Faster Delivery. Lower Cost. Improved Morale: Lean.

Is it possible to do all 3? Yes. I’ve seen it, I’ve done it, and so have hundreds – perhaps thousands of organizations worldwide, with Lean.

Is it easy? No. Is it realistic? Absolutely.

My article in this month’s Exchange magazine explains how:

Customers demand on-time delivery. Shareholders desire lower operating cost, and employees seek steady, satisfying work. For business leaders these may feel like competing priorities, but a growing number also know there is a system that supports all of these ideals together. That system is Lean.

b.nelson, Exchange magazine, October 2018

In the 1930’s Toyota saw the strength of Ford’s then-revolutionary Model T assembly line, but also its weaknesses. Toyota introduced the missing elements of flow, balance, and the elimination of waste. Central to this “Toyota Production System” was a clear focus on providing value to the customer, while respecting and challenging the workforce to find new ways to improve. So successful was Toyota, that each of its competitors have followed suit, adopting their own version of TPS, or Lean Manufacturing, to remain competitive.

The effectiveness of “Lean Thinking” – as it has evolved – to improve delivery, lower cost, and increase job satisfaction is now widely recognized by major players in many other industries, including Insurance (Sun Life’s “Brighter Way” modelled after “The Toyota Way”), Hospitals (both St. Mary’s and Grand River), and governments (Lean BC, ThinkLean Saskatchewan, and the Region of Waterloo). The adoption of Lean is growing rapidly in our own region. Best Buy, Life Labs, Dare Foods, Shearer’s Snacks, CIBC, Thalmic Labs, Kraus Carpets, and Arctic Wolf are just some of the 120 jobs currently posted in KW, Cambridge and Guelph referencing Lean. 
Let’s look at this system a little closer. How does it work?

Implementing Lean in 5 steps:

1.Define customer value

What does your customer want? Perhaps it’s a reliable car, or a delicious meal, or a piece of technology that is intuitive and adaptable, or an accurate medical diagnosis. Conversely, what are you putting time and effort into that the customer doesn’t want? Incoming material inspections, food spoilage, over packaging, and extra paperwork are all potential wastes, eating away at the bottom line while doing nothing to improve the customer experience.

2.Develop your value stream

Next, identify the processes that deliver your value to the customer. Seating the customer, communicating their order to the kitchen, preparing the meal with fresh produce, and delivering it to the customer might be a simplified value stream for a restaurant. There may be multiple value streams if you deliver multiple products. Drink orders are usually handled differently than meal orders so that would be a different value stream. Car sales and maintenance are different value streams at a dealership. The value stream map shows the connections and disconnects resulting in lost time, effort and money. This is typically followed by a value stream design, where your team of stakeholders optimizes the model to remove those costs.

3. Train staff to see and become allergic to waste

Lean targets 8 kinds of waste as shown here, with the recent addition of energy in consideration of the environment. Lean training shows employees how to recognize and remove each of these wastes – a mentor described it to me as being “allergic” to waste. These process wastes come under the Japanese term “muda.” There is also “mura” (unevenness) and “muri” (unreasonableness) – which come from outside the process and can unlock serious gains when they too are eliminated.

4. Build a culture of continuous improvement 

Lean Thinking is as much a culture shift as it is a set of tools used to facilitate improvement. Business owners benefit from a strength in numbers when the workforce, rather than a select improvement team, is identifying and chipping away at flaws on a daily basis. Giving employees the knowledge and ability to eliminate headaches they face every day at work also goes a long way to building ownership and job satisfaction – certainly desirable when retaining employees is a growing challenge.

Leadership has an important role to play. One fundamental lean principle: “Genchi Gentbutsu” or “Go and See,” is a direction for leaders to personally see – in a mindful and unbiased way – reality. This builds trust and ensures that changes address what is truly at fault.

There are several such “soft” principles in Lean that organizations use in conjunction with process improvement to shift their performance into high gear. Transparency, responsibility, communication, metric visualization, employee development, empowerment and leverage are all part of a Lean organization, and when employed together have boosted sales, profits, and morale in countless organizations.

5. Redesign for the ideal state 

In my role as consultant I put less emphasis on this 5th stage for clients starting their Lean journey, but it is certainly useful to have a long term vision in mind. Toyota defined an ideal state for its production lines as 1-piece pull, and now every vehicle on the line is started after receiving a firm customer order, and customized to suit every customer.

Every producer or service organization needs to define its own future state, and the key performance indicators that drive their business. Lean provides a highly effective suite of tools, plus the cultural shift to help achieve them. 

A final word on Lean: it does not require a substantial investment to get started. A simple workshop led by an experienced practitioner can yield immediate benefits and demonstrate the basic concepts. Leadership coaching can happen in “Gemba” (where the work happens). The addition of simple whiteboards can start the metric visualization and accountability process. Lean is often referred to as a journey.

I would add that the views during the climb up the mountain are spectacular!

b.nelson,  Exchange magazine, October 2018

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