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A Lean Leap of Faith

by Michael Ballé
October 8, 2013

A Lean Leap of Faith

by Michael Ballé
October 8, 2013 | Comments (9)

I was recently giving my umpteenth talk on “What is Lean?” to a group of CEOs of small and medium companies, arguing as I often do that Lean is not a religion or an ideology, but the scientific mindset applied to business, when I realized there is a core assumption at the heart of Lean which requires something of a leap of faith by those who haven’t practiced it beforehand.

As I speak in Lean summits around the world and visit companies, many discussions of Lean are about the lean tools, and how much should one adapt them to fit the company. I always feel that’s kind of silly, since the point of Lean is to use the tools to transform the company, not change the tools so the company can stay the same. I also often get mired into debates around the lean philosophy of developing people through problem solving. Again, it’s hard to explain that “philosophy” doesn’t quite catch it; Lean is practice, not a philosophy. But the core assumption that is never debated in Toyota’s original teachings is the following: improve safety, quality, flexibility (lead-time), and productivity, and your business will thrive. 

Now, no one is ever going to dispute that improving safety, quality, lead-time, and productivity are good things for a business, but most CEOs I meet always see this as marginal to other more structural choices such as strategy, technology, investment, and so on. This, I’ve come to realize, is why 1) many CEOs delegate Lean to a staff program leader, who’ll hire and train internal coaches to do improvement projects and 2) why the CEOs who have actually succeeded with Lean all say “Lean IS the strategy.” 

The point here is that Lean rests on a cornerstone belief that:

  1. You must strive to improve safety, quality, flexibility, and productivity vigorously
  2. You do this by involving every employee all the time in problem solving

The assumption is that if you involve every one every day in improving these four things, the business will grow profitably, mostly because you’ll collectivity learn about how to solve more complex technical issues and invent smarter processes.

In order to pursue this goal, Toyota has invented a number of counterintuitive techniques such as stop-at-defect, flow if you can at takt time, and pull if you can’t. In addition, TPS says involve operators in improving their daily work environment through mastery of standards and small-step kaizen. Implementing these practices without the previous core assumption, however, are simply doomed to fail. Why? Because people neither understand nor trust the benefits that arise from revealing problems so that they can then be solved.

This core leap of faith, if you will, gets easier and easier as it’s backed up with experience and data. I’ve been involved in countless lean initiatives, and every single time, when an executive engages his or her employees in radically improving safety, quality, flexibility, and productivity, misconceptions are progressively revealed and abandoned as new doors open and the shape of what is possible and what is not changes.

Lean, at such a basic level, is no more than focusing hard on a few typical problems/typical solutions, which progressive mastery thereof changes the nature of the business. Think of this as Amazon learning to master the intuitiveness of the customer interface/web front-end, or the discipline required in its extended supply chain in order to achieve fast delivery. No philosophy involved here, just plain old fashioned know-how from years of practice.

But I can see that for people who’ve never experienced Lean firsthand, this idea that focusing all efforts on improving these SQDC and involving the entire staff in problem solving sounds counter-intuitive at best, far fetched at worse. Again, no one disputes these are good things in theory, marginally… so of course we’ll invest in a marginal training/workshop program to try to improve the business. But, not surprisingly, if you don’t attack improvements with energy and confidence, your efforts don’t deliver and, in the end, peter out.

With this in mind, I can better understand many lean debates. We’ve just concluded the European Lean IT summit here in Paris, and much of it was about Lean versus Agile, Scrum, Extreme Programming, and so on. Eric Ries’ great book The Lean Startup has really shaken things up, and started a new round of discussions on “What is Lean?”—in this case, what does Lean mean for IT or entrepreneurs? The arguments are hard to grasp, because the fundamental assumptions about Lean are not aligned.

This insight has also given me a new way to give a fresh, hard look at the lean efforts I’m personally involved with. Now I ask: how hard are we actually striving to improve safety, quality, flexibility, and productivity? And are we involving every one, every day? Not surprisingly, in many cases we find that lean initiatives tend to bureaucratize and go through the motions more than deliver results as we get lost in the intricacies of the full lean system. Asking these tough questions is key to keeping the lean spirit alive and kicking, or inspiring it in the first place.

The views expressed in this post do not necessarily represent the views or policies of The Lean Enterprise Institute.
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kevin kobett October 08, 2013
1 Person AGREES with this comment

"Scientific mindset applied to business."

Good description.



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Daniel Breston October 09, 2013

Apologies for the long answer as I am still new to Lean and learning.  Scientific mindset – I remember when I first heard this and it sounded like someone was trying to justify Lean by turning it into some credible science.

The 2nd thing that upset us service management folk was that Lean did not quickly show us where to save money. How many people can I cut after I go Lean was the question asked of me so ignore the respect people and get them trained practice just show me the money!

I like Sir Terry Leahy, ex-CEO of Tesco, who said in 2007/8 we made a decision to improve what we are doing, keep spending to help that improvement and it all starts with the people at the till.  Force the management team to go Gemba: which was his way of challenging his staff to go and be something they are not for a week and to visit things as often as possible.  Get the people at all levels involved.  This is what made Tesco a power as when they saw things, they fixed them even if it was something that management directed from their ivory tower.

Sherlock Homes said we see but do not observe.  We need to learn how to observe and then change accordingly.  Not a simple thing, but necessary.

At the Lean IT summit last week, much was made of middle managers being where focus really needed to occur but no consensus was reached on how.  As an ex-middle manager, I understand the fear of what will this do to me.  How will Lean impact me?   I think the Lean industry needs to better educate and help management, not by tools or cryptic challenges but with real, defined assistance.  Most middle managers never get to the customer and have no line of sight of top-down strategy.  Organisations that tree their strategy interactively are the ones that are a success as demonstrated by Harley Davidson, Canon, Tesco, etc.

Lean IT:  I think we need to stop saying Lean IT and start saying Lean with IT.  Lean changes the way a business runs: big, small, private and as we saw even non-profit.  Technology and how it is managed, used, distributed and serviced is a necessary part of every institution to be successful, competitive, compliant and help their staff or customers get the best out of the organisation.  Starting a Lean introduction in IT is a great way of building change into an organsation.

As I said at the conference, at heart I am an ITIL-COBIT professional but Lean lets me ask questions that make people thing and act differently.  My favourite quote is from Shigeo Shingo that underscores your message of the purposes of improvement: “Easier, better, faster and cheaper.  These four goals appear in the order of priority.”  These goals for service companies are simpler to understand than SQDC and we as Lean practitioners must help others change to meet this directive.

 



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Nicolas Stampf October 09, 2013

Great post as usual :-)

One side note, though: is this as big a leap of faith as you say, to work on SQDC? The gemba thing looks much more challenging to managers from my perspective.

It seems to me management think it knows how things work and they can direct from their office, when in fact nobody has a clue as what's going on, and we need to overcome this false knowledge, and go-and-see all the time.

 



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kevin kobett October 09, 2013
If you want your managers to bo to the gemba, you must hire attractive front-line employees.

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Michael Ballé October 09, 2013

Hi guys, thx for the comments,


Here's my challenge for the IT crowd: let's forget about management already. The one take away I have from the Lean IT Summit is that big data's rule is coming. 

For instance, planning (maybe even scheduling) functions are going to further centralize through sheer of crucnh power, which is already moving staff away from plants and into... the cloud? 

Nonetheless reality exists and reality resists, so local teams are left to deal with the usual issues, without the "traditon" management function to support them.

My question is: what can lean bring to these guys?


Cheers.



Reply »

Daniel Breston October 09, 2013

Interesting response!

Harvey Nash CIO Night London asked 123 CIOs is Big Data a concern and the answer was no.  Why?  Because Big Data has always existed. The question, like Service Design or Delivery is what do we do with what we have and can you the customer please tell us in simple words so we do not get carried away with our solution?

So i am hoping that Lean gets all of the guilty parties into one room to solve a problem or manage a requirement.  Thus my interest in oobeya and then managing the work flow that results from discussions.



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Mike Orzen October 20, 2013

As usual, Michael brings a clear view of the issues preventing organizations from making real lasting improvement with Lean.  I think he has nailed why leaders treat Lean with marginal interest and delegate it to someone else to deal with. 

I too walked away from the Lean IT Summit with a refreshed perspective of what Lean can do for the IT world, their companies and ultimately the customers they support....more questions than answers (as usual)!

 



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Mohamed Fazlulla December 07, 2014

Hi! Balle

It is very easy to get lost in a maze of Lean Tools and Jargon and achieve nothing unless you are extremely strong and smart in the fundamentals - the Lean fundamentals and an integrated view of business processes

Most things have developed from theory to R&D to action. But the Toyota Production System (Renamed "Lean" in the US) has its journey in the reverse. Lean Theory is emerging out of Toyota actions from the 1950s.

I think we are still bogged down in clarity to convey effectively and make people understand and go after "Lean" in their business processes without getting confused by the high sounding technical and management words, not quite comfortable to the people having a limited education and experience who are most often required to drive Lean on the floor

Can we make it very simple to understand and implement "Lean" for the people?

The need was never more urgent than it is now to describe and present "LEAN" in a Lean way by eliminating waste of Technical and Management Jargon

I sincerely believe Lean can be effectively applied to every sphere of human endeavor, however I am yet to figure out how it can be made to enter a bedroom



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Mohamed Fazlulla February 25, 2016

Hi, Michael

This is about the most important activity, that is value addition at the GEMBA in lean before the product is taken over by logistics to reach customers. I have tried to make it simple and commonsensical around the basic underlying principles of lean as I understand and have understood. Hope it is interesting 

 

None but only the CEO needs to know anything about Lean in a manufacturing industry where the inputs are materials that need to pass through processes to make an output of products demanded by customers.

This is what the CEO simply has to do.

The CEO must be extremely competent and an expert in Lean Basics.

It's like; you must know letters A to Z with absolute competence and confidence to be able to make words in the first place

The CEO must know

LEAN IS ABOUT MANAGING THE COST OF DOING BUSINESS TO  REDUCE IT ENDLESSLY. You don't have to spend sleepless amount of time and resources to know lean, except its basic underlying principles to actually get into an action mode on lean in just 1 minute.

The basic underlying lean principle in manufacturing is UN INTERRUPTED VALUE ADDITION AND ACCELERATING IT STEP BY STEP ENDLESSLY in production processes where the input is materials going through processes resulting in the product the customer wants and at the time it's required by the customer.

Any company which organizes its information, human and material resources to achieve the UNINTERRUPTED VALUE ADDITION state has a perfect score of 10 in Lean and it's fully benefited by it.

Having armed with this basic 1 minute knowledge of lean the CEO simply articulates it to his team, and challenges it to achieve the uninterrupted value addition state in manufacturing processes.

The rest should follow like magic without anybody raking their brains like many lean " expert's" spending their entire lifetime trying hard through LEAN TOOLS but still achieving nothing.

The CEO lean team comes to know automatically all the "WASTES" INTERRUPTING VALUE ADDITION without having to undergo confusing teaching and training by the so called “LEAN EXPERTS".

The team creates its own rules with the initial struggles to make sense of the Lean vision of their CEO to achieve uninterrupted value addition.

Now the CEO's Lean team has become intelligent enough to formulate its own rules for Lean after having struggled to figure out how to achieve a state of uninterrupted Value addition. They are now armed with their own articulated "Lean Doctrine"

This is the Lean Doctrine through a statement of damn just TWO simple rules

RULE No 1: Man can wait machine can wait but material shouldn’t wait

As the team practically applies the rule in the Gemba it easily knows WIP inventory in between work station interrupts value addition. Then by logic arrives at a sane conclusion that SINGLE PIECE FLOW processing doesn't interrupt value addition and that machines have to be grouped close together in the same way as process flows. That's cellular flow manufacturing.

Time spent on machine setup hinders value addition. So the team figures out how to not get rid of it totally but to drastically reduce it. In fact they are forced to figure out everything that interrupts value addition without having to know about it before like organized works place with 3s of the 5s the 7 wastes equipment maintenance interruptions (TPM), Equipment production effectiveness (OEE), lack of knowledge and training etc etc.

Here the team will also find under Rule No1, there is some waiting of men and machines but not material but still productivity is much higher than before, inspite of varying processing times ( Unbalanced).

There is also a quick realization that pushing for maximum machine and men utilization to keep them busy all the time is extremely counterproductive and harmful to the company. It ruins the financial health of the company, by forcing it to invest in inventories and WIP with high interest rate borrowed working capital and that it cannot be converted in to cash any time soon

There is also a quick realization that material flows like water in a continuous Value stream more like an ant line and Baton of a relay race than like a huge clutch of sheep (WIP) hindering smooth movement like before.

The new materials movement across the shop is also in the likeness of flight of an aircraft as it doesn't touch the ground until the products are taken over by logistics to be shipped to customer.

The team also realizes every product doesn't follow the rule in the ideal form. There are exception like an intermediate subcontracting operation, Heat treatment, plating, phosphating operation etc when Value addition is interrupted albeit temporarily which is inevitable.

RULE No 2 Neither man nor machine or material shall wait

As the team experiences higher productivity and gains experience under lean rule No 1, it also quickly learns how not to make men and machine wait by re engineering processes and set ups to make process times as nearly equal as possible. The key is forgetting fast operation to focus on the slowest operation (bottle neck) and reducing the operation time (De bottle-necking) if necessary by a parallel operation of the slowest process on multiple machines or manual Assembly work stations, at the same time.

The team also faces issues with shared resources in material flows when materials flowing from different product families run up to the shared resource and wait to interrupt value addition.

When this state with balanced cycle times is achieved we have the fastest and uninterrupted value addition, which I call it a state in which a "Maximum Manufacturing Velocity" has been achieved.

As this state of value addition stabilizes, the CEO challenges the team to achieve a much more superior state through step by step improvement (KAIZEN) to a state of "Manufacturing Acceleration" from "Manufacturing velocity" as long term Goal.

 

Mohamed Fazlulla.

Lean Consultant

Bangalore India



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