods. The founder of Toyota Motor Corporation, Kiichiro Toyoda, became interested in flow production over a decade after Frank Woollard’s work, and may therefore have been influenced by his lowvolume flow production system. It’s time to think again about the lean timeline and rewrite the history book. E N D
References for further reading
Woollard, F.G. 1954, Principles of Mass and Flow Production. Iliffe & Sons, Ltd., London, U.K. A 55th Anniversary Special Reprint Edition of Principles of Mass and Flow Production was published in 2009 by F.G. Woollard and M.L. “Bob” Emiliani.
Woollard, F.G. and W.R. Morris. 1925. Morris Production Methods: System of continuous flow as applied to mechanical manufacture by Morris Engines (Coventry), Ltd., I. - Operations up to and including those on cylinder block machine. Machinery. The Machinery Publication Co., Ltd., Brighton, U.K. 25 (651), 773-803. First of a six-part series of papers.
histor y and
Woollard, F.G. 1925. Some Notes on British Methods of Continuous Production. Proceedings of The Institution of Automobile Engineers, Session 1924-1925. The Institution of Automobile Engineers, London. XIX, 419-474, 885-890, and Plates XVI to XXXII (Figures 1-26).
Emiliani, M.L., P.J. Seymour. 2011. Frank George Woollard: Forgotten Pioneer of Flow Production. Journal of Management History, 17 (1), 66-87.
a n d
comm e n t
The role of HR Harry Dunlevy, seasoned HR professional and director of HR consultancy Independent, explores the key steps to the successful implementation of lean manufacturing and HRâ€™s role in securing a smooth transition.
ith many yearsâ€™ experience leading HR teams in the automotive industry, the concept of lean manufacturing is certainly a familiar one. Its origins in the Japanese automotive industry, specifically Toyota, focused on the steady elimination of waste as a means to improving quality and production time and reducing cost. Some of the principles applied include continuous improvement, flexibility, production flow, levelling and perfect first-time quality. For many of those coming to lean manufacturing for the first time it is understandable to believe that it is purely a set of principles which once implemented provides a magic solution to productivity and quality of output. However, as life teaches us, few things are that simple and much of the thinking fails to emphasise sufficiently the people dimension. Line managers, engineers and planners can get understandably seduced by the various elements which constitute lean while not fully understanding that it wonâ€™t work without committed well-trained, engaged people. At BMW/Rover in the 1990s, many lessons were learned early on in the introduction of lean manufacturing and HR played a key role in championing, communicating and implementing the transition to lean manufacturing across a multiplicity of factories, products and processes. One of the first lessons is recognising that a change in culture is a key element. The main features of this culture include team working, high engagement and devolved responsibility and are usually in distinct contrast to the command and control style of working common to many traditional organisations.
Employees need to come to terms with a more egalitarian, less hierarchical approach where working together is essential and team leaders have a more informal, but not less significant role. Senior management focuses more on strategy and planning, dealing with the challenge of managing multiple teams, ensuring the skills base and training support is continuously improving and that processes drive productivity. So developing a change management plan where these cultural factors are identified, analysed and addressed and action is taken to deal with them effectively is a cornerstone of successful implementation. From an organisation development viewpoint, lean manufacturing organisation structures are usually distinctive in being flatter and less hierarchical, and therefore potentially more efficient and economic. Support departments such as logistics, finance, engineering and HR act more as service functions to the manufacturing teams. Roles are usually broader and well defined, resulting in jobs needing higher or wider skill bases than previously, with a greater focus on quality and output. In resourcing these roles, talent spotting and the selection and development of good people becomes more prominent. The requirements are for people who are more flexible and highly skilled not just at their own role but also at continuous improvement: these are new for many employees used to traditional organisation models, but at the same time they can be highly motivating for individuals rather than daunting. Attention also needs to be given at this stage to the definition of authority levels with a view to giving the teams as much empowerment as they can handle.
l e tt e rs a n d comm e n t
Some of the action we took to improve understanding was to create joint management/trade union teams and take them on a global benchmarking journey including Japan where they could see at first hand the progress that companies in our sector had made with lean manufacturing. It’s no exaggeration to say that jaws did drop when presented with the reality of what was happening elsewhere. Piloting lean manufacturing in one area of an organisation is an effective means of testing effectiveness and easing in the concept culturally. This can be run for period to evaluate, review and learn from any mistakes made. The benefits can also be realised in a more controlled way and wider roll out adjusted depending on business circumstances.
A tangible reward of successful implementation which needs to be stressed to any workforce involved in such change is greater job security which comes with a more stable, better performing organisation. Employees also enjoy more diverse career options and better progression through the organisation as well as the opportunity to enhance their skill base, which inevitably results in more engaged, productive staff and a more competitive organisation. E N D
HR has to play a key role in communicating the transition to lean manufacturing. The reasons for the change can range from ’beating the competition‘ to the brutally simple message of ‘we have to do this to survive’ and they have to be assembled, honed and delivered in a credible way. Clearly explaining terms like ‘lean manufacturing’ and the rationale behind them is key to secure buy-in from all parties. It‘s true that many such terms have become by-words for job cuts and for unreasonable working demands being placed on employees, particularly in the eyes of many trade unionists. Trade union resistance to lean manufacturing has included giving their own representatives specific training into how to resist or argue against such changes.
Trade unions have also opposed the role of ‘team leader’ within the new structure as they saw it as cutting across their role as communicators and representatives of the workforce. They see it as a way of management by-passing the union and appearing to undermine their power base.
In a leaner regime, investment in training is paramount and this requires developing and presenting the business case and being thorough in researching funding sources such as government grants or regional assistance. Learning and development programmes led by HR may involve classroom or on-the-job learning, e-learning, or a blend. Within such programmes there needs to be an increased emphasis on analytical skills and problemsolving in order to improve quality and output. Utilising different measurement methods, analysing data and applying questioning techniques allows the team to root out process failings or expose issues which impact both factors. The focus is not on creating a blame culture but on actually improving communication and understanding within the team. The use of regular briefings at the start and end of shifts to highlight daily issues, performance statistics and give recognition to team achievements is just one of the positive ways to enhance this.
Lean doesnâ€™t equal job cuts Rhoda Avanzado, acting assistant service manager of licensing at Westminster City Council, sums up the last year and looks at how leadership has affected the outcome of projects in different departments.
t has been a year since we started the implementation of a lean service improvement programme in the Premises Management department of Westminster Council. In the February edition of LMJ, I talked about the strong initial opposition this programme faced from the union, when lean was directly equated with job cuts. We started tackling these misconceptions through delivering successful pilot projects demonstrating that lean was unrelated to job losses. The next stage was to offer a training programme more widely, and we were pleased to see some of the union members signing up. As knowledge of what lean actually is spread, some of the union members became key to the success of the projects we undertook, to the point where we now have trained and engaged staff across the department, both union and non-union members.
However, over the course of several months, I found that the major challenge did not come from overcoming the initial opposition but rather from maintaining the credibility of the improvement programme. Where there are managers or leaders who are not sufficiently committed to success there can be poor delivery of the improvements proposed under the programme. The outcome of a lean project depends as strongly on the leadership as it does on the culture of the team in which it is implemented. I have delivered lean projects with different teams across the department and have more or less applied the same
principles and techniques. Some projects succeeded and others failed. The ones that failed did so because there was no sense of urgency from the leaders to deliver the proposed new way of working. Our good managers embedded the improvement plans in the day to day service delivery. They provided a culture for staff to challenge current processes and influence the way things run. Staff were more engaged as they saw that the changes they proposed were put in place. On the other hand, those managers who never really understood the principles of lean took their time to bring improvements into action. This made staff lose faith and reinforced their belief that nothing really happens with improvement projects. We managed to bring those who were initially suspicious onto our side, trained and enthused them but lost some of them on the final lap of the lean journey because of the lack of leadership. Our emphasis on leadership is increasing as we encourage managers to have a more hands-on approach or drive the implementation themselves. The Council and the Public Sector as a whole are facing a strong drive to reduce costs. Lean is an invaluable tool for finding and demonstrating high efficiency in the provision of service. With Councils merging, the drive to demonstrate that our services are more efficient than othersâ€™ is stronger than ever. The adoption of lean will not cause job cuts: in fact, it will protect us against them. E N D
l e tt e rs a n d comm e n t
Traning lean leaders Having supported numerous organisations through lean change programmes, Ian Tindle, of training and coaching specialist Sora Group, has been in the fortunate position of witnessing good (and bad) practice in the areas of lean leadership and management capability. Here he touches on some of the key observations and challenges that companies should be mindful of with regards to lean leadership.
The management team sets the culture, everyone else simply works within it. No matter which organisation, and which sector we work in - the most common statement we hear is that “morale is the worst it’s been, and the culture needs changing”. This is where the strength of a good leader comes to light, one who can drive direction and set the vision for others to achieve. A good leader knows that their workforce do not set the culture, and that it begins at the top. Weak leadership results in custom and practice setting the culture.
A man who tries to catch two rabbits will end up catching none.
This is a Japanese saying, which refers to the importance of having a clear plan. Strategic thinking is critical for organisations to focus on achieving key objectives: it’s very common to see organisations overwhelmed with KPIs that deliver little or no real benefit to the company when achieved. Good leaders should also be mindful of what the long term direction is, what is a breakthrough objective, and what can simply be described as a routine objective ( for example, what is going to give the company a strategic lift, and what should we be doing as a matter of course). It’s therefore very important to keep objectives very clear and concise. A rule of thumb: consider the “vital few, not the trivial many”.
The frog in the well knows nothing of the great ocean.
This other Japanese saying means you shouldn’t be afraid to look outside your organisation. This observation is relevant for any leader, but in particular those from smaller companies, or family businesses looking towards embedding lean. It is very common to see companies struggle with sustaining lean efforts - this tends to occur when the strategies adopted are greater than the resources available. A good leader should focus on doing the right thing, managers should ensure that things are done right. Industrial tours are often very good at showcasing best practice, but these can cause problems for companies if business leaders simply demand the ‘best bits’ for their organisations.
Traning lean leaders Why, Why, Why, Why, Why.
Root cause thinking is one of the most important attributes in lean leadership. A good leader will ask what, and why, and allow his/her manager to ask how and when. Organisations who are ineffective at root cause thinking often mistakenly believe that they are removing the causes, but in fact they are merely treating the symptoms. In this sense, the best fire fighters are often the best arsonists.
Clarity, Trust and Integrity.
A lot of the above comments can be underpinned by three simple values. A good lean leader consistently demonstrates the following: clarity - being clear with vision, direction, good news and bad can help instil the desired culture in organisations; trust - a good leader will inspire a level of trust; and integrity, something that must be maintained at all times.
How do we train lean leaders?
This is where a lot of failings are commonly observed, and some of the key differences between common and best practice career development become apparent.
Figure 1 36
l e tt e rs a n d comm e n t
Consider this example (fig 1) for the career path of a maintenance professional. We spend a lot of time training the technical skills at the earliest part of the individual’s career, only to see those who are strong technically get promoted up the ladder. This also creates problems where leaders and managers are often called to deal with technical issues at a low level in the company. We then realise that we should provide some form of general management and leadership development, and this is often either too late, or too academic.
Even if we consider the NHS or the education sector, we see examples of the best paramedics or teachers being promoted, without considering the true leadership potential of the staff around them. This doesn’t mean the wrong people are in the wrong positions, but with a change in approach we could provide a 5-10 year head start on the leadership and management journey for staff. E N D
A model for best practice is focusing on the introduction of the key lean leadership and strategy tools at the earliest stages of career development (figure 2), whilst still including the technical skills. Those who are strongest within the area of leadership and management can then move up the company, and those who are the strongest technically can operate at the ‘doing’ level.
Lean with Twenty years after the publication of lean bible The Machine That Changed the World, does the dichotomy articulated by it remain as stark? In other words, are the objectives of lean manufacturing and corporate IT systems diametrically opposed? Malcolm Wheatley, IT editor at LMJ’s sister publication The Manufacturer, reviews the relationship between lean practitioners and ERP technology.
peak to lean purists, and the answer to the above question is usually a resounding ‘yes’. From a manufacturing perspective, they argue, ERP adds no value. Kanbans and pull-based scheduling will – literally – deliver the goods. Worse, they charge, the data-capture processes associated with ERP are positively wasteful. Instead of adding value, employees are wastefully occupied entering data into a system that itself adds no value.
That said, the argument isn’t one-sided. While it’s perfectly possible to work out kanban quantities and frequencies without IT - after all, that’s what Toyota did, over 30 years ago - IT can help to shortcut the process, and make it less labour-intensive. But generally speaking, many IT vendors’ response to lean has been, at least initially, to view it as a necessary evil, retro-fitting lean capabilities to existing offerings, and delivering systems that co-
L e a n with I T special feature
operations of kanbans and pull-based scheduling on the factory floor.
Gradually, however, the tide has been turning. Oracle’s lean execution system now not only supports kanban all the way from assembly operations back to the supplier base, but also includes tools to help manufacturers look at historic demand, and optimise the number and size of kanban cards in the system. Better still, it embraces mixed-mode manufacture, useful in environments that include operations such as stamping, where onepiece flow is not practical.
Microsoft, too, has championed the lean cause, making acquisitions and developing an extensive lean code-base. Microsoft Dynamics AX 2012 is the software giant’s most leanfriendly offering to date, according to Rakesh Kumar, global industry product director of manufacturing for Microsoft Dynamics ERP.
Yet even here, solutions are emerging. Dynamics reseller eBECS advises clients to follow the value stream-based approach advocated by Brian Maskell, and outlined in his book Lean Accounting. “It’s the most comprehensive treatment out there,” says Andrew Rumney, solutions director at eBECS. “We’ve tied our own approach to it and we have software that supports it.”
Other vendors, too, have responded to the challenge. In recent times, SAP, Infor, QAD and SYSPRO have all added well-regarded lean capabilities to their offerings, generally aimed at bridging the gap between ERP forecasts and the detailed
Kumar is keen to prove that Microsoft’s commitment to lean doesn’t just extend to kanbans, lean modelling and mixed-mode manufacture, but actively embraces capturing data in a lean way, too. “We understand the customer’s pain, and we’ve gone to a lot of trouble to capture data through technologies such as RFID and barcodes,” he explains.
“The idea is to genuinely add value.” That said, lean accounting still remains a challenge. Many a lean implementation has been cancelled or held back because businesses’ cost accounting systems appear to show that labour and overhead costs are rising, not falling, as the switch to lean proceeds.
So the gap between lean and IT is shrinking. But it’s still not disappeared – and, in truth, it may never do so.
exist with lean, rather than enhancing or supporting it.
Paul Docherty is CEO of i-nexus, a business execution system provider. Docherty touts i-nexus’ technology as being a revolutionary approach to business strategy realisation but admits there are still limitations to the automation of lean principles.
n my experience of lean deployment, I would agree that alongside the many benefits of using IT, there are also certain limitations - and some scepticism amongst practitioners. I see three clear reasons as to why lean practitioners don’t always welcome IT with open arms. Firstly, lean practitioners are brought up on the concept of ‘visual management’, that is, ensuring that the people line side are the ones to directly update and report on performance. Display boards show progress instantly, introducing IT to this process is costly and timely. A second commonly-held view is that IT systems are an unnecessary overhead that exist to facilitate management reporting, which is the antithesis of lean’s ethos for reducing waste. My final observation on scepticism is that lean is typically a daily management activity carried out at the line side by operatives or front-line teams, thus raising the question of the plausibility of sophisticated IT systems.
These challenges are universal. I have experienced them in the UK, across Europe and in the US. Lean is an immediate, handson process: computer systems are not naturally aligned with this way of working. However, there are multiple levels to lean and as the levels increase, so does the
potential for IT support or automation to make a notable difference. As briefly mentioned earlier, at the daily management level where operators are working to methodologies such as 5S, IT systems do not add much value other than perhaps to automate the process of SPC analysis. Moving up a level to focused improvement initiatives and value stream mapping, IT can add significant value in both the visualisation and tracking of the impact of actions as well as in the creation of processes such as ‘As Is and To Be’. When a growing company moves up through the levels of lean to the enterprise approach level, this is where I strongly believe that IT becomes essential. At this level, goals and objectives are being cascaded using hoshin planning which needs overlaying with lean using IT support to ensure objectives are linked to actions and then to measures. The integration of these methodologies into one software system is termed ‘business execution’, a fast-growing approach to driving strategic initiatives. If dedicated software is not used at this stage, spreadsheets will be relied on to do the job but they simply aren’t sophisticated enough for multiplelevel project management of this kind. The right IT support takes out the heavy lifting, dramatically cuts down on administration and drives execution of objectives. It is equally important to be aware of the limitations of IT in lean as it is to understand the benefits. Operator level activity must not be compromised through the introduction of IT. Corrective action, training matrices and ‘brown paper’ work achieve the best outcomes when carried out at the line side and only captured using IT post-activity. There’s an important balance to be struck and working in this way will ensure that software is used as a tool to effectively manage changes, not replace the daily management processes.
L e a n with I T special feature
Mike Hodge is manufacturing IT director at Cimlogic, a provider of software solutions for process control, industrial automation and MES that has also developed a product specific to lean, called LEANTrak™. He discusses the difficult relationship between IT and lean.
appreciate why many lean practitioners are frustrated by IT solutions, and even see them as an obstacle to lean progress. In larger companies, management will often ask Cimlogic not to act before they have decided the global direction for the entire company. But we often get local site requirements: lean practitioners are often after small changes. This kind of political conflict can cause problems.
We do understand that companies with operations around the world don’t want hundreds of different attempts at tackling the same issue and there is a very good reason why they try to deploy a global strategy in terms of IT. But this process can create frustration for the lean people down at a single site level. We see a lot of different scenarios and systems through working with our clients, and I think it doesn’t have to be like that: there are tools that can actually help lean practitioners. A solution that’s implemented for the sake of implementing is going to be limited in its ability to improve and to reduce waste. Five years ago, IT systems were pioneered by engineers, they were merely an add-on to bigger projects and used to provide general data. They have become much better, also in response to a changed client base: most companies now hire people with job titles like operations excellence manager or CI manager. The IT solutions are now being developed with their requirements in mind. Most IT systems capture facts in the background, with very little input from the operator. Some companies rely on a paper-based system because having somebody write down that, for instance, a machine has stopped for a certain reason makes them conscious of the fact that there has been an issue with downtime. With an IT solution in place, the operator may not give the right importance to the problem, and it might only be the production managers looking at data at the end of a shift.
A production line may stop just for one or two minutes, but that can happen hundreds of times a week. With a manual recording system, even with the best will in the world, the operator will not be able to record all the stoppages and the risk of inaccuracies increases. You end up with a scenario where you might put resources into tackling a problem which might not even be the real problem. IT solutions prevent that from happening. E N D
In this sense, it is important to get the balance right: how can an automatic system complement the benefits that a paper-based system would have? The system is going to record the amount of seconds or minutes a machine hasn’t worked, for example, and the operator has to enter the reason behind the stoppage.
B O O K R E V I E W J ohn B icheno
John Bicheno reviews The Puritan Gift, by Kenneth Hopper and William Hopper, I B Tauris, 2010
his issue of LMJ is about leadership. This issue also comes out at a time of severe business uncertainty. So I have selected for review an Economist award-winning book that deals with both of these topics. The Hopper brothers’ book may appear to be a strange title to review in LMJ but in fact it is highly relevant. It is a can’tput-down history and speculation of what made American business, and particularly American manufacturing, great and how and why this has been lost. Also of interest is how these American lessons were transferred to Japan, and the reasons why European business followed America’s decline.
The thesis is that what made American managerial culture great was the four ‘Puritan ethics’ of a belief in hard work and leaving the earth better than you found it, organising skill, a sense of the community rather than the individual, and a fascination for technology. These came to America from Britain and Europe, but were often scorned at their origin. These Puritan ethics, over perhaps 200 years, laid the foundations of the great American corporation. We meet en route Dan McCullum, Samuel Colt, Morse, Fred Taylor, du Pont, Ford, Edison and others. Finally the ‘golden age’ emerged in the half century up to about 1970. Management became thought of as a craft to be learned on the job under the mentoring of a senior. People moved up the managerial ladder gradually acquiring deep knowledge of the business and the technology. Skills were built by academic education in the area followed by years of hands-on experience.
Experimentation through a fascination for technology was part of the process. Managers learned deep respect for the workforce. As a result engineers became the top managers of engineering companies, scientists led science companies, doctors led pharma companies, bankers led banks. The American way of business was transferred to Japan after WW2 by the ‘three wise men’ (by the way, not Deming or Juran) who schooled Japanese senior managers and were ruthless in breaking cartels and firing reluctant participants. Then, in the 60’s and 70’s, the rot began. Business schools began to turn out ‘professional managers’ with MBAs (I admit being one!). Many of these moved from company to company, industry to industry. Individual financial rewards began to replace community responsibility. The way to run the company was through financial KPI’s and not ‘domain knowledge’. The stock market ahead of employees or customers. Short term rather than long term (interestingly, Mike Rother at LERC Conference 2010 cited just this as a failure of lean, of GM vs. Toyota). The book does not mention lean, but takes severe swipes at six sigma and ‘heroes’ such as Jack Welsh. A devastating chapter on the failure of Business Schools (called ‘the temples of the cult’) should be read by every business school Dean. Now, according to the Hoppers, we are reaping the result through economic turbulence and failing businesses. But the Hoppers see green shoots of hope appearing in, for example, GE. So, what should the priorities of leadership be? Read the book! E N D
EVENTS There are currently an expanding pool of events available for the development of the lean community which offer both general and sector specific opportunities to renew your enthusiasm and gain new perspectives through communicating with lean contemporaries.
Forthcoming events from LMJ include: Manufacturers Directors’ Conference 2011
November 8-10, The Point, Lancashire County Cricket Club, Manchester The Manufacturer magazine is happy to announce that this year’s MDC will see Mr Masaaki Imai as one of its keynote speakers. Mr Imai is often referred to as the Lean Guru, also thanks to his work with Taichi Ohno and Shoichiro Toyoda at Toyota. His knowledge in the field of continuous improvement will provide attendees with a great insight into what it takes for a company to embrace lean and reach operational excellence. Other keynote speakers include Siemens’ Juergen Maier, author John Oliver OBE, Bloodhound SSC’s Richard Noble OBE and Peter Marsh, manufacturing editor at the Financial Times. Best practice tours will also be offered.
Lean Management Connect December 1, London
The Lean Management Journal and The Manufacturer magazine invite all lean and operational excellence professionals to a unique one day event of lean networking and learning. Whether you are well advanced on your lean journey or just starting out this event will challenge the way you think about lean best practice and organisational change.
Lean Business System Annual Conference 2011
October 11, the Marriott Forest of Arden Hotel, Birmingham This event, organised by S A Partners and media partnered by LMJ, will be a great opportunity to share ideas, network and expand the knowledge you need to sustain your lean journey. Hear from leaders giving practical advice and from practitioners from several sectors sharing their experience. Keynote speakers will be: Peter Hines, chairman of www.LeanBusinessSystem.com and co-founder of LERC; Bob Emiliani, a leading expert on lean leadership and prolific author; and Marcel Schabos, CEO of Inalfa. For more information on our events or to attend, please contact Benn Walsh at +44 (0)207 202 7485 or email@example.com
Other forthcoming include: Lean for Sales & Marketing October 3-5, Cardiff
For more information or booking details at all LMJ’s partner events please visit:
With customer value being at the core of the lean philosophy, it is clear that sales and marketing, the channels through which a business and its customers interact, should be on the radar of practitioners. The link between the two areas is often weak and communication poor. A common problem faced by many organisations is to get the lean philosophy accepted and adopted by all business processes and functional areas. In particular, the sales and marketing function is often singled out as being particularly resistant to lean thinking. This course, organised by LERC and run by Richard Harrison of the Sales Transformation Partnership and LERC director Simon Elias, will aim to bridge the gap and make lean relevant to sales and marketing.