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LEAN . . . SO WHAT COMES NEXT?
By David R. Dixon
a couple of decades of testing, Lean business practices are now
widely accepted as a major contributor to extraordinary customer
service and profitable operations. But with this acceptance has
come a new leveling of the playing field in many industries. The
preemptive competitive advantages enjoyed by early Lean adopters
have dissipated as more and more companies are “converted”
to techniques that reduce waste and slash lead times. We have also
come to the realization that only the most effective operations
can position a company to compete with competitors who source off
shore to suppliers in low cost labor markets.
These conditions suggest that we need to get better; and getting
better requires that we choose and execute improvement projects
that have maximum impacts on the performance and profitability of
A Trio of Techniques
It is important to note our belief (based on years of observation)
that companies become World Class performers one project at a time.
Real improvement is the result of fundamental changes to our core
business processes. These changes are rarely made “on the
fly.” Carefully structured projects, properly resourced and
meticulously executed, are the means by which we drive major change.
Value Stream Mapping and analysis, as a means of selecting improvement
projects, needs little explanation or defense. It is worth noting,
however, that we often stop short of mapping the entire value stream
(or all of the value streams). As we work to eliminate waste in
administrative processes and in the supply chain, we will need to
extend value stream mapping to include these activities. Too often,
we also fail to iterate on the maps after we complete projects.
As a result, we do not confirm the results and identify the next
steps for improving the value stream.
Value Stream Mapping, then, is an important tool for identifying
improvement opportunities and should remain a mainstay in the project
selection process. However, there are many business needs that are
not revealed by a value stream map. Have we institutionalized the
improvement process? Do our improvement efforts support directly
the strategic needs of the business? Do we have issues and problems
that are not addressed by the Lean tool kit? Where do Six Sigma
tools apply? How do we measure our progress—can we demonstrate
that we’re getting better?
These and many other relevant questions are answered best by using
a systematic assessment tool. These tools are commonly referred
to as “Lean Maturity Models.” The version that we use
at TCA goes beyond the application of Lean tools, however, and asks
how well we are doing in each of five equally important areas:
• Vision, Strategy and Leadership
• Customer Focused People
• Systems and Resource Management
• Six Sigma Quality
• Lean Business Practices
Our model is used to quantify the status of the company’s
progress in becoming a Lean/World Class Enterprise (WCE).
Output from the assessment process provides another set of criteria
for selecting improvement projects. When combined with the knowledge
gained from Value Stream Mapping and analysis, we have a much more
comprehensive indicator of what needs to be done. In addition, the
quantified progress report provided by the Lean/WCE Maturity Model
can be a great motivator for people engaged in the improvement process.
As new levels of excellence are achieved, the company
becomes eligible for recognition by various certifying organizations
(e.g., Shingo Prize, Industry Week Best Plants). Targeting and receiving
such an award is a fitting pay-off for a high performance organization.
With the project alternatives suggested by the Value Stream Maps
and the assessment process in hand, we suggest yet another innovative
tool for governing the execution of these projects. The tool is
called a WCE Transformation Map, or T-Map.
A strategically focused, comprehensive WCE implementation program
is a complex set of initiatives and projects with critical interdependencies.
Many projects compete for the same resources, which forces us to
make decisions about which projects to undertake in any given timeframe.
The T-Map provides a means of visually analyzing the alternatives
and documenting the plan once the decisions have been made. We then
use the map to continuously check progress against the implementation
plan. Figure 1 is a simplified illustration of the T-Map. More about
its application will be found in this issue of Case-In-Point.
Leading the Charge
Time has demonstrated that successful Lean/WCE implementations
are buttressed with a strong leader and a surrounding cast of committed
colleagues. But it goes further. Companies who are most effective
form a Steering Team to direct the Lean/WCE implementation effort.
This team devotes focused time and energy on the analysis of value
stream maps, assessment results, and the strategic needs of the
business. These inputs are used to develop and document the T-Map,
which becomes a visual, directional signpost for the entire organization.
The T-Map captures all of the activity necessary to improve current
processes and to add new or expanded capabilities in support of
the business strategy.
Next, the Steering Team will position one or more Lean/WCE professionals
to coordinate and support project teams and to act as a liaison
between the project teams and the Steering Team. The Lean/WCE Coordination
role has proven to be essential in a successful program.
And finally, when all of the planning is in place and our coordinator
in on board, we always face the dilemma of how to resource the initiatives
and projects that we have chosen to work on. Because most people
in the company are engaged pretty much full time with basic business
functions, it is difficult to make them available for improvement
projects. Creative ways of making people available and augmenting
the permanent staff with temporary resources is perhaps the most
important function that the Steering Team performs. The high powered
planning generated and documented by the techniques described above,
is useless unless we find crisp, effective ways of executing.
Moving to the Next Level
Even being “kind’a, sort’a Lean” might have
provided a competitive edge at one time. In some industries, performance
has been so poor that the benefits of the most rudimentary Lean
implementation would set a company apart from the competition. This
is rarely true today. There are a growing number of truly world
class competitors, and the price of complacency could be elimination.
The tools introduced here and discussed in more detail in this
issue are designed to take performance to ever higher levels—to
drive out the last vestiges of waste and variation in processes
throughout the enterprise. We at TCA remain passionately committed
to developing and sharing techniques, information and experience
that help our clients in this quest. Call us any time with your
questions. We love to talk about Lean and the World Class Enterprise.
Dave Dixon is CEO of TCA.
Dave has over 35 years’ experience
with Lean implementation. If you
would like to introduce your company
to the next level of World Class
Enterprise techniques, call Dave at
Contact Us for a Free Assessment!