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You Are Not Different: Make universal lean principles work locally

by Orest (Orry) Fiume
June 7, 2016

You Are Not Different: Make universal lean principles work locally

by Orest (Orry) Fiume
June 7, 2016 | Comments (15)

How many times have we heard someone say something like “I understand that lean works for you, but you have to understand we’re different”?

And they are right. They are different. If everyone were the same, someone would have already published “The Lean Cookbook.”  I have a recipe for pasta sauce that has been passed down through the generations in my family. I know that if I follow the recipe, I will always have a great pasta sauce. But because everyone is “different” there is no cookbook.

That said, the differences are not an excuse for not becoming lean. Contrary to what many “lean consultants” preach these days, lean is not an operational tactic. Lean is a strategy. It’s a customer-focused strategy that uses time as a weapon to provide “things” (delivery, quality, new products, etc.) faster and better than the competition. In implementing this strategy, you quickly realize that the principles are universal, but the application of them is local…because we are all different and need to adapt those principles to our current situation.

The key challenge is learning how to adapt the fundamental approaches of lean to your specific situation. To do this it’s helpful to identify and follow four basic principles that support this time-based element of lean strategy: flow, pull, takt time and standardized work.

Flow: If you look at our processes you will discover that up to 90 percent of the elapsed time (i.e. first step to last) is consumed by the output of that process either waiting to be worked on or moving from one place to another…to wait to be worked on. You want to physically change your processes so that work moves from one operation to the next in a continuous flow, ideally without interruption. A financial services company reduced the amount of time for approving new agents by 46 percent by reducing the amount of moving and waiting in a paperbound process. It was able to attribute $3.1 million of new revenue in the first years to this improvement. In his book Follow the Learner: The Lean Dentist, Dr. Sami Bahri, DDS talks about “one-patient flow” and says, “Real improvement at the Bahri Dental Group only happened when we began directing our efforts towards this goal.”

Pull: Producing to a forecast is “push” production. Producing to an actual customer demand is “pull” production. One of the tools to facilitate “pull” is a kanban card system. In his book The Lean Turnaround, Art Byrne discusses how St. Frances Hospital, in Hartford, Connecticut, implemented a kanban pull system for its in-house laundry, and improved the on-time delivery of linens to the patient floors while eliminating the need for $600,000 of excess linen inventory.

Takt Time: This is the rate at which customers demand our products or services. It is the rate at which we have to complete one unit. If there are 450 minutes in a workday and customers are buying, on average, 450 units per day, we have to complete one unit every minute. Lean author Michael Balle discusses the use of takt time in his own work: “The full sense of the takt time concept appears when one is trying to deliver a number of different products over the same production resources. For instance, as a writer, I write books, articles, this column, blog posts, and tweets. Since I’m the one doing the writing, I need to have some idea of when to do what. Takt time helps me to see myself through the work: a book every two to three years, an article every three months, a column every week, a blog post every couple of days and so on.” Certainly this use of takt time is not as rigid as needing to complete one unit every minute, as cited above, but is a good example of adapting the universal principle to local conditions.

Standardized Work: If you do something differently each time you do it, how do you identify what is truly value-adding work and what is not? It’s only by following standardized work every time that you create the environment for continuous improvement. I can’t think of anything that is done that is not done in the context of some process. And that applies to our business life (manufacturing or service) or personal life. It’s only by creating standardization within those processes that you can begin to identify waste (activities that don’t add value) and change the process for the better.

I have seen dramatic improvement in productivity and lead time when these principles have been applied in different environments: repetitive manufacturing, job shop manufacturing, insurance company underwriting group, hospitals, accounts payable, bank mortgage groups, a supermarket, a dentist office, farming, airplane assembly, warehousing, restaurants, construction, financial services and a food bank (see video here: https://www.youtube.com/watch?v=EedMmMedj3M).

Are all of these enterprises different? Yes. However, they have been able to see through those differences in order to think about how the universal principles can be applied to what they do and then put that unique thinking into practice by conducting experiments to learn what works for them. Two notable examples are in healthcare…which would appear to be as far from manufacturing as possible. When Virginia Mason Health Systems was seeking to learn about lean, its CEO, Dr. Gary Kaplan, brought his entire management team from Seattle to Wiremold in Connecticut to see what we were doing. Likewise, Dr. John Toussaint, CEO of Thedacare in Wisconsin, visited the Ariens Company, a manufacturer of lawn mowers and snow blowers, to see what they were doing. They did not come to Wiremold and Ariens to learn how to build an electrical product, a lawnmower or a snowblower. They were there to understand the basic principles at work and discuss how those principles applied to healthcare.

If you are trying to figure out how to get started, think of it this way:

  1. Pick a process and standardize it. Until you do that you don’t really know what’s happening.
  2. Understand the demand placed on the process, the takt time. You need to know that so that when you change the process you can change it in a way that can satisfy the demand.
  3. Create flow within the process by identifying moving and waiting times. Then commit to making the physical changes needed to eliminate them.
  4. Establish a link between the process and the customer so that the people in the process can see what the customer wants and when it is wanted. A basic kanban system can satisfy this need. (Note: basic does not equate to “simple”)

So, if you are still using the “yes, but we are different” excuse to avoid the hard work of becoming lean…stop it. You’re wasting time.

P.S. If you have examples of these basic four lean principles implemented in “different” environments, please keep this discussion going by describing them in the comments section of this posting.

The views expressed in this post do not necessarily represent the views or policies of The Lean Enterprise Institute.
Keywords:  fundamentals
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15 Comments | Post a Comment
ricardas matulionis June 07, 2016
1 Person AGREES with this comment

Everything right. Problem - people in companies working by Lean principles, know it. Peoples in other companies very need to know this, but they don't read such articles and don't understand what about if they read...

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Orry Fiume June 07, 2016
1 Person AGREES with this reply

Ricardas, I agree with you that articles like this can be a bit like "preaching to the choir".  But that just makes it more important that everyone of us Lean advocates continue to forward these articles to everyone we know in other companies that don't "get it" yet...combined with an invitation to discuss the article with them to help them understand what they are reading.  

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Mark Graban June 07, 2016
2 People AGREE with this comment

There is no cookbook... a similar sentiment was shared in the 3rd edition of my book Lean Hospitals:

"Richard Zarbo, MD, DMD, senior vice president and chair of pathology and laboratory medicine at Henry Ford Health System (Michigan), has led the Lean transformation efforts at their lab since 2005. Zarbo stated, “There is no cookbook approach to Lean,” as organizations and leaders must create a program that is their own. Zarbo emphasized Lean must be introduced a way that is not driven through traditional “top-down leadership,” as he admits to having tried and failed with that approach, initially. “The tools you can read about, the results you can read about, but how Lean is applied is different [in each environment] because Lean is a living thing—it’s the people,” he said. [i]"

[i] Lusky, Karen, "Laying Lean on the line, one change at a time," http://www.captodayonline.com/Archives/0709/0709h_laying_lean.html (accessed October 21, 2015).

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Orry Fiume June 07, 2016

Mark, as you know, that is probably the most frequently asked question by people looking for the "silver bullet" of Lean.  In almost every workshop that I give on Lean Accounting, someone will ask for the "cookbook".  It's sad see their disappointment.

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Dan Cashman June 07, 2016
3 People AGREE with this comment

"We don't make cars."

Working in healthcare I hear this all the time. Once they see a few examples of breakthough results coming from a change in process that tune starts to change.

As you stated, the basic elements of value, flow, pull, and standardized work can apply to any process.

So to those that think 'we're different' of course we don't make cars. The mission in healthcare is much more important, and that is exactly WHY we need Lean. Why would our cars deserve a better process than our grandmothers?

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Orry Fiume June 07, 2016

Dan, I really like your closing question...wish I had thought of it myself.  But with your permission, will use it in the future.  

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Ken Hunt June 07, 2016

I heard the same thing Dan when we started our Lean journey in earnest 20 years ago. "It'll never work, we're not building cars, we're building airplanes".

The results have been impressive, but after all of this time, we still have a ways to go.

Ken

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Dominic Savant July 06, 2016

Dan, I too really like your closing question. With your permission I will use it in our Lean Training.

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Tom Goetter June 07, 2016

Orry,

Thanks for the insightful article.  Totally agree that the Lean concepts can be and should be applied uniquely to each organization!!  When folks claim htat they are different, it is usually because they do not have a solid grasp on the concepts.

When discussing Lean, I refer to it as a management system.  I believe it is an even higher order of magnitude than strategy because one can use a Lean approach called Hoshin Kanri to both develop and, importantly, deploy an organization's strategy.  As we did at Wiremold.

Maybe, it's just "word smithing".

Again, thanks for sharing the article.

Tom

Reply »

Orry Fiume June 08, 2016

Tom, thanks for the positive comment.

Regarding strategy vs management system, for years business books have been filled with different ways to describe what and how organizations get things done.   In my mind the hierarchy is:

 -Vision Statement: What you want your future to look like

-Strategy: How am I going to get to that future and be better than the competition

-Systems: What systems do I need, e.g . management, production, sales, etc

-Processes: What are the work flows within the various systems

-Activities: What are the specific steps within the individual processes

Based on that hierarchy, Hoshin Kanri (a.k.a. Strategy Deployment) is the management system of identifying what has to be done during the next one to three years to implement the strategy, and ensuring that the proper resources are assigned to each Hoshin.

In any event, whether Lean is called a strategy or a management system is not as important as getting the company motivated to becoming Lean.

 

 

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Reza Limoochi June 08, 2016

In fact your tells guide us from shelf of an oyster reach to pearls.Many thanks of you...

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Orry Fiume June 08, 2016

Thank you Reza, that is the nicest compliment that I have ever received.

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Shermaine - June 08, 2016

Agreed to share some examples in "different environments". 

I am very interest to know about transactional world how to implement one pieces flow.

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Owen Berkeley-Hill June 14, 2016
1 Person AGREES with this comment

Although I cannot argue with your very sound advice, I do have to question to whom that advice is targeted?  Is it the leadership or some enthusiastic person three or more layers down the chain, perhaps a wingman or woman who will never reach command level?  How many Fortune 500 CEOs trawl through these posts every day? Does their education allow them to understand what these posts are recommending?

The problem with Lean is that unwittingly the original literature resulted in a much stunted and diminished subject called Lean Manufacturing which was then further distorted by the many so-called Lean experts so that Lean now does not have a definition around which we have any consensus.

The question, which is considered bad manners in Lean circles, is whether Lean is a body of knowledge best left to so-called experts or is it the biggest advance in our understanding of how a good leader should think, believe act and behave?  If it is the latter, then why is it that none of the business schools around the world base their cash cow degree, the MBA, on Lean principles over a quarter of a century after the publication of “The Machine”?

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Declan Scullion July 06, 2016

Orry

Thanks for the article. I am a strong advocate of lean in the engineering department (specifically product design). It is a challenge as a lot of engineers see their work as a creative process that can't be so easily defined, standardised and controlled. In fact lean in engineering actually promotes innovation by clearing the way for it. Also in most engineering companies, all other departments feed from engineering so the benefits of lean ripple down the line.

I really like your article and I hope you don't mind, I have referenced it and expanded on your four basic principles for my engineering colleagues in the link below

https://www.linkedin.com/pulse/lean-engineering-work-smarter-declan-scullion?trk=pulse_spock-articles

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