Alfra Consulting First International cross-functional Webinar

ALFRA Consulting | Developing Partners
Our Agenda Today
• Definition of Lean – 10 min
• Common reasons of Lean Strategy Failures - 10 min
• Alignment of the entire organization – 10 min
• Leadership Engagement for a Lean Transformation – 10 min
• Q&A

What is your definition of Lean?

Lean Thinking
Lean Enterprise
PRODUCT
BUILT & SHIPPED
CUSTOMER
ORDER
Short Lead Time
Waste out of
the System
Traditional Business
PRODUCT
BUILT & SHIPPED
CUSTOMER
ORDER
Very long Lead Time
Waste within
the system
(high inventory, defects, waiting & more… )

Lean = Cheaper Mediocrity?
• Are You Striving For Excellence?
– 20% Headcount Reduction
– 75% Reduction In Changeover Time
– 50% Improvement In OEE
– 30% Reduction In Lead Time
– 25% Reduction In Inventory
• Do Any Of These ‘Goals’ Make You Excellent?
4© 2008 – 2014 Toyota Way Academy, LLC

Lean = Cheaper Mediocrity?
Excellence Is A Pursuit,
Not An Absolute Value
• Are You Striving For Excellence?

‘Lean’ Process vs. Lean Systems
We have high inventory and low output
We Need to ‘Lean Out’ our Processes
6
We’ll Introduce Cells and Pull Systems
Now We Have a ‘Lean’ Process, Let’s Replicate!

Tools
Cells, Flow lines
Kanban
Leveled Schedules
Andon, Line Stopping System
Standardized Work
5S, Visual Factory
Apparent Purpose:
One-piece flow is the ultimate in waste elimination
Reduce inventory which is the main purpose of lean
Unevenness prevents smooth flow and increases inventory
Do not let defective products leak out
Standardization is the best known way and most efficient
Visual control allows everyone to understand the state of the
operation by simply looking

Lean Systems Have One Function
Surface Problems

LEAN SYSTEMS
Processes that Surface Problems so People can
Continually Improve and Learn through PDCA
System Surfaces Problems
Collect All Problems
Align & Prioritize
By Business
NeedsBusiness
Strategy
Solve 1 by 1
Using PDCA
I
Improve
Processes
Process A Process B Process C

A principle-based approach to management that is timeless and universal.
There are always different solutions to different problems in manufacturing &
service companies. It is a continual journey of learning that never ends!
Philosophy
(Long-term Thinking)
People and Partners
(Respect, Challenge
and Grow Them)
Process
(Eliminate Waste)
Problem
Solving
(Continuous
Improvement and
Learning)

The Iceberg Model
SMED
Andon5S
Kanban.
Supermarkets
Slogans
PHILOSOPHY
VISIBLE
TOOLS & DEVICES

Common Reasons of a Lean
Transformation Failure

Why companies don’t get to embed Lean in the Culture
Lean is a “Program” with a start & end date.
Lets Get in LEAN MODE !!!!
Many companies understand Lean as a project/program, which has
a timeframe for implementation, activities are assigned, performed
and when completed, everybody do business as normal.

Focused only on financial short-term results.
• When a company sees Lean only like a cost cutting methodology, every Lean
effort must have a return in measurable ($$) benefits , many companies let
aside key systems or efforts, because they don’t bring immediate or direct
hard savings/benefits.
Some important soft systems are:
• People Coaching & development (skill & career)
• Award & recognition (keeps the momentum and motivation of associates
• Respect (assuring people’s work, internal promotion)
• Empowerment Layers
• Among others.

• Fail to develop people at all levels (another short term bet)
• Many companies don’t invest in their people, and very few of
them invest in development systems at all levels.
• They end depending only of few experts in the company.

Which are the barriers to establish a Lean Culture
in your company?
REFLECTION TIME

• Widespread across the company, but very shallow
• Some companies try to spread Lean across the company in a very
fast pace, but there is not enough time to get in deep to embed
the mindset of the people.

• Inconsistent & weak leadership direction, Leadership manages
from the office (never seen on Gemba)

Leadership Role

Western Leadership Vs. Toyota Leadership
Traditional Western
Leader
Toyota Leader
Work to a financial Plan Reach for True North Vision
Quick Results Patient
Proud Humble
Climb Ladder Rapidly Learn Deeply and gradually Earn Way
up Ladder
Results at all Costs Need the Right Process to consistently
get the Right Results
Achieve Objectives through People Develop People through process
improvement

Servant Leadership
Leadership develops the capacity that allows team members to improve what needs to
be done
Suppliers – Team Members - Customers
Team Leaders
Group Leaders
Asst. Manager/Manager
Asst/General Manager
Vice President
President

Servant Leadership
Needs Strong Foundations
22
Consistency of
Direction through
Hoshin Kanri
Highly Developed Work Groups
Continuous
Checking and Adjusting
Middle Managers as Coaches
Executives as
Visionaries
& Guides
Rock Solid Culture of Continuous Improvement: Skills & Commitment
© 2008 – 2014 Toyota Way Academy, LLC

• Improvement (Lean) is owned by a department, not for all the
company.
• Everybody requires help from the expert, nobody feel capable to
improve by their own, even small steps.

• View lean only as a technical “toolkit”, no strategy at all, isolated
application of tools around the company and processes!!

It Starts With A Vision
• Successful business know what the purpose of
their business is; why they exist
– People are more strongly motivated by a positive
vision
– The vision helps define ‘True North’
– A company’s purpose is not the same as a
company’s measurable objectives

True North (Hoshin)
The process of reflective learning lead by management keeps the organization
on track to its True North despite the short-term influences
Variables
• Economic fluctuations
• Materials disruptions
• New employees
• New customers
• New markets
• Etc.
26

True North
• Wherever we are in an organization, we can
use our True North to guide our efforts
• Represents perfection – we strive toward it
knowing it can never be reached
• Helps reassure teams that they are achieving
the mission the ‘right’ way

28
Destination
(Vision)
Starting Point
(Current Condition)
The Strategic Plan is
the “Road” to a Desired
Future State of the Organization
Use Hoshin to
remove the Big
Boulders, one at a Time
HOSHIN - ROADMAP
Use Continuous Improvement
to remove small obstacles
on an ongoing basis
Later
Later

Comparison between
MBO & Hoshin Kanri
Management by Objectives Hoshin Kanri
Results Oriented Evaluation of
Effort
Concerned with both Results and
Process of getting those Results
Top down
Communication
Top down Direction Setting and
Bottom-up Planning & Executing
Directive Participative
Authority Oriented Responsibility Oriented

Results as Lean Strategy EvolvesBusinessResultsfromLeanTransformation
Starting Maturity
Maturity in Integrating Lean and Business Strategy
I. Apply some Tools II. Management Led Lean III. Aligned
Continuous Improvement
Without Philosophy
No strategy at all!!
98% of companies fail here!!
With Philosophy
Systems that enable the
culture development

Can we “Sustain the Gains” of Lean like
maintaining a machine?
“Why are we Slipping?”
Process
Results
Time
“Do Lean”
(Apply Tools)
“Getting Lean”
(Lean out Process)
“Entropy” Means
Decay
Results as Lean Strategy Evolves

Working Out to Arrest Entropy

Counter Entropy With Positive Energy
Process
Results
Time
“Early Projects”
(Experiment)
“Spread Lean”
(Learn)
‘Daily Management’
(Leadership)
Results as Lean Strategy Evolves

Mechanistic Thinking
• The organization behaves like a machine
• We believe we can ‘optimize’ a value stream
– Optimization implies a ‘solution’
– The ‘solution’ will be fixed and standardized for all
time
– It is a convenient way to think about processes
• The introduction of people into the equation
makes all ‘constants’ into ‘variables’

Mechanistic Thinking
• Frederick Taylor’s ‘One Best Way’
• Workers Do – Supervisors Plan
• After Taylor we have been on a quest
to use mathematics to find the
‘optimum.’
• People are machines
• Occasional adjustments
and updates are needed
in their programs
• The best programs will
yield the best results
• We need to find the best
program

Systems Thinking
• Idea is over 100 years old
• If the environment did not change (a closed
system) we could develop controls
• Organizations are open systems – constantly
changing and adapting to stimulii
• The goal is to facilitate teams of people to
innovate and solve problems

Machine vs. Organic Thinking
37
Mechanistic (Machine) Thinking
Organic (Systems) Thinking
World view Simple linear chain of cause & effect Interdependent, interacting systems
View of
environment
Control it, buffer organization from change Embrace it, respond flexibly to environmental
change
Role of people Extensions of machines Thinking and Improving
View of people Interchangeable parts Appreciating assets
Controls External supervisors, specialists, standard
operating procedures
Internal self-regulating subsystems
Management style Autocratic, command and control Participative, collaborative
Purpose Organization’s goals only Members and society’s goals also
Risk Taking Discouraged, “If it ain’t broke, don’t fix it” Encouraged, “Experimentation is the best
teacher.”
Change
management
Primary responsibility of management and
staff specialists
Primary responsibility of work groups

Bureaucracy &
Lean Deployment
38
Mechanistic
Deployment
Organic
Deployment
Formalization of Lean Support
Structure
High Low
Autonomy to Customize Process Low High
Source of lean Expertise
Mostly
Lean Group
Mostly
Line Organization
Strategy for Deployment of
Lessons Learned
Audited
Compliance
Knowledge
Sharing
Process to Address
Organizational Entropy
Rules &
Regulations
Continuous
Improvement
Based on Kucner, A Socio-technical study of lean manufacturing deployment in the remanufacturing
context, unpublished doctoral dissertation, Ann Arbor, University of Michigan, 2008.

Bureaucratic Lean
Deployment Features
• A recipe for deployment (some use life cycle models to display
tool implementation at different stages)
• A set of training modules
• Certification for internal experts (like black belt programs)
• Lean metrics to measure deployment and outcomes and audit
the programs
• Executive support to hold business units accountable (e.g.,
bonuses tied to achieving lean metrics)

Critical Questions to Answer
• In your organization, can you confidently ask
anyone the following questions?
1. What are your biggest problems?
2. What, specifically, are you trying to achieve in
solving those problems and by when?
3. How are you doing it?
• These answers should directly link to their
Hoshin objectives

What Is Your Situation?
• What you work on depends on your
company’s current situation
41
Business Purpose
People Development
Purpose
Approach to Change
Company Survival Identify and Develop Leaders/ lean
coaches for future of company by
observing who can lead kaikaku
Identify business needs to survive
with key performance indicators
and use Radical kaikaku of
Processes to achieve
Critical Customer Issue
(quality, cost, delivery)
Targeted leadership
development/lean coaches on
how to achieve target condition
through PDCA
Targeted kaizen of Processes
critical to customer-facing issue
based on target conditions
Business Need for Specific
Results (e.g., productivity
improvement)
Coach leaders on how to achieve
target condition through PDCA
Set appropriate target conditions
and work to achieve in manageable
steps with feedback
Begin Journey to
operational excellence in
stable/growth environment
Convince leaders of value of
improvement and develop lean
coaches
Build “Showcase” process or
demonstration projects by driving
toward target conditions and
target outcomes

Crisis Healthy
Primary Purpose Drive Rapid Results Build Foundation for
Lean Enterprise
Secondary Purpose Develop Future
Leaders
Develop People and
Culture
Leadership Top Down
Turnaround
Top Down Coaching
Focus Results through
Process Improvement
Process to Drive
Results and Learning
Time Frame Short-term to get to
stability
Long-term
The Extremes
42
Range of Business Conditions

Conclusion
• There is no secret recipe, improvement is
everybody’s role.
• Leadership by example
• Use the approach depeding on your current
situation
• Establish Lean Systems to develop people and
improve processes.

Continuous Learning & Improvement
“Every day, little up”
“Until you take the first step, it will
not be possible to see the next step”

Material References
Several quotes and information was taken from material & work from the next sources:
•The Toyota Way – Jeffrey Liker
•The Machine That Changed the World - James P. Womack, Daniel T. Jones, Daniel Roos.
•Lean Thinking - James P. Womack, Daniel T. Jones.
•The Complete Lean Enterprise – Beau Keyte & Drew Locher
•Lean Lexicon - Lean Enterprise Institute
•Lean Leadership – Jeffery Liker & Gary Convis

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