Tag Archives: lean management

How to Get a New Management Strategy, Tool or Concept Adopted

Often when learning about Deming’s ideas on management, lean manufacturing, design of experiments, PDSA… people become excited. They discover new ideas that show great promise to alleviate the troubles they have in their workplace and lead them to better results. But how to actually get their organization to adopt the ideas often confounds them. In fact, I believe most potential improvements efforts may well fail even before they start because people can’t get past this problem.

I believe the way to encourage adoption of management improvement tools, methods and ideas is to solve people’s problems (or give them new opportunities). Instead of trying to convince people by talking about why they need to adopt some new ideas, I think it is much better to show them. To encourage the adoption of whatever it is (a philosophy like Deming or a new tool) try to find projects that would be good candidates for visible success. And then build on those successes.

For adopting whole new ways of working (like lean thinking) you go through this process many times, adding more and more new ideas to the accepted way of doing things. It is a bit easier if you are the CEO, but I think the strategy is very similar whoever you are. For smaller efforts a boss can often just mandate it. But for something like a large improvement in the way work is done (adopting a lean management system, for example), the challenge is the same. You have to convince people that the new methods and ideas are valuable and that they can use the ideas to help improve results.

Start small, it is very helpful if initial efforts are fairly small and straight forward. You often will have limited resources (and limited time people are willing to invest) at first. so start by picking projects that can be accomplished easily and once people have seen success more resources (including what is normally the most important one – people’s time) should be available. Though, honestly getting people to commit will likely be a challenge for a long time.

It is a rare organization that adopts a continual improvement, long term focus, system thinking mindset initially. The tendency is often strong to focus on fire fighting, fear (am I taking a risk by doing x, if I spend time improving y – what about the monthly target my boss is measuring me on…) and maintaining the status quo. It is baffling to many hoping for improvement, when you have huge successes, and yet the old way of doing things retains a great hold. The inertia of organizations is huge.
Continue reading →

The Toyota Way – Two Pillars

Toyota is receiving plenty of criticism now, much of it for good reason. There is also a large amount of psychology involved. From what I have seen, the insurance companies still see better claims history (fewer and lower cost claims) against Toyota than other manufacturers. And there is another strain that seems to enjoy criticizing what has been praised. Toyota does need to improve. But that is improvement of the existing management system, not a need to radically change the management of the company.

I think Toyota, even with the problems, is a fantastic example of a very well managed company. Yet even with all the study of lean manufacturing even basic ideas are overlooked. For example, the two main pillars of the Toyota way are “continuous improvement” and “respect for people.” For all of us, it is valuable to refocusing on core principles. We are too often looking for the next new idea.

This is one way of looking at the pillars of the Toyota Production System, from the Toyota Technical Center – Austrailia

Image of Toyota's pillars of management: respect for people and continuous improvement

Continuous Improvement means that we never perceive current success as our final achievement. We are never satisfied with where we are and always improve our business by putting forth our best ideas and efforts: we are keen to create better alternatives, question our accomplishments and investigate future definitions of success.

There are three building blocks shaping our commitment to Continuous Improvement:

1. Challenge – we form a long term vision, meeting challenges with courage and creativity to realize our dreams;
2. Kaizen – we improve our business operations continuously, always driving for innovation and evolution
3. Genchi Genbutsu – we go to the source to find the facts to make correct decisions, build consensus and achieve goals.

Respect For People refers to our own staff as well as the communities and stakeholder groups that surround us and we are part of. We respect our people and believe the success of our business is created by individual efforts and good teamwork.

Respect For People is translated in:

1. Respect – we respect others, make every effort to understand each other, take responsibility and do our best to build mutual trust
2. Teamwork – we stimulate personal and professional growth, share the opportunities of development and maximize individual and team performance.

These elements combined define our corporate DNA, provide a way of operating that is recognised by each and every Toyota-member around the globe and enables us to sustain our success in the future.

Back to Basics for Toyota by Akio Toyoda

When my grandfather brought Toyota into the auto business in 1937, he created a set of principles that has always guided how we operate. We call it the Toyota Way, and its pillars are “respect for people” and “continuous improvement.” I believe in these core principles. And I am convinced that the only way for Toyota to emerge stronger from this experience is to adhere more closely to them.

While recent events show Toyota obviously needs to improve, that has been true all along (it is just more obvious lately). Some may see this as an indication that these lean manufacturing ideas based on Toyota’s practices are no better than other management practices. I don’t believe this. I feel just as strongly about the value of lean management as ever. I think that the recent events show you that no matter how well an organization in managed there is plenty of room to improve. Toyota never was close to perfection. They have much to improve, but they are still one of the best managed companies in the world.

My comments in 2005:

I think the instances of such failures are just a sign that even Toyota still has quite a bit to improve. I think this announcement likely is a result of common cause variation (it is the natural result of the current system). The natural result (of the system) is not that they have this particular failure, but that this recall is consistent with the % of vehicles that required a recall of this general character. I believe they are getting better over time but they still have a long way to go. With a result based on common cause you want to look at the entire system when designing an improvement plan not at the root cause of the seat belt issue. See Responding to Variation online and the book, Forth Generation Management, by Brian Joiner.

And my comments in 2007:

I don’t agree that they need to rethink their purpose in life (I have a feeling that is taken out of context). They need to maintain and maybe even increase their commitment to their purpose in life.

Continue reading →

Lean Inventories Do Not Excuse Failing to Deliver

Low inventory levels do not mean failing to have products available for customers. Now, if you manufacturing in huge batches and can’t respond to customer feedback then it might mean failure to predict customer demand does mean failure to deliver. But lean thinking has shown how to avoid this problem. People need to adopt lean manufacturing practices and gain the benefits of low inventory levels without the costs of failing to deliver what customers want.

Sorry Santa, We’re Out of Stock

The “it” gifts this year could swiftly vanish from store shelves, as retailers, with nightmares of Christmas 2008 markdowns dancing in their heads, have slashed inventories to some of the leanest levels in recent memory.
…
Retailers themselves are battle-scarred by last year’s fourth-quarter fiasco. Following the financial meltdown of September 2008 and amid the most severe economic crisis since The Great Depression, consumers retrenched.

That’s when stores hit the markdown panic button, slashing prices upwards of 75 percent. The result was the worst holiday selling season since 1970, according to The International Council of Shopping Centers.

But although leaner inventory levels should drive profit margin gains this holiday, “retailers might not have enough inventory to fully satisfy demand,” said Citigroup retail analyst Deborah Weinswig, in a research note. It is a risk they are willing to take.

“They would rather lose a sale than take the markdowns they had last year,” said Goldman Sachs analyst Adrianne Shapira.

The retailers need to design their systems with lean thinking in mind (not lean – as in cut expenses without thought). And they need to work with suppliers using lean manufacturing principles.

Don’t Hide Problems in Computers

Making things visible is a key to effective management. And data in computers can be easy to ignore. Don’t forget to make data visible. Paul Levy, CEO of Beth Israel Deaconess Medical Center in Boston recently hosted Hideshi Yokoi, president of the Toyota Production System Support Center and wrote this blog post:

Together, we visited gemba and observed several hospital processes in action, looking for ways to reduce waste and reorganize work. It was fascinating to have such experts here and see things through their eyes. Mr. Yokoi’s thoughts and observations are very, very clear, notwithstanding a command of English that is still a work in progress.

The highlight? At one point, we pointed out a new information system that we were thinking of putting into place to monitor and control the flow of certain inventory. Mr. Yokoi’s wise response, suggesting otherwise, was:

“When you put problem in computer, box hide answer. Problem must be visible!”

The mission of the Toyota Production System Support Center to share Toyota Production System know-how with North American organizations that have a true desire to learn and adopt TPS.

Management Improvement Carnival #30

Please submit your favorite management posts to the carnival. Read the previous management carnivals.

How not to improve a process – “It is not enough to think you know what’s right for the process, if you don’t understand how the process works, then don’t play with it”
A tour of a lean-inspired clinical laboratory by Ted Eytan – “In the design, which involved a labor-management partnership, the team elected to replace a million-dollar conveyer belt system with a $200 dollar cart to move specimens to the work area.”
Should you hire specific experience, or the ability to learn and lead? by Kent Blumberg – “is the hiring process about what’s easy, or about making a great decision for the long term? I hope it’s about a great decision.”
Toyota’s Value Innovation: The Art of Tension by Matthew May – “But the implied question for all of us to consider in light of the above is this: are resource constraints enabling or preventing innovation?”
One Piece Flow versus Mass Production by Ron Pereira – webcast of the traditional “mass production” manufacturing technique square off against the lean “one piece flow” methodology
Deming on leadership by Shaun Sayers – “We could therefore conclude that a system that is pock marked with such “work-arounds” is likely to be suffering from poor leadership. A tell tale symptom”
Toyota’s Growth, Globalization, and Training by Mark Graban – “Toyota isn’t stuck in their own past, why should we be?”

Continue reading →

From Lean Tools to Lean Management

From lean tools to lean management [the broken link was removed] by Jim Womack:

The attraction of tools is that they can be employed at many points within an organization, often by staff improvement teams or external consultants. Even better, they can be applied in isolation without tackling the difficult task of changing the organization and the fundamental approach to management. I often say that managers will try anything easy that doesn’t work before they will try anything hard that does, and this may be a fair summary of what happened in the Tool Age
…
Teach all managers to ask questions about their value streams (rather than giving answers and orders from higher levels). Turn these questions into experiments using Plan-Do-Check-Act.

Only management by science through constant experimentation to answer questions can produce sustainable improvements in value streams. ( Toyota’s A3 is a wonderful management tool for putting science to work.)

He is right. The tools are useful. The much more significant changes are in the management suite not on the shop floor (or cubicle farm). Even on the shop floor there is room for huge amounts of improvement. In the c-suite I don’t know how to explain the amount of work left to do. Lets say this – there is much much much more improvement left to do than has been done so far.

Lean Construction

Lean Manufacturing in the Construction Industry [the broken link was removed] by Eric Sander:

In a radical departure from construction on site, Bensonwood Homes of Walpole, New Hampshire, has begun assembling major wall and floor components of their custom homes in their shop. These sections are delivered and assembled on site to reduce the construction time and improve quality. This approach is common in Japan. Toyota Homes and Misawa Home prefabricate custom homes in their factory for onsite assembly. Tedd Benson has recognized the advantage of this approach and is attempting a new approach for custom homes in the US.

Be Thankful for Lean Thinking

graph
Topics: Management Improvement and Economics

The Dallas Federal Reserve white paper, Supply Chain Management: The Science of Better, Faster, Cheaper [the broken link was removed] by Thomas F. Siems provides a macroeconmic view of what to be thankful due to the practice of lean thinking:

Through better information engineering, supply chain improvements have resulted in a reduced bullwhip effect, lower inventory levels, reduced logistics costs, and streamlined payments. These improvements appear to have helped produce macroeconomic benefits such as more stable economic output and higher productivity growth.

Continue reading →

Lean Government

Making Government Work [the broken link was removed] by Tom Vilsack via Panta Rei [the broken link was removed]:

We redesigned the child welfare system to place greater focus on the complex and hard cases that people live out every day. We cut down paperwork so workers would have more time to spend helping children. That effort was part of our charter agency effort, which the Kennedy School at Harvard and the Ash Institute recently recognized as an Innovation of the Year award winner.

We committed ourselves to reconfiguring the way permitting and other processes worked in our government. By using Kaizen and other forward-thinking management techniques, we cut down the amount of time and staff used in the permitting process without sacrificing quality.

All of these efforts and results are outlined in our results website, at www.resultsiowa.org.

The Innovation Awards have long been a good source for learning about some of the good work done in government.
Continue reading →

The Dramatic Spread of Lean Thinking

Topic: Management Improvement and Economics

The Dramatic Spread of Lean Thinking [the broken link was removed] by Jim Womack:

Currently we are experiencing an explosion of interest in applying lean thinking to practically every process in every corner of the world. And it is causing all of us in the Lean Community to think about how we can best serve the needs we are hearing about.
…
I am delighted with the spread of lean thinking far beyond the factory and far beyond the high-wage economies to every corner of the world and to every value-creating activity. My greatest concern is that we bring the best methods to bear and create the maximum amount of knowledge exchange across the global Lean Community so these initiatives will all succeed. Life will be better for all of us if they do.

Life indeed will be better for all of us with the improvement of management. The benefits of economic success are large. Good jobs are desired everywhere: USA, India, Germany, Singapore… Those jobs provide positive externalities that create a reinforcing loop of improving conditions.
Continue reading →