Over the last 20 years, many articles, books, and case studies have been written about Lean Manufacturing implementations. In those reading materials, we are exposed to amazing results with the implementation of Lean Manufacturing. However, we also read that after two to three years of implementation that 70% to 80% of companies are struggling to maintain the improvements made in the first two years of implementation and are making limited if any continued progress in their Lean journey. After three years, many companies have abandoned Lean implementation or moved on to Six Sigma implementation in the belief that Six Sigma is the way to sustain lasting improvements. This begs the question: If Lean Manufacturing offers so many cost benefits and quality gains, why are so many companies struggling to implement Lean?
First, let's discuss the steps a successful organization takes to implement Lean. Figure 1 is a description of Lean implementation in terms of stair steps. A company implementing Lean will naturally progress up the stairs as it implements Lean Manufacturing. A company is not required to complete a step prior to moving on to another step. In fact, a company may operate on multiple steps at any one time. The objective is that a step cannot be skipped and moving up the steps without achieving process stability will increase the failure at implementing Lean tools at a higher level. A summary of the stairway is:
Stair 1 5S - 5S and standardized work are the foundations of Lean implementation. 5S is the start point for workplace organization (a place for everything and everything in its place) and a visual representation of the disciplines that will be required for Lean thinking. Anyone that has attempted to implement quick changeover without 5S disciplines quickly realizes the importance of 5S.
Stair 2 Standardized work - Standardized work is the second foundational element to Lean. Standardized work is the documentation of each process by the operator. Standardized work assists in employee training and is a foundational requirement to implementing any quality system.
Stair 3 - Visual controls - The ability to manage by looking and seeing the status of the operation. Visual control is tracking process variation and performance through visual cues and measurables rather than tracking people. The operations performance can be viewed by the flow of material, posted measurable data, Andon indicators, TPM, etc.
Stair 4 - Kanban - Kanban/Pull systems use visual controls and standardized work to manage material flow visually based on customer demand. Kanban/Pull systems can take many forms such as cards, totes or electronic signals. The common element is that the Kanban trigger is based on customer demand and not a forecast.
Stair 5 - Flexible associates and equipment - Having flexible equipment (quick changeover, line diversification) and flexible employees that are cross trained in multiple areas is a key driver in Lean cost structures and process agility. Operators and equipment are flexible to run multiple products with a quick changeover. Employees are formed into working groups (teams) and non-production time is allowed for team activities and problem solving.
Stair 6 - Supplier development - Supplier development and partnership is a must for a successful Lean enterprise. Supplier delivery and quality capability is crucial to successful Lean processes. Many Kanban systems have been compromised due to a supplier’s quality or delivery performance. Supplier relationships built on trust and treated as partnerships will reduce cost as a supplier will readily commit to small lot packaging, frequent deliveries, and quality improvements. Partnerships can be established through single sourcing and first-bid agreements as a supplier reaches predetermined quality and delivery levels.
As an organization implements Lean, a transformation begins in the culture of the organization. Decision-making is driven down the organization empowering employees to make change happen. Since processes are managed rather than people, each individual has visibility to the process measureables for his/her area and are capable of making correct decisions.
The common errors made by the executive level have been well documented. These errors can be summarized into several categories:
Although many companies have no chance at implementing Lean because of executive misunderstanding or focus. Other companies have executives that do not exhibit one of the problems listed above. These executives are committed to the Lean strategy yet the organization still struggles to implement the necessary changes for sustained success.
To better understand this, we must realize that Lean implementation is as much about cultural change as it is about process change. If you follow the works of Dr. Deming, management is responsible for 85% of process quality and the worker is 15% responsible. The more entrenched a company is in its process and subsequently its culture, the more difficult change will be and the management of the organization is responsible for 85% of the change, process and culture.
In that view, let’s review the stair steps again and review the transformation the organization goes through, process and cultural, to implement Lean and review the common mistakes that managers make in Lean implementation. Noting that companies that cannot sustain success at the lower levels cannot move further up the stairs and will not successfully implement any advanced Lean tools such as TPM and Kanban.
Stairs one and two – 5S and standardized work. Employees and first level supervisors are trained in 5S practices and standardized work. Operators may work in group Kaizen activity or individually to make quality and productivity improvements by implementing 5S. Time is allowed for operators to document the process for standardized work. The standardized work sheets are posted at the work station and updated routinely as improvements are made and are used as a training tool for new/rotating employees.
Common errors made at stair steps one and two:
Stair three – Visual controls. Visual control is the ability to view the operation’s performance by walking the processes. Obstructions of unnecessary equipment and racking have been eliminated and data is posted near the operation that details performance measurables for the area such as, TPM schedules, productivity, downtime and improvements. Supervisors and managers routinely walk the operation and question data and any deviations. Andon warning systems have been implemented to alert equipment downtime, quality concerns and material flow disruptions within the process. Support groups such as maintenance, materials and quality are trained to respond quickly to process deviations.
Stair four – Kanban. Kanban/Pull systems eliminate the need for system forecasting and synchronized customer demand to operational requirements. Work orders and production scheduling has been removed and visual Kanban cards/totes have been installed to trigger production and material flow. The operator uses the Kanban to determine manufacturing priority and not a master schedule. Kanban systems are implemented linking customer requirements of finished goods to manufacturing requirements. Manufacturing requirements are linked to component need and delivery from marketplace storage. Component requirements trigger supplier delivery taking into account order size and logistics timing.
Common errors made at stair step four:
Stair five – Flexible associates and equipment. When an organization achieves stair five employees are formed into teams and cross-trained to run multiple, if not all, stations in the team. Fixtures and tooling has been designed for quick changeover allowing the team to adjust product and cycle time based upon changing customer requirements. During periods of low customer demand, the team can adjust production and rotate team members to continuous improvement activities. The work group is given non-production time each week for team building meetings to review process measurable data, suggestions and continuous improvement activities.
Common errors made at stair step five:
Stair six – Supplier development. As a company implements the step of supplier development, the flow of material from suppliers is frequent and in small lots, preferably in returnable containers. Suppliers are working as partners and are involved in pre-product launch activities, cost/quality improvements, build schedules and delivery/quality issues. Suppliers receive quality and delivery performance feedback frequently.
Common errors made at stair step six:
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