HOW TO MANAGE YOUR LEAN INITIATIVE

In response to the current state of the economy and related events, our recent articles focused on Lean as an aid to coping and surviving in the face of rising costs and declining demand.

We explored, in some detail, why companies should embrace Lean. Our basic argument suggests that the cost reduction and performance improvement made possible through the application of Lean tools is a sound alternative to capitulation to global (or domestic) competition and/or a government bail-out.

This month we will assume we are writing for a senior management team that is 100 percent committed to a Lean implementation. Some may already have launched the effort and are looking for ways to accelerate or enhance the results of the program. Others may be looking for a way to begin while avoiding one or more "false starts." In either case, we will attempt to deal here with how to initiate and manage a successful Lean implementation.

The approach we offer here has been tried and tested by dozens of companies over the past 25 years. It is truly a proven path to success. Because of the scope and complexity of the subject, we will explore it in three installments.

TOP DOWN MANAGEMENT
In "The Top Ten Secrets of Lean Success" (Lessons in Lean, August 2007) we emphasized the importance of the senior management team assuming a strong leadership role in the Lean implementation:

"It is absolutely necessary that senior management people acquire a good understanding of Lean principles and practices. They must understand in a technical sense how Lean tools work together to bring about better performance and customer service. Only then will they see the deficiencies in the current state and be able to envision a greatly improved future state.

"With this future state vision, leadership can communicate to the organization a 'burning platform for change' and create plans for using Lean techniques to close the gap between the current and future state situations."

Figure 1 illustrates this idea. The "burning platform for change" is a key concept. The management team must be driven to a commitment to Lean by some set of conditions, characterized by both problems and opportunities, which they believe must be changed. These conditions may include any of the following:

? Competitors with superior capabilities with respect to customer wants and needs

? Opportunities to acquire new customers, or to do more business with existing customers, by adding or improving capabilities

? Deficiencies (waste) in one or more value streams that drive excessive lead time or cost

? Weaknesses in the continuous improvement effort revealed by a formal assessment using a Lean maturity model or similar criteria

By identifying and clearly communicating the reasons why change is necessary, leaders lay a vital foundation for the road ahead. We want every individual to be motivated to improve the business for the same reasons that we are.

ORGANIZING FOR SUCCESS
The structure shown in Figure 2 organizes resources in support of a Lean implementation in a particularly effective way. The World Class Business Improvement Steering Team is so named to indicate its role in managing all improvement activities, including, but not limited to, Lean tool implementation. This team is made up of the senior manager from each major functional area of the business:

? The President or CEO (Chairman)

? VP Operations

? VP Sales and Marketing

? VP Engineering

? VP Human Resources

? VP Materials Management

? VP Information Technology

? Union or Shop Representative

How the functions are named and organized will vary from one company to the next. The important thing is to have each function represented on the Steering Team.

ROLE OF THE STEERING TEAM
In general terms, the Steering Team will:

? Manage change and learning

? Create and constantly update an action plan

? Maintain a company score card that measures the results of improvement efforts

? Provide resources

? Manage World Class Enterprise (WCE) communication

? Monitor improvement team activity and give support as needed

Change Management. The Steering Team must understand the nature of organizational change and recognize that we can't really manage change, but we can manage a learning process that minimizes resistance to change. It is the thoughtful transfer of new knowledge to those affected by changes to business processes that cushions the impact and insures a smooth transition.

One of the things that must be learned by the organization is the leaders' vision of the future. To accomplish this, the Steering Team will develop and maintain a visible "Transformation Map" that captures the "burning platform for change" in a succinct vision/mission statement and ties the action plan directly to the accomplishment of the mission. The Transformation Map is shared widely and often throughout the company. (Note: The development of the Transformation Map will be detailed in future articles.)

Action Planning. Referring again to "The Top Ten Secrets of Lean Success," we find that the "action plan" is comprised of specific projects:

"Select early improvement projects that focus on market driven imperatives and critical cost drivers. Lean represents a powerful set of problem-solving weapons, so why not deploy them on the company's major heartburn?

"Use a combination of value stream mapping and strategic goals of the business to identify the highest leverage opportunities, then design and execute improvement projects (kaizen events and process re-engineering efforts) that result in significant waste and cost reduction.

"Avoid a 'shotgun' approach characterized by many easy, low-risk projects. The results won't get anyone's attention. Don't forget to set improvement targets and measure performance at the cell or department level. This is where we get a grip the parameters that drive excessive cost and lead time."

To this we add that each project should be kicked off with carefully developed team training that 1) provides the team with the knowledge and skill necessary to carry out their project, and 2) adds to a general base of knowledge that will mitigate resistance to change.

Measure Improvement. Early in the improvement process, the Steering Team will develop a custom Score Card that will measure the effects of the program. The following example, taken from an actual company scorecard illustrates the kind of data that is typically tracked.

The scorecard is set up to capture baseline performance, future targets, and current levels. It is usually updated and reviewed by the Steering Team on a monthly basis. Trends in these measures are nearly always indicative of the true effectiveness of the improvement effort.

Provide Resources. The commitment of resources is often the real test of management's belief in the improvement process. Support for the improvement program will range from capital expenditures, to releasing workers for kaizen activity, to field trips, to outside resources of all kinds. Projects are sequenced to prevent financial or work overload, but the steady application of time and money to "leaning out" the business is the surest indicator of Steering Team's commitment.

Manage Communication. A key role of the Steering Team is to exchange information with the organization about the Lean/WCE program. This communication is both formal and informal, and it will happen in many ways, including:

? Documenting and displaying future state Value Stream Maps

? Maintenance of the Vision/Mission Statement and the WCE Transformation Map, including the up-to-date action plan

? Posting of a future state layout

? Posting of the company score card

? Active support and promotion of WCE program values

– Customer care

          – Employee role

          – Manager role

          – World Class business processes

? Demonstration of the new values of absolute quality and waste elimination by modeling:

          – Pro-active behavior

          – Beginning and ending meetings on time

          – Use of consensus decision making

          – Supporting "do it right the first time"

          – "Walking the Talk" in every way

          – Personally embracing the change

Steering Team members can make or break the program by how aggressively they communicate about and promote the improvement process. In a very real sense, the credibility of the group is at stake. A half-hearted commitment to Lean will be read almost instantly by the organization ? and no one will take it seriously.

Project Team Support. Companies become World Class competitors one project at a time. The Steering team will recognize this fact and strive to insure that every improvement project is carefully planned and executed. They will insure that the teams are populated with the right mix of talent and skill, and, as noted above, they will provide the training necessary to supplement the collective knowledge of the group.

Necessary outside resources will be provided, progress will be carefully monitored, and teams will be given the opportunity to report to the Steering team the results of their projects. Crisp, relentless execution of properly focused improvement projects will be seen as the "bottom line" responsibility of the Steering Team.

CONCLUSION
With a basic superstructure in place for governing the improvement process, the company is prepared to escape the doldrums imposed by an organization with no clear mechanism for driving beneficial change. Having defined the role of the Steering Team, we are now prepared to explore the role of the Lean/WCE Coordinator, key outside resources and the improvement teams. We will undertake this task in next month's column.

– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –

Dave Dixon is the executive vice president of Technical Change Associates, Inc. and a registered professional engineer with more than 35 years of experience in lean manufacturing, Six Sigma and other improvement initiatives. For more information, call 801-621-8980 or visit www.technicalchange.com.