Gemba Coach by Michael Ballé

Gemba and Quality

Wed, 01 Feb 2012 05:00:00 GMT

Dear Gemba Coach,

We’ve made good progress on quality with Six Sigma, but we’ve reached a plateau. I’ve met a lean consultant who tells me I should spend more time on the shop floor, but I fail to see how it would improve quality?

Good question. The link is not immediate and many who have tried “management by walking about” have been frustrated by the lack of visible impact, beyond initial low-hanging fruits. Let’s take a step back. Things improve if there is some sort of improvement – learning mechanism in place, right? We don’t go to the gemba open eyed, just to “see” what’s going on. This is more like industrial tourism, and it gets tedious and is annoying to the staff. Gemba walks are all about checking that our improvement strategy is being implemented at the right pace to get the intended results. Going to the gemba is about checking (1) clear control points (where do I see that results are forthcoming) and (2) how good the improvement process really is (are people filling out the paperwork or really thinking deeply about their issues).

Quality is a difficult topic, and there are a variety of improvement mechanisms to implement in order to break the common barrier of rejects accounting for 2% to 5% of sales. I remember once showing a sensei our efforts to get quality rejects under 1% of sales and he just said: “add a zero.” It took me a while to figure that the challenge was to move from 0.9 % to 0.09 %. Let’s take the issues in sequence.

3 Duties

First, quality defects still reach customers. This means that someone either during the process or at final inspection made a mistake (an honest one) and packaged a defective product to ship to the customer. This is a basic containment issue. They didn’t see there was something wrong with the part. As employees are NOT GUILTY, going to the gemba is the way to step into the cell and ask oneself: would I have spotted that bad part? The chances are there is nothing there to help you in terms of:

Constant training of operators in observation
A reaction system that encourages them to signal doubtful-looking parts.

Within the lean framework, frontline workers have three basic responsibilities:

Follow standard work and work accurately without mistakes in quality and safety
Report any abnormality to a more senior person
Participate in kaizen and teamwork activities, and propose kaizen.

None of these missions are easy in themselves, and, at the gemba we ask ourselves whether the organization we have in place helps or hinders operators to fulfill their responsibilities.

Melding Observation and Action

On the quality front: how often are operators trained to Deming’s Quality 101 principle of distinguishing a bad part from a good one. This is by no mean simple as many bad parts at customers were tested but allowed to go through because they were considered “borderline” by the line. Defining and teaching boundary conditions is an essential job of the quality department, to help value-adding staff to see the difference between a bad part and a good one. One key role for management on the gemba is to ensure this process is in place and working properly. Ahem.

Secondly, what can an operator do if they have a borderline part? In most industrial companies I know, not much. At best, put it aside and never hear about it again. The “andon” system in lean blends observation and action. When an operator has a doubt about the part (it feels wrong) they pull on a cord which calls their team leader (a more senior operator, but not a manager) who knows enough of quality standards to decide on the spot whether the part is okay or not and whether something obvious can be fixed in the process (operator not following the standard).

The team leader has about one minute to make that call until the line stops and frontline management comes running. To achieve this requires: (1) rigorous and constant training of team leaders (who, in fact, train operators on the job through responding to the andon calls) and (2) the management structure to sustain this, with, in particular, quick managerial and support service reaction to problems which can’t be fixed in under one minute.

This is not a walk in the park, and gemba presence is essential to implement such social systems. Most companies I know look at quality issues from the management perspective: once we have an acknowledged problem, how do we coordinate departments to solve it. The specificity of the lean approach is to look at quality from the operator’s perspective, and understanding this often necessitates hours, days, weeks, months, years on the gemba before it becomes second nature.

Secondly, once we’ve taught the process to spot bad parts and stop them, we can wonder what created the bad part in the first place. This is what six sigma projects tend to target. Here again, presence on the gemba is essential to see that the improvement mechanism is in place and works properly. Once it’s clear the problem goes beyond the cells’ ability to improve because it involves either maintenance, engineering or purchasing (many quality issues are caused by poor quality components), the company needs to have a system in place which controls the response lead-time between spotting the problem and resolving the problem (i.e., it never shows up again).

This is far from obvious. Most people are overworked and technical departments tend to make their own priorities. What comes from the shop floor is taken into account, then fitted into a queue somewhere and treated when there is time. This makes sense from the department ‘s own priorities, but the upshot is that value-adding processes are often left with binning bad parts for months. Management’s role at the gemba is constant checking the technical problem-solving process and controlling the lead-time.

Engineers Have a Role

Quick response is all the more pressing in that, like a murder mystery, the longer investigators take to get the scene of the crime, the higher the chances of the real culprit to go away. If the machine is not stopped at the precise moment it made a bad part and if technical people can’t inspect its condition right away, finding the root cause of the problem is unlikely. Without root cause, the remaining answer will be to replace this or that which looks out of condition when we finally look at the machine, and invest in newer equipment - not very lean.

Managing the problem solving process has a further impact – it should feed into another learning mechanism: getting manufacturing engineers to better understand their machines so that they continuously improve their capability. One exercise I ask manufacturing engineers to do before they design the next generation machine is to improve availability and capability of the current equipment by ten percent in one week, as a “workshop.” They grumble that what’s the point since this is exactly the machine they’re going to replace soon. The point is, of course, that they understand the downtime, slowdown and quality issues of the current technical process well enough not to reproduce the problems in the next generation machine.

Finally, the root cause of many quality problems is in the very design of the product. Engineers tend to solve functionality issues – it’s hard enough to get the damn thing to work as it’s supposed to. Most of the time, they’re simply unaware of the difficulties some of their technical choices create for the rest of the process. A learning process that teaches engineers how to design quality into the product is worth several points of EBITDA.

Spending time at the gemba doesn’t affect quality in any direct way – no manager is going to start making or checking parts. Just walking around and shaking people’s hands won’t improve quality either. However, quality will improve as the result of several improvement mechanisms kicking in:

Improving the ability to spot a bad part by looking at it (or testing it)
Reacting quicker to bad parts so that they are taken into account and the conditions of making the bad part can be observe and dealt with at team level
Reacting quicker from a technical point of view to keep value adding staff in success conditions and to observe better what went wrong with the process or equipment
Improving the integration of what we find out in the design of new machines and equipment
Integrate what we find out in the design of the next generation of products.

None of these processes are easy, and people will resist the learning part as they just want to deal with the issue and move on to the “real work” of making parts, purchasing machines, CAD designing parts and so on.

The “A” Team

Andon is a tool to embed learning into the day-to-day job. The operator pulls the cord when they have a question. The team leader answers. If the question is harder than it seems, the entire hierarchy gets mobilized sooner or late. The same sort of thinking can be applied to manufacturing engineering and product design. This is definitely a management job.

How can more gemba presence improve quality? You can draw a clear picture of the learning mechanisms that should be triggered by every operator’s doubt. You can then stand on the gemba and watch whether the improvement mechanism does kick in, and is followed to the A of the PDCA. When its not, you can grab people’s attention and repeat, repeat, repeat until they finally change their glasses and adopt a lean set.

Operator’s responsibilities are making parts according to standards, notifying abnormalities and proposing and participating to kaizen efforts. Similarly, management’s responsibility is to go and see at the gemba whether people do what they’re trained to do, to point out abnormalities, and to keep the impetus on problem solving until issues are fundamentally solved. This will improve quality.

Dear Gemba Coach Which is best for a lean environment, a U-shaped cell or assembly line? Why?

Wed, 25 Jan 2012 05:00:00 GMT

Dear Gemba Coach

Which is best for a lean environment, a U-shaped cell or assembly line? Why?

This is a question that comes up quite often – and the pros and cons of cells versus lines have been discussed at length, so let’s look at this from another angle: before you kaizen your existing operation, what is the problem you’re trying to solve?

Whether in a straight line (I-cell) or a U-shaped cell, lean thinking highlights two fundamental problems: ease of use and flexibility. The first issue is that operators have to be able to work safely, intuitively, and keep to quality and takt time requirements. The second is that operators have to be able to deal with continual change in terms of mix, volume, and new product introduction.

Issue number one is to keep the operator working in a strike zone, to use a baseball expression. Imagine a window in front of each worker where all the work happens. To visualize this, start by looking at feet movement (steps and rotations), then hand movements (stretching, turning), and finally eye movements. The operator should be able to do the work without ever moving his or her hands away from this strike zone.

Typically, in assembly, operators have to deal with a number of components they’re putting together, usually with some mechanical help. The problem is then to fit all components in front of them within the strike zone. Keeping takt time stable often involves stability of volume, but with great flexibility in mix (fractioning and mixing orders for heijunka). In this case, the shelf of components in front of the operator can expand rapidly if different products use different components. Since the strike zone cannot be expanded, this means using very small containers to hold all components in front of the operator. The team member is autonomous if he or she can build product A or product B according to how the kanban cards pull, and without needing any outside help to change over his or her workstation.

Assembly Line

Small containers of parts (they start being small enough when you can’t buy the containers in industrial catalogues but have to go to the supermarket for Tupperware instead) impose frequent resupply, and hence a “small train” or tugger. Very quickly, you’ll discover that the effectiveness of your workstation is directly driven by the tugger’s regularity, as any deviation will create parts shortages on the line. Consequently, one key problem to consider when organizing the cell is the train route.

In assembly, according to work content, operators will typically work within a defined area (defined by the components supply system) in front of them. If volume goes down, you might take a person out, and the zone will be larger (more work content). If volume goes up, the team leader might want to step in, making the operators’ work area smaller. In any case, having them work in a “U” doesn’t necessarily add any value – foot movement is essentially defined by the component shelf, and operators have to be able to pass on sub-assemblies from one hand to the next, as in a relay race. All in all, in assembly work, it usually makes sense to have a straight assembly line rather than a U-shaped cell. It’s also a cell – five team members, one team leader, etc. – but shaped as a straight “I” in order to make it easy for the tugger to supply work stations frontally by passing at the back of the station. This also makes it easy for operators to work laterally without having to ever turn around (definitely out of the strike zone).

Machining Cell

In machining, however, operators deal with equipment that has its own run time. A typical cell will have several consecutive processes, and, to keep work intuitive and safe, we don’t want to have the operator tied to the machine as it operates. In order to avoid wasting the operator’s time, he or she needs to be able to place the component, start the machine working and then move on to the next task while the machine processes. In this configuration, the operator will be walking somewhat around the cell, and it then makes sense to have short circuits. These kinds of operations usually entail less components, so the tugger is not so much of a worry, and we can start thinking in terms of U-cells rather than lines.

The key here is that in order to work continuously, the operator should be able to place a part, move on to the next machine and withdraw the machined part and seamlessly place it in the next process. Automatic ejection of parts is a key component to make this work. The second issue is that, as with the assembly line, the cell should be changeable autonomously (without requiring outside help) and easily. So the next big problem is how to design machines that can be changed, by the operator(s) alone (without specialized changers) and without creating greater walking distances in the cell. This tends to be quite a challenge and requires many PDCA loops to get it better. Last week I was in a factory where manufacturing engineers are working on new ideas for protective casing to let parts and people flow freely – and safely – and, well, it’s not easy. The biggest room remains room for improvement.

A U-cell is therefore better adapted to using in-out automated equipment. First, the operator should be able simply to push parts from one process to the other (no carrying). Second, the cell should be able to handle well the product mix (easy to change). Finally, the cell should be designed to handle volume changes too. If the cell is composed of two rows of machines face to face separated by about 1,20 meters, when demand is high, each operator can take care of one workstation, and when volume is low, one operator can take care of the entire cell by walking from one process to the other in a standard circuit.

Understanding the Problem

With these generic problems/generic solutions in mind, we can now look into the real problem: how are you going to get your people to figure it out. Just the other week I came across a fascinating example of kaizen at the gemba. The plant manager of a plants making car seats just-in-time, used the “pull” concept to improve the labor effectiveness of his assembly line by about 10%. Now, just-in-time plants are incredibly demanding as the OEM assembler expects seats to arrive for assembly in sequence throughout the day with a total lead-time of something between three to six hours. The pressure is relentless (if the seat is late the automobile line will stop) and the variety of seats is huge, so they need the information in order to build. There is a small buffer of finished seats waiting to go into the trucks for the five-minute drive across to the OEM’s line. Historically, just-in-time sites consider they don’t need to pull more rigorously because they already are pulled by the customer to a manic degree. But what this plant manager realized is that his frontline management kept trying to keep buffers filled at all times, and so created stop-and-go on the production line: early stoppages when a customer variation meant no more work, or rushes the moment the line started pulling again. This, in turn created overburden on employees (during the rushes) and quality issues with the seats, which generated more instability.

Working with the company’s sensei, he started a series of workshops and then kaizen efforts to pull more rigorously on his final buffer. In the end, they placed a mechanical stop on the buffer’s conveyor that pulled seats EXACTLY at takt time. This simple device stabilized the entire flow downstream, with all related benefits. But this is not the point. What the plant manager highlighted is the work he did with his middle-managers and frontline managers so that they themselves understood the problem. First they had to change their mind about what they measured and start worrying about in-process seats (between supplier and customer) rather than just trucks (if the truck is not complete, the customer line automatically blocks unloading). Then they had to understand the impact of their decisions on the stability of the assembly lines. Finally they had to work with team leaders to manage takt more rigorously at line level.

He is definite that if his engineers had come up with the technical solution, implemented it and he’d have to then get everyone to work accordingly, he’d have failed. He feels strongly that his site is already under enough pressure from the just-in-time situation without needing further tension from unnecessary conflict. In the end, his investment in time and effort has paid back further than he anticipated, and he is now thinking about working further with his own suppliers.

So, rather than worry yourself about what is the best solution in general, how about investigating how you’ll explain the problem to your line managers and team leaders so that they can come up with their own solutions. Line or cells are responses to technical drivers and there can be no once-forever right solution, as the situation changes all the time. However, if people have understood what they’re trying to get right - creating an environment where the operators can work safely and seamlessly at takt time whie changing all the time – they will start exploring and discover better and better technical solutions.

Believe that lean is about kaizen + respect. Kaizen is about improving the lines and respect is about creating an environment where people can succeed at their work, work safely, and have an input on how their work environment is organized. Technical solutions about how to have the “best” line have been around for decades, and I’m certain your engineers will know many of them. The issue here is respect. How do you get your group leaders, team leaders, team members and manufacturing engineers to work together on a shared problem in order to design the lines that best satisfy them all. That’s the real challenge.

Should we plan according to what we can do, or the other way around?

Wed, 18 Jan 2012 05:00:00 GMT

Dear Gemba Coach,

Should we plan according to what we can do, or the other way around?

The big idea behind takt time is that you adjust production plans to demand, rather than plan delivery according to production requirements. A core idea in lean is that sales pace = production pace. At the gemba this is often impractical, for a number of reasons. First, sales volume tends to vary from one day to the next whereas efficient production requires some degree of stability. Second, even if the overall sales volume is relatively stable, sales mix will vary from one day to the next, and production is rarely flexible enough to deal with such variations.

In assembly, for instance, one line or cell should be able to make any product at any time, and ideally follow exactly the sales pattern: one sold, one in the queue, one made. But when you go down to the shop floor, you find out that’s rarely the case. Most production cells are set up so that every product change requires emptying the component racks of the parts for this product, and refilling the racks with parts for the next product. There is no tool change as such, but production change is still disruptive because of component changes.

Years ago, I once asked a Toyota engineer why he was insisting so much on really small containers at the workstation – I couldn’t see what the possible gain in inventory was at the level of halving a container that was already quite small. “It’s not about inventory,” he answered, “but takt-time. Ideally I want to produce products exactly according to takt time, which means that I wont produce two same products in a row. The operator needs to be able to switch from one product to the next seamlessly, so they need to have all components of all variants at all times in front of them. Since space is limited at the workstation, this implies very small containers to fit them all within easy reach of the operator.”

Pressed to Be Lean

Similarly, one step further on the value-stream map (VSM), at the press, changing tools at every product is simply absurd. Assuming we’re willing to invest 10% of Overall Equipment Effectiveness (OEE), which is already a lot, in tool changes, a 15 minute tool change implies batches of 150 minutes of production (roughly, ten times the changeover time). If the press makes a part a minute, this means a batch of 150 parts of the same product. In many plants, press changes are closer to 45 minutes than 10, so it’s not unusual to find batches of 450 minutes (a full shift) or of an entire day.

Say the process is relatively simple, as with one press operation and then a simple assembly of adding a few components to the pressed part. Let’s assume that one press handles two high-runners, A and B, and three or four low runners, C, D, and E. After years of wrangling with the press shop about reducing batches they’ve accepted no longer to run the high runners once a week but twice. Allowing some time for changeovers, they run As on Mondays and Wednesdays, making 2,400 parts in six shifts, Bs on Tuesdays and Thursdays, making 2,400 parts as well in six shifts and make the X part (C, D or E) on Friday in three shifts – overflowing on Saturdays if need be.

In this situation the argument will be to plan the entire value stream (press + assembly) as the following:

	Monday	Tuesday	Wednesday	Thursday	Friday
A	1,200	0	1,200	0	0
B	0	1,200	0	1,200	0
X	0	0	0	0	1,200

Lean? Not so. Regardless what the press shop’s flexibility is, the demand for A is 2,400 parts, for B 2,4000 parts and, for C 400, D 400 and E 400 parts as well. So if we level the demand across the week, we end up with the following production plan:

	Monday	Tuesday	Wednesday	Thursday	Friday
A	480	480	480	480	480
B	480	480	480	480	480
C	80	80	80	80	80
D	80	80	80	80	80
E	80	80	80	80	80

Total daily demand is 1,200 parts whereas the press has a capacity of 1,350: 150 minutes are available for changeovers. If tool changeovers are 40 minutes, they should just about make it. But the moment one changeover takes, say, an hour, they start losing parts and won’t be able to fulfill the demand – plus all the extra hassle of doing four to five changeovers a day instead of one.

Press shops being what they are, whatever the production plan, they’ll stick to what they’ve agreed: run 1,200 parts of A on Monday, push them into the WIP warehouse and let assembly do what it will.

SMED Metric: Rabbit’s Foot or Chicken Leg

This is where lean kicks in. In the future state of the VSM every process owns its production. The press owns its inventory, so the parts hotel in the warehouse is shut and the press gets to keep all parts it produces. In this case, what the production plan tells the press is that it will come and pick up 480 parts of A, 480 parts of B, 80 parts of C, 80 parts of D, 80 parts of E at some point during the day according to how kanban cards flow in the pull system – regardless of how the press shop chooses to schedule its production.

This lean production plan doesn’t tell the press shop what to produce. It lets the press shop know what its responsibility is. At the press’ supermarket, the press shop has to make this number of products available every day of the week. Now, clearly, if it decides to produce 1,200 parts in one run, it means that at the end of Monday’s third shift, it will own 720 parts of A in inventory – and its parts supermarket needs to be large enough to accommodate this.

As you can expect, this will be a big fight as well as create the incentive for the press shop to get its changeover time down to the level where it can produce every part every day.

In fact, even producing once a day makes you carry huge inventory. Let’s consider that by improving the assembly line’s workstation, we can now produce parts in batches of one half hour. The pull system’s tugger can run through the press shop to pick-up parts accordingly every half hour – which means 45 pickups across the day’s three shifts. Since A and B are the two high runners, the train is likely to pick up some A every hour or so, and some B as well.

To follow the train’s pull ideally, the press shop should produce in 20 runs of 60 parts. This would mean 20 changeovers to be done in 150 minutes: 7.5 minutes per change over. SMED (single minute exchange of die) legend Shigeo Shingo is said to have walked through press shops with a rabbit’s foot and a chicken leg in his pockets. If the change-over was below the 10 minutes line (single digit), he’d pull out the rabbit’s foot. If not, you got the chicken’s leg. Changeovers of 7.5 minutes are not impossible – I’ve seen a 4,500 ton press, as large as a house, changed in five to seven minutes in Toyota’s stamping shop. But it’s quite a challenge. It’s lean.

All this to say that the leveled weekly plan is established according to averaged customer demand day per day. We average customer real demand over three weeks, and then we divide this by the number of worked days. This gives us how many parts will be picked up from the supermarkets in the VSM any given day. The steps in the process may not be flexible (or willing) enough to be able to build at that rhythm. They might have to build once every couple of days, or even (shock, horror) once a week. No matter. The shop’s abilities should not restrict the production plan. What is planned is their responsibility for the number parts to be made available on each given day. How they do it is a different debate.

Legend has it that Ohno’s last words were “no kanban.” Until all steps in the process can produce according to a perfectly leveled, fractioned and mixed schedule, we will have to batch, and so, to pull. Our capacity to do so should not affect the plan. On the contrary, the leveled production plan is there to tell us what we need to have available in our little cell’s shop, every day.

How Do I Plan for the Long Term?

Wed, 11 Jan 2012 05:00:00 GMT

Dear Gemba Coach,

I don’t know how to plan for two or five years out. As a plant manager, my requirement is to be able to look at the next 12 months. And to do this I rely on guidance from a familiarity with lean policy deployment. Yet I worry that my skills in leadership are lacking because I don’t have a clear sense of how to conduct this long-term planning. How do I look ahead for the long term?

If you’re asking whether you need a long-term Vision to succeed at lean transformation, I believe the answer is … no. What you do need however is a clear North Star. Let me explain.

Recently I was on the shop floor with a company that manufactures industrial equipment. Over the past five years they’ve doubled their volume without increasing headcount or investment. Yet their lean transformation has produced mixed results. Among the many positives: they’ve reduced their price (it’s a transfer price) by 4% to 5% per year, and improved quality dramatically. They’re getting something right, obviously, which shows in the EBITDA figures. Yet these advances have produced new problems. With the demand increase their customer lead-time has been growing steadily and they have failed to respond to date. The benefits of higher demand have made them reluctant to challenge the organization to reduce lead-time.

They have what might be called a good lean problem. They persistently and steadily deployed a lean quality policy (applying many elements of jidoka and flow), deployed a lean cost policy (through engineering work and flow – though not leveling), but are balking at deploying lead-time reduction. In other words, although they have learned the hard way that increasing customer satisfaction in quality and cost pays, they’ve not naturally applied this to lead-time as well.

When we investigated this problem more deeply we uncovered an important belief: their senior executives couldn’t accept the idea that working hard on quality and cost had actually boosted their market share (from less than 40% to over 65%) and increased sales. They were suspicious of this because most of their market visions have been proved false in the past turbulent years. So they were skeptical that their dogged work had delivered.

The Fab 5

The best reply to your question that I can think of can be found in George Koenigsacker’s book Leading the Lean Enterprise Transformation. He states clearly that you get spectacular result if you simply seek to:

Reduce accident rates by 20 percent each year
Reduce errors and customer complaints by 20% each year
Reduce lead times by 50% each year until you get to daily production cycles
Grow enterprise productivity by 15% each year

And this is what the North Star is about. There are five fundamental performance drivers that must improve whatever the circumstances, which are:

Quality
Lead-time (both to customers and internal)
Cost
HR development
New products

That’s all there is to it. Your enterprise will be transformed, and your results will be dramatic if you learn do what it takes to develop your firm’s capability to hit George Koenigsaecker’s numbers every year by applying:

Visualization of processes to reveal problems
Problem solving and kaizen to increase every individual’s capability
Process capability by adopting and maintaining smarter standards.

The interesting thing about building the company’s vision around such a North Star is that it doesn’t require a crystal ball. You don’t need to know whether the market is going to boom or bust. You don’t need to anticipate that your best engineer is going to defect to your main competitor. You don’t need to worry about what new thing politicians are inventing to stop us all from working serenely. You use the vision the other way around. You set yourself to reach these targets every year for the next ten years – taking into account market circumstances. THAT is the vision.

Once you’ve committed to these goals, and have found a sensei to help you learn the lean tricks to move forward on visualizing processes and developing people’s autonomy in problem solving, then the long-term vision emerges as a result of facing the challenge. More often than not, results appear before the long-term strategy is set. When people see the incredible payback (of the two companies I know well who started lean this January, one has already saved $1 million in labor costs and the other has doubled its cash) they then commit further to the approach. After a couple of year of facing the Safety Quality Lead-time Productivity New Products challenge in turbulent market, PDCA cycle after PDCA cycle, usually a long-term strategy emerges as senior management learn to draw the right lessons from their markets. This makes further transformation easier.

Lean and Sales

There are three main barriers to adopt the North Star approach. Firstly, many managers simply can’t see how working on the five drivers will actually improve their financials – they can’t believe that waste in their processes could amount to millions of dollars. Secondly, they don’t believe that such changes are possible in the current context of their company. Thirdly, they rarely have the management gumption it takes to stick with 20% improvement per year BY developing people, not just WITH developing people.

I have to confess I’ve often been puzzled by the first point myself until I figured out that it’s not about the process, but about the PRODUCT. The essential link here is between lean activities and sales. One thing we know is that sales are driven by:

Market share (the bigger, the better)
Reputation of the product

That’s not surprising, if we look at it from the customer’s perspective. We’re all loss averse and in choosing a product, more often than not, we make the safe choice. The dominant product on its market is a fairly safe choice: we’re surrounded with people who’ve made the same purchase. The product reputation is the other indicator we have about the product’s value (usually, we don’t know much about the product itself, we’ve got other things to worry about, so hearsay is as good an indicator as any other).

So, if you reduce quality complaints by 20% every year, if you reduce customer lead-time by the same amount every year, and if you keep a fair (market based) price – chances are your reputation will increase, which leads to greater market share, more sales and so on. Oddly, in my experience the early improvements in EBIT don’t come from cost reductions per se, but from sales increase. Similarly cash gets better quickly as lead-times (and inventory) are reduced, which helps with delivery performance, and, again, more sales. As a rule of thumb, half the lead-time, twice the growth.

The staggering amount of waste carried in costs of rework and overproduction usually becomes visible in the second year as people better understand the implications of the lean activities they’ve carried out so far. By and large, it’s much easier to carry out a lean transformation if you’ve already done one simply because you KNOW (as opposed to hope) that by following the North Star, results will come.

The second barrier is that people don’t believe the company can change its own culture. For instance the managers of the industrial manufacturer struggling with lead-time don’t believe they can get sales, production, logistics and purchasing to talk to each other sensibly in order to fix the causes of long-lead-time.

This is the beauty of the pull system. Once you’ve committed to pulling, issues will crop up one at a time and you can progressively build the working relationship across functions. By committing to reducing lead-time by 50% (or even 20%), and adopting JIT tools, you’ll uncover problems that involve each of the actors and force them into aligning on one simple objective: customer delivery on time (of only good products).

So, here again, don’t worry about the overall vision. Aim for 100% on time delivery and pull! The vision will clarify itself as people learn to solve problem after problem.

Yes, I am saying that you don’t need a long-term strategic vision to transform your company. You need to commit to improving Safety, Quality Lead-time, Productivity and Product development and then scratch your head with your teams and roll up your selves and GET IT DONE.

When I first studied lean I repeatedly ask the Toyota engineers working with a supplier to give me their roadmap, their Ariadne’s thread so that I understand what they were doing. They didn’t have one they kept telling me. They solved problems as they appeared. I now believe them. They didn’t have a preconceived idea of what problems they would encounter. They were committed to the North Star and to keep digging at it by kaizening problems away. Forever.

Which is the core issue. We might not need a “vision”, but we do need relentless commitment to achieving the North Star challenges through repeated kaizen, whatever the circumstances. The market crashes, and volume plummets, use the down time to do kaizen. The market booms and volume skyrockets, hire the people you need to keep doing kaizen. Improve. Improve again. I’m willing to be that as you do this you will develop a real long term vision, but the real difficulty is refining our understanding of the challenges year after year, and never dropping the kaizen ball.

The information about this is all around. It’s in Lean Thinking. It’s in George Koenigsaecker’s book. It’s in every workshop conducted by Orry Fiume. It’s in The Gold Mine and The Lean Manager. The real difficulty is recognizing it as we read it. We are so conditioned to the traditional worldview of strategic vision followed by execution that it’s hard to buy into the idea that improvement, year after year, will deliver massively more than the Grand Plan. Physician: heal thyself. Lean expert: have faith in lean thinking!