Kelly Singer: How do lean and green companies approach sustainability differently?
James Morgan: Lean and Green companies think about their impact on the environment from the start. Instead of just thinking about an end “green” goal - like a recyclable or biodegradable product, they think about how the entire value stream can become green. They realize that not thinking green from the start will result in unnecessary rework, additional expenses, delay going to market and worst of all – missing an opportunity to minimize their environmental impact by waiting until it’s too late in the process. But I think most importantly, lean and green companies are acutely aware of their impact on the environment – and know how much more effective they can be with better cross-functional planning.
KS: What is cross-functional planning and how does it relate to lean and green?
JM: An important lean principle that helps improve cross-functional planning in the development process is “compatibility before completion,” and it is a critical part of lean product and process development (LPPD). In fact, it is fundamental to creating lean and green value streams. This is the practice of building compatibility checks into your development process to ensure that designs are compatible with all system requirements right from the start. These requirements often include interdependent parts, manufacturing requirements, quality, serviceability, and of course, environmental impact. And these requirements must be met before moving forward in the process to production.
It’s about moving beyond just a focus on “how do we complete this project on time and on budget” to “how do we align our individual processes and systems to create the best product – in fact total value stream possible”. And it’s about collaboration not siloed work. It results in minimizing the rework of late changes, reducing workload, and shortening overall lead-time. This creates less waste and optimizes your value stream – and that means less impact on the environment. When you consider the impact that the waste of many current products and processes have on the environment … it’s kind of scary … and it should make us all eager to change because that waste is preventable.
KS: During your tenure as Ford’s Global Director of Body Exterior, Safety, and Stamping Engineering, you were a leader in Ford’s historic turnaround. One of the key accomplishments was the new, aluminum F-150 with eco-boost engine. How was Ford able to create the world’s most successful eco-truck?
JM: I was indeed privileged to be a part of the historic turnaround at Ford during which CEO Alan Mulally rallied the company around a simple goal: create new products that our customers want and will buy. During this time the company delivered both the products and the system that fueled a transformation that not only made Ford profitable again, but an innovation leader in the automotive industry. I was at Ford for more than 10 years and it had a big impact on my thinking and development as a leader – largely due to the outstanding leaders I worked for.
When you think of environmentally friendly vehicles, trucks probably aren’t the first thing that comes to mind. And we wanted to change that. Bill Ford’s commitment to the environment is well known. Trucks are an integral part of life in North America and a critical part of Ford’s product portfolio. So this was a very big idea – and even bigger challenge. In order to replace the huge eight cylinder behemoths that usually powered competitor’s conventional pickup trucks with the super efficient, award winning, six cylinder eco-boost engine and deliver the same or better performance for our customers, we had to take massive amount of weight out of the vehicle. This required innovation and collaboration on a massive scale – and a very big dose of Compatibility Before Completion … and we were successful. Not only does the new F150 have significantly improved mileage (the F150 EcoBoost still has the highest EPA-estimated fuel economy ratings of any gas-powered light-duty pickup), it is also best in class for many critical truck performance attributes - and consequently is the best-selling vehicle of any kind in North America.
What’s more, it is the only truck on the planet to achieve the highest possible safety rating. But there is another important part of the story. Our team thought about more than the product – we thought about the entire product value stream collaborating between design and manufacturing to make our material utilization some of the best in industry – and also worked with our aluminum suppliers from the very beginning of the development process to create an efficient recycling strategy so the aluminum can be melted down and re-used.
Our vision of success was bigger than just creating vehicles that people would buy. It was about progress and innovating a product in ways never before thought possible to create an ever better total value stream.
KS: You recently toured Toyota headquarters in Japan to learn more about how the company is adapting and improving their LPPD Systems. How are they applying LPPD to meet their big environmental goals?
JM: Jeff Liker, with whom I co-authored “The Toyota Product Development System,” and I spent about a week at Toyota HQ, their test facilities, engineering center and manufacturing plants. Toyota’s commitment to the environment is just incredible – and it shows up throughout the organization. Waste of any kind is abhorrent to them – it is part of their DNA so to speak. Whether it’s in smaller projects like reusing old Prius batteries for power storage in their facilities or massive, long term projects like the Mirai fuel cell vehicle and working with various governments to create a “hydrogen powered society,” Toyota is constantly thinking green from the start and taking a total value stream approach to protecting and improving the environment.
A more typical example I saw during our visit to Toyota was how they went about their effort to reduce vehicle weight to increase fuel efficiency. This is called light-weighting, and it’s a growing trend in the industry. The interesting thing at Toyota is not just that they’re making lighter vehicles but their standard process for doing it.
One of the typical ways to reduce weight is to utilize thinner, high strength steels. By doing this, companies are able to not only reduce the individual part’s weight, but often reduce the number of parts required. The problem with this strategy is that these materials often have to be formed in a superheated state that requires enormous gas fired ovens that work in very large batches and require loads of time to heat the material. This process also produces an oxide residue on the parts which must be shot blasted off after forming.
None of this was acceptable to Toyota – so design engineers, manufacturing engineers and Toyota suppliers collaborated in order to deliver both a lighter, more fuel-efficient vehicle and a much better value stream. The result was not only a better product, but a remarkable joule heating process that requires only two meters of space instead of more than 30, can heat material one blank at a time in five to 10 seconds instead of huge batches, delivers a two-thirds reduction in CO2, and does not produce any residue and needs no extra operations.
I think this is an excellent example of what LPPD is all about: cross-functional collaboration, learning, and innovating product and process development to deliver solutions that maximize value to the customer and the environment.
KS: What makes an effective lean and green leader?
JM: I believe that leaders get the culture they exhibit and tolerate. I saw this with Alan and other great leaders I had the good fortune of working with. And often their priorities become clear to the team not so much by what they say – but what they do. How they spend their time. I can tell you that one of an executive’s greatest challenges is to find time. You are under tremendous time pressure. The only way sustainability will work is if it’s an inseparable part of their company’s processes and products – and a leadership priority. I always try to remember that time will make the decision if I don’t. Sustainability is not something we can be passive about anymore. It is not a “sometime thing” – it has to be part of the way we do our work every day.
It’s like Compatibility Before Completion – it has to be embedded in the way work is done. Leaders must live their values and align their team and business practices. Effective lean and green leaders never lose sight of the big picture because anytime you create a product, you are literally creating the future. Certainly for your company, if not for millions other people. A leader has to ask themselves – what kind of a future do I want it to be?