Managing risk in your planning and during the implementation of a lean initiative–or any other major change initiative for that matter–requires a great deal of careful consideration.
My company is assisting in a major rollout of lean practices in 20 facilities across the U.S. for a large retailer (identity concealed) in their distribution and repair operations. A key element of the initial deliverables I require at all levels of the organization in the implementation of lean concepts is risk-careful management assessment and countermeasure planning. Using this real company as a case study, let’s examine some of the required parts of the risk assessment and countermeasure planning process. Included here are the actual ideas and actions underway as we speak in a regional distribution center (DC) in the eastern United States.
Before arriving at the regional DC, we had previously defined key risks and responsibilities for managing risks at a high level. Some of the key risks to implementation success include:
I’m a big fan of John Kotter and require all leadership teams to read his book, Leading Change. He outlines the top reasons for failing to implement a major change in businesses (which a lean implementation personifies!). In a lean implementation, the key requirement for success is empowering the workforce. The reasons to empower our people are pretty easy to understand. On the contrary, understanding the reasons for failing to accomplish empowerment are less well understood and are listed below:
Note: One of my favorite quotes of late, credited to Woosley and Swanson, goes something like this: “People would rather live with a problem they cannot solve or overcome than accept a solution they cannot understand.”
The facility steering committee or guiding coalition that guides the implementation of major change initiatives has certain key roles as follows:
Below are some of the risks that were brainstormed by this DC’s guiding coalition team to identifying success and suggesting countermeasures that will be pursued by the team going forward.
Failing to answer effectively: “why are we implementing lean?”
The body of knowledge on lean is slanted heavily toward manufacturing operations. For an in-depth examination of how lean tools apply in distribution, please see the cover article in the January 2005 issue of this magazine. With this information, people in distribution areas can more easily understand how these ideas work in their environment. After all, people would rather live with their current problems than accept solutions they can’t understand.
Generically, the reasons to implement lean are manifold, including improving customer satisfaction, reducing costs, reducing lead times and improving the work itself through the involvement of an empowered workforce. If we examine this from a stakeholder perspective, here are the “whys”:
Allowing complacency and naysayers to hold sway.
If anyone is visibly opting out of involvement in your initiative―and allowed to get away with it―you may as well shoot yourself now. Few things are more demotivational to people than realizing they are working hard for something that is not expected from everyone equally. Very quickly, people will see that it’s ok to give the whole change initiative lip service.
The best solution for this problem is a strong commitment on the front end of the effort to establish team norms and actively change the structure that drives behaviors. One of the structural changes includes changing position descriptions to mandate involvement in the implementation of lean. These mandates include involvement in kaizen teams, actively providing ideas and measuring individual performance to standards set by the team.
Cost–not allowing enough budgeted resources to be able to make the changes happen; no pain, no gain.
This one is one of the most obvious, yet most often violated, requirements in a lean implementation. The gurus promise quick wins and will launch Kaizens to quickly make changes. The temptation is to give training and continuous practice of the principles of lean short shrift by “Kaizening” your way to prosperity. I recommend that the steering committee come up with a minimum level of effort required by all employees as part of the process. For example, at the major retailer’s distribution centers, we have committed to investing an average of 4% of this year’s working hours to training and involvement in implementing lean and kaizen circles.
Four percent of a forty-hour week works out to a little more than one and a half hours a week on average, per employee. Trust me on this one–the apparent paradox is that taking this much time out of the productive work week reduces output and efficiency. What is remarkable is the fact that case study after case study has proven that properly structured activities by workers who have been trained to practice practical problem-solving and error-proofing techniques always generate two to five times the investment in improved results.
Below are several more areas that I consider high-risk problems if they are not aggressively addressed in the risk assessment and action plan phase of planning a lean implementation:
In my opinion, there is rarely enough effort expended in risk management at the onset of a lean implementation. By learning vicariously from the failures of those who have gone before, we can avoid the pitfalls and problems caused by a lack of careful risk assessment and countermeasure planning causes. My advice: err on the side of over-planning. You will be far better off in the long run.
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