How to Implement Lean Manufacturing: Strategy and Spread the Word – Part 1
So, let’s get down to the business of actually implementing lean manufacturing.
Step number one: do some planning (Strategy), then tell everyone about those plans (Spread the Word). That’s not hard, right?
No, it’s not hard but you need to do it right if the rest of the steps are to go well. So, let’s start with Strategy and we’ll get to Spread the Word in a later post.
Essentially, you need to develop some overall goals, some metrics, and a calendar for the overall program. And you need to get leadership together in a series of meetings to develop these goals, metrics, and the calendar.
When a prospective client gets in touch with me about helping them with a lean manufacturing implementation, the first thing I ask them is, “Why do you want to do that?” Mind you, I’m not trying to talk them out of anything, it’s just that I want them to start thinking about the overall business case and the specific goals for the project. A lean manufacturing initiative is hard to carry out and it takes a long time. Unless the organization has clear, compelling goals, it’s not likely to stick with the initiative.
You need to know why you’re going to be putting a bunch of time and money into a lean initiative. Improve quality? Improve customer service? Reduce lead times? Improve sales? Improve productivity? Reduce inventories? All of the above?
What do you want to achieve and why? Are customers complaining about quality and/or service? Would reduced lead times help you gain market share? Is inventory piling up in your warehouses and on the shop floor? Are expedited shipping costs eating you up? Or maybe it’s not that you have serious problems in these areas, it’s just that you’re not…very good. In either case, what’s the opportunity cost of the problem or improvement opportunity?
How to get started? Well, a good ol’ SWOT analysis does a good job of getting ideas as to, well, Strengths, Weaknesses, Threats, and Opportunities out onto the table. (If you’re not familiar with SWOT Analysis, just do a web search on the term. There’s a lot about the technique around the internet.) Once the ideas are out there, prioritize them and turn the important items into goals.
I’ve found that five to ten goals (and corresponding metrics) are good numbers to shoot for (and ten is approaching “too many”).
It’s axiomatic, right? Once you have goals, you need to be able to measure progress toward those goals. We’re used to the process.
One problem is that organizations often develop goals that are hard to measure (“increased engagement and involvement of our associates”). Another problem is that many organizations aren’t actually very good at selecting performance metrics (unless they have a financial component and most of those aren’t of much use to operating managers and supervisors). I’ve had clients that didn’t know what their on time delivery rate was. I’ve had clients (most of them, in fact) that didn’t have a clear definition of “scrap”. I’ve had clients who couldn’t tell me what percentage of the time their vital machinery worked when it was supposed to.
All this means that the goals won’t necessarily have obvious metrics and a separate discussion regarding metrics needs to take place.
I like to initiate the Metrics by asking the Steering Committee, “What measures will tell us whether or not the Lean Initiative is working? What measures will indicate that we’re making progress on the goals we’ve agreed upon?” (I sometimes do this even before establishing the goals; as we’ve established, goals and metrics are closely tied.)
Generally, as with the goals, five to ten metrics work pretty well. (I’ve had clients choose as few as one and as many as 30. Neither works well in practice.)
Finally, the Steering Committee needs to establish a calendar of activities. The first thing that will go on the calendar will be the Spread the Word communications meetings. (And the first thing that will be covered in those meetings will be…the calendar.)
The calendar will have two versions. One will show what will be initiated month by month. (“We’ll conduct the Spread the Word meetings in January, we’ll launch the Sort and Shine effort in February and complete it by April. We’ll also establish and train a value stream mapping team in February.”) The other will have specific dates and times for specific meetings, workshops, etc. The first is developed during the initial planning. The more specific dates and times can be agreed upon as you go along.