Lean management can seem deceptively simple--just cut costs, right?
In fact, Lean philosophies are infinitely complex, delving deeply into industrial/organizational psychology, business strategy, macroeconomics, and more.
One can work toward Lean through simple steps, but complete implementation calls for thoughtful, genuine leadership. Thinking comprehensively about it as an overarching state of mind will help you avoid these and other mistakes.
Cost-cutting is a key benefit of Lean. However, some leaders forget to factor in the costs of inefficiency. Imagine workers are using expensive adjustable worktables. A new Lean manager replaces worn-out units with fixed height tables, saving thousands of dollars per workspace over time.
However, if this decision creates enough unnecessary movement to reduce plant efficiency by one percent, all the savings realized evaporate rapidly.
Always analyze sources of waste before cutting facilities expenses.
In a Management Today roundtable discussion, Fred Warren of Microsoft asks, "Why should a manufacturing company be running its own email system?"
Good question, Fred. Too many manufacturing companies, driven by the manufacturing ethos, insist upon doing as much as possible in-house.
Lean managers focus on improving these clunky initiatives, which don't speak to the core strengths of the business. In reality, a smart Lean manager should jettison such projects and instead develop strong partnerships with key service providers.
It is exciting to receive the opportunity to implement Lean in a new place. However, rushing this process may lead to disaster if key stakeholders are not on the same page.
Lean managers must be forthright and communicative at all levels of an organization. Often, employees will discover efficiencies missed by management experts, provided that employees are empowered.
Advancing without getting buy-in will lead to rumors and dysfunctional conflict.
If you have increased the efficiency of your manufacturing process by 10 percent, it is important to ensure your suppliers and retailers can keep up. An efficient assembly line does no good if it is stocked with insufficient materials or if additional manufactured units collect dust in a warehouse while shelf space remains unavailable.
Value stream mapping is critical to Lean implementation and cannot be overlooked.
Lean management calls for continuous improvement, but it does not call for the complete reorganization of highly functional teams and processes. Managers who inherit a struggling business are prone to judge all teams and processes by the failures of the company's business model. This overlooks highly efficient teams working within a dysfunctional structure.
Take time to examine the performance of teams you inherit. You may find that one supervisor has created a disciplined and highly efficient workforce, even within a failing organization. Interestingly, when these excelling teams are uncovered, they are often operating according to Lean principles without being prompted or instructed to do so!
Lean management has become a hot topic among venture capitalists and entrepreneurs.
Investors are asking startups to apply Lean manufacturing concepts to reduce waste from day one, thereby cutting both the business's risk of failure and the investor's exposure to loss.
The customer-focused definition of value that is integral to Lean has broad applicability across industries.
However, some leaders have lost sight of the origins of Lean management.
In a Business Insider interview, author and serial entrepreneur Steve Blank admits, "Most people don’t remember that agile development, lean manufacturing, and customer development was actually invented by Toyota in the 1960s." (more…)
Starbucks has used lean manufacturing to expedite service for several years, which is why, when they announced its baristas would no longer work on more than two drinks at once, it made a lot of sense.
This change was intended to address complaints about "average" quality espresso drinks and variable drink quality.
Whenever a quality issue occurs in a lean shop, observers wonder if lean management is responsible for the defect. Though substandard implementation of lean principles may negatively affect product quality, lean management should not.
Instead, lean manufacturing should alter a company's fundamental definition of quality to focus on those things that are defined by the customer as adding value. If a particular process or feature takes time and does not add value for the customer, it should be eliminated. That goes for not only large items, but also for small movements within the manufacturing process.
When the customer receives a product that includes all those features she defines as valuable, that is available when she wants it, and is provided at a value made possible by the reduction of waste, quality is achieved. Only the end user of a product can define the term "quality" as it is applied to that product. What good to the customer is an additional feature if it means that the product is not produced rapidly enough?
Some observers have rightly wondered if Starbucks intends to abandon lean management techniques and emulate trendy artisan coffee shops. The iconic chain certainly has struggled in recent years. Store expansions have slowed and earnings took a hit in fiscal year 2008. On the other hand, this year's outlook for the world's largest coffee maker is distinctly sunnier.
A quality push from Starbucks doesn't mean a step back from lean manufacturing principles. As stated above, the customer's perception of value is the most important barometer of quality for any lean shop. Changes focused on improving the customer's experience of value are justified, even if they reduce the speed of service.
Furthermore, Starbucks has so far used lean management to speed drink preparation using a model in which baristas produced as many drinks as possible. There's no reason the same techniques cannot boost speed for baristas serving only one or two drinks at a time. Observations by lean managers will need to be repeated.
When it comes to essential philosophies of lean management, executives throughout numerous industries turn to Toyota's practices and production systems for guidance. Specific Toyota initiatives may fall flat, but Toyota is overall deserving of its reputation as a model of product flow.
At Toyota, even initially successful manufacturing processes are routinely replaced as better alternatives appear or changes are necessary in response to customer concerns. It is second nature for Toyota executives to make changes immediately upon realizing that a faster, smoother alternative is available.
When faced with a problem like the one Starbucks is currently experiencing, what would Toyota do? Probably exactly what Starbucks is doing: Scrap processes that speed production but detract from customer-defined value.
How much of your average day feels like wasted time? Can you find ways to eliminate waste?
The principles of lean management offer valuable lessons to help ensure your time is spent on what’s most important to you.
Jamie Flinchbaugh, co-founder of the Lean Learning Center and a contributor to Industry Week, offers some tips on how to eliminate waste in your daily life.
Flinchbaugh describes a hotel general manager who defined her ideal state as never having to talk to a guest again. (more…)
