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Live Blogging the Lean Transformation Summit, Day 1

by Tom Ehrenfeld
March 5, 2014

Live Blogging the Lean Transformation Summit, Day 1

by Tom Ehrenfeld
March 5, 2014 | Comments (2)

Lean in the World (3:30)

Couple of quick thoughts as a productive day of lean sharing winds down.

We will say much more about lean product and process development in the next weeks and months, but couldn’t keep from sharing a few tidbits. Today John Shook introduced a new book from LEI, the second edition of Lean Product and Process Development by Allen Ward and Durward Sobek. He brought Durward Sobek and Jim Morgan on stage to discuss what he calls “one of his favorite lean books.”

When asked to define the aim of lean product development, Durward paraphrased Allen Ward with this reply: “To make a profit. If we don’t make a profit for our company then we don’t get to do it anymore. We want to focus on the value to the customer and a delivery system that can deliver it to the customer at a price point that we can make a profit from. And the role of product development in all of that is to define what that value is…by the time the product gets to the showroom you have defined the value to the customer.”

Signs of real lean progress in the world: this morning we heard a compelling lean success story told from the very top. CEO Mike Lamach of Ingersoll Rand shared the nuts and bolts of this company’s impressive lean journey; the mere fact that he shared this personally marked an important event for lean everywhere.

His talk was followed by Bill Owad of Cardinal Health sharing the victories of a 9-year (and counting) lean initiative. They have trained “only” 300 managers to date and need about four times that number. What a great problem to have.

At an afternoon session today I was treated to a video of Washington State Governor Jay Inslee making a public speech about his commitment to applying lean thinking throughout state government. Not platitudes; he shared lessons learned from his own gemba walks at Virginia Mason and Boeing, and his team showed us that the state takes this work seriously. 

As I write these words, I am listening to Pat Curtain of Food Bank for New York City, which is now guided by Toyota's kaizen approach in realizing its mission.

So while we certainly have new fields to enter, there’s a great deal that is new in the state of lean that deals with new levels of implementation. Broadening and deepening lean transformation through nothing more than years of patient, rigorous, mindful work. 

A Healthy Lean Journey (11:30AM)

Great talk by William Owad, SVP Operational Excellence at Cardinal Health on the company’s 9-year lean transformation. As John Shook notes, “We have organizations that can do this work short-term—the issue is how do we sustain it.”

Bill shared an inspiring talk on what this means at Cardinal Health Care, a $100 billion Fortune 25 company with 33,000 employees. In 2004, company leadership got religion, recognizing that lean/continuous improvement/operational excellence was “absolutely the right thing to lead to a sustainably competitive enterprise.”

The situational challenges at the time were deep and varied. Huge opportunities (requirements?) for improvement were called for in everything from manufacturing to delivery of goods to employee morale. Leadership was surprised to learn that customers at the time considered price to be a less important factor than other qualities. When considering deals, customers prioritized reliable service, repeatable service, quality work—with price following. They valued sustained performance.

And so Cardinal embarked on a massive lean (or whatever term you choose) journey. After benchmarking best practices in other companies and doing an intensive internal assessment, leaders concluded that the company lacked a nucleus of thinkers who could create a platform of continuous improvement. And so they set out on a path to create that platform. Bill points out, “This was never a conversation about a program or a product but an organizational strategy.”

Fast forward to today. Nine years later Cardinal has dramatically boosted employee morale, dramatically improved key metrics regarding inventory, cycle time, quality…while creating more than $1billion in economic value-added. The key here is recognizing the long arc of this work. Owad broke it down into roughly three stages, which correlate to what Shook called “attrition, osmosis, hope.”

First came three years of intensive kaizen training, what Owad called a “run to the classroom” surge. Many small gains were realized, but people found the tools to be necessary but not sufficient. They asked, “is this really sustainable?”

So Cardinal identified “lean accelerators” to close the gap between where they were and where they wanted to be. Rolling out a lean road map to success helped everyone doing the lean work better understand the Purpose and context of this learning. It gave them essential framing for this activity. “The hardest part to share with people is that this is a journey,” says Owad.

And thus the current phase, which has been all about building on the previous improvement work by developing lean leaders everywhere. Deliberately. The basic approach is helping individuals learn by doing and then asking them to coach and teach. Give people deep experience and then embed them in management roles. Owad said that to date he has helped move 300 people into leadership roles in the past 9 years—a number that does not yet represent critical mass (there are 1300 directors) but one which offers hope. 

“Do we have the right lean behaviors in our leadership teams?” asked Owad, adding, “Not yet.” Transforming the business through lean has been very much about training/developing people and embedding them everywhere—while continuing to conduct massive kaizen everywhere (roughly 7000 kaizen events annually companywide.) Owad candidly shared that he is not yet convinced that they have created something that is sustainable across the middle of the organization. Making this happen is a priority.

Cardinal prioritizes creating lean leaders as a core activity. It is doing terrific work simply developing an understanding of the leadership behaviors that are needed to meet their goals. They have set an objective of embedding a consistent understanding of Lean Management/Lean Enterprise everywhere.  

Stay tuned for more on this story over time, as I will go out on a limb and predict a lot more important news to share and learn from regarding this work.

From Lean Upstream to Lean Mainstream (9AM)

Greetings from Lean Orlando for this year’s lean lollapalooza. It’s a great crowd of folks whose sleeves are already rolled up to reflect on how things stand, what work there is to do. Notable for diversity of industries represented: food (pasta, licorice, wine), manufacturing (GE, Herman Miller, much more), health care, insurance, financial services, energy, government, and much more. Indication of lean continuing to gain traction….everywhere.

LEI CEO John Shook kicks off with a casual look at current state of lean. Shares that the system we know as lean was given a name roughly 25 years ago, around the time that the quality movement emerged (the current quality movement). “We at LEI have ambitious aspirations—to make the world better,” he states modestly. We see this happening through diversity of participants here, with about half in manufacturing and the other half in a range of work.

“One of the things we find is that lean thinking is going mainstream,” Shook notes, adding, “We want to see it everywhere.” As evidence he shares an entertaining clip from the BBC soap opera Holby City, featuring a hunky new doctor who talks the walk about Lean. He shares news articles reporting on lean construction, lean law firms, and even a lean drug ring applying JIT techniques.

As he tees up the speakers and workshops to follow over the next two days, Shook reviews the Lean Transformation Model and reminds us all that it is situational. What problem are we trying to solve?

What problem are you trying to solve?

The views expressed in this post do not necessarily represent the views or policies of The Lean Enterprise Institute.
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2 Comments | Post a Comment
Tracey Richardson March 05, 2014
Great stuff Tom, thanks for sharing the summit with everyone who couldnt attend.   Great idea!!  Tracey

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Lory Moniz March 05, 2014
So many great stories being shared, nice recap Tom! Looking forward to tomorrows.

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