Are lean principles universal?
Dear Gemba Coach,
Can we really consider Lean principles as Universal? I am currently working on a case study about the tea industry. What we have is a very seasonal, perishable product supposed to be available in various format (tea bags, caddies, pouches). The suppliers being all in Asia the lead times are what they are and I do not even talk about EU regulations imposing all kind of constraints. It is indeed easy to implement a "lean island" with no connections with the upstream partners. The result is huge level of inventory to cope with the unpredictable shortage, price increase, port disruption and new regulations.
One of my students works in a teabag factory and he kept asking the same question throughout the course. In the end, I never got around to visiting his Gemba, so I don’t know for sure, but thank you for your question, it’s made me think hard about it again: how universal are lean principles? Or, put it differently, which part of lean is universal, and which is specific to Toyota or to the automotive industry. I’m certain that every author will have a different take on this, but I’ll give it my best shot.
“There is a secret to the shopfloor,” claimed Taichi Ohno, one of the founders of lean, “just as there is a secret to a magic trick. Let me tell you what it is. To get rid of muda you have to cultivate the ability to see muda. And you have to think about how to get rid of the muda you’ve seen. You must repeat this – always, everywhere, tirelessly and relentlessly.” If there is anything universal about lean, I believe this is it: going to the Gemba and scratching your head to see the challenges and working with the people to figure out how to solve problems locally and improve step by step. Whether you’re in the tea industry, healthcare, or banking – surely this applies. It’s a practice, a perspective, an “angle of view” as one could call it. An attitude. It’s dependent of you, not of the situation.
But clearly, there is more to lean than just looking around for muda and thinking how to get rid of it. What about all the other stuff? For starters, there is muri – overburden – and mura – stop-and-go, the two main drivers of muda – waste. Again, looking in your mind’s eye for muri, mura, muda is universal: anyone can do it anywhere. In many cases, you feel there’s not much you can immediately do about it, but it will certainly start you thinking about new ways to see problems.
What about flow, pull, cells and all that stuff then? Before we address this, I’d go a step further in learning to see the shop floor. Again, these are universals inasmuch as these questions can be asked in any situation, even though the answers might not be immediate or obvious. The four key questions I’ve learned to ask, time and time again, are the following:
- Are we protecting our customers? Do we have the firm intention to reduce the number of complaints and to deliver on time. In business, this is a universal question, although in some cases such as education or medicine and any other collaborative work (the teacher and the student need to collaborate in order to succeed at education), complaints can be difficult to analyze. Still, zero complaints and zero late deliveries can’t hurt whatever the situation, and figuring out how hard we’re trying to protect the customer is a good starting point in any case. When I visit a Gemba in an industry I’ve never seen before, this is my starting point.
- Do we control our lead-time? Again, I believe this question is universal: all operations are dependent on some process or other, and all processes have a lead time from customer request to delivery, and from work order to the finished activity. Controlling the lead-time simply means the process is understood. A variation in the lead-time means there are unforeseen, uncontrolled events in the sequence of work. For instance, writing a book (so many pages, etc.) should be a controlled process but experience shows that publishing one has a highly variable lead-time, because so many outside events impact authors, editors and publishers. In essence, trying to better control the lead-time is the key to better understanding the process.
- Can we reduce the lead-time? Reducing lead-time gets you square into lean proper. In trying to explain what Toyota was doing, Ohno responds in the Foreword to his book on The Toyota Production System: “all we are doing is looking at the time line from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that time line by removing the nonvalue-added wastes.” I’ve learned the hard way that trying to reduce the lead-time before controlling it leads to very unhappy outcomes, because better understand the process before fiddling with it. Yet, certainly, reducing the lead-time is clearly when the improvement work because bona fide lean. And I believe that reducing the lead-time – albeit not easy – is universal.
- Can we reduce costs by eliminating waste? Experience shows that as you find ways to reduce your lead-time, your costs go down, simply because you focus on the nonvalue-added activities and how to remove them from daily work. My experience is, in various industries that if you reduce your quality complaints by half and cut your customer lead-time by 20%, you increase sales by about 20% to 30% (if you can follow up on that kind of growth) on the same overhead, so your global productivity (sales/person) increases and your costs go down.
Now, I’ve worked in healthcare, in automotive, in banking, in pharmaceutical and aeronautics industry and so far these questions have always applied: they’re not linked to a type of activity, but to a way of asking questions and challenging oneself. If there is one overall universal principle of lean is that of hansei: self-reflexion and self-study. This has nothing to do with business and all to do with human nature. Redefining one’s job as work + KAIZEN will always pay.
Those are the questions, but what about lean answers? What about just-in-time, jidoka or standardized work and KAIZEN? This is a trickier area because every industry has very specific processes and clearly automotive techniques will not apply across the board. Still, I’ve found that looking for some generic improvements always deliver. In particular, when in doubt:
- Improve your level of just-in-time: every company works at its own level of JIT. For instance, one industrial equipment company I know is at the four month level of just-in-time. When they get an order, they tell their customers they’ll deliver in four months, and they mostly do. The reason is they’ve decided to subcontract all assembly, so they wait for an order to come in, do the engineering work and then farm out assembly. Upon reflecting on the JIT principle, they’ve slightly changed this policy by ordering from their supplier a new base machine every time they’d sold one – taking the chance the customer will purchase a run-of-the mill model which they can customize later on. In effect they are stock-replenishing their equipment, which has shaved one to two months off their customer lead-time. In the year they did this, their sales grew by one third as did profitability simply because they slotted in more machines during the same year. They moved from a just-in-time of four months to a just-in-time of two. As you can imagine, the area for opportunity is endless.
- Improve your degree of stop-at-defect: the tendency is always to put problems aside in order to get on with work and catch back later. Stop at defect is relative since if you apply it too rigorously, then nothing ever gets done. One the other side, it’s always possible to notch up stop at the defect. The same machine company decided, at the same time as they improved their just-in-time that they would try a rudimentary form of stop-at-defect. On an A4 sheet of paper, they list a “NO GO” set of criteria that mean that the machine won’t be sent to the customer if these items are not checked. In the past, the machine was sent at the requisite date and then all problems were sorted out during the installation – which made some customers really frustrated and angry. So now, not only the company is under the pressure of faster turnaround, but also the CEO personally stops some machines if he feels the NO GO is not cleared. This is far from comfortable, but it has highlighted some deep technical problems and changed the engineer’s attitude to listening to their customers. As a result one of the additional machines they sold was purchased by their harshest customer, who suddenly found engineers willing to listen to his complaints and ready to work on them.
- Involve operators in improving their own workstations: in any work environment, the first place to start is with avoiding accidents and improving working conditions. As the only people who really know what goes on are the operators themselves, getting frontline workers to improve the ergonomics of their own workstations seems to apply in any industry, whether with nurses in healthcare, assemblers in electronics or software ergonomics in IT, exploring detailed work is always reach in learning. The tendency of many companies is to apply corporate standards. The machine company took the problem the other way around and started writing standards from scratch as the result of problem solving efforts. The project managers are asked to have their own standards folder in which they inscribe their conclusions from their own KAIZEN efforts. The upshot of this approach is that visualization in the workplace and standards are build from bottom up and respected because they are well understood.
I can’t say whether it makes sense to implement a “lean island” in the tea business – if it looks silly to you, it probably is. What I’ve found from exploring many lean attempts in many situations is that the typical problems of lean are generally relevant (universal?) just as the typical lean solutions are generally useful (universal?) However, I’ve also learned to be extremely cautious with copy and paste. People come up with leaner processes when they’ve come up with a deeper understanding of the specific technical problems in their own work.
How far can lean concepts be applied outside of the automotive industry? Hard to say. For instance, the CEO of the construction company I mentioned in a previous column recently showed me an application of yamazumi in housing. In order to accelerate the flow of work through the building, two separate trades decided to share some of the burden in order to balance the overall workload. Knowing the industry I was simply amazed – I never thought it’d be possible. The company’s management immediately wanted to generalize the practice, but I held them back. I pointed out that these two specific contractors knew each other well and were technically skilled enough to do this, but if they asked their other contractors to do the same, they’d probably enter a sandpit and endless trouble, as well as a poor result. The fundamental problem, I argued, was to develop other pairs of contractors with the same understanding of the overall flow of work to be able to come up with these kind of solutions by themselves: making people before making buildings.
Which is what I was told all these years ago by the very first Toyota engineers I watched performing KAIZEN. There is only one golden rule: we make people before we make parts. This requires a spirit of challenge, open mind and teamwork, as Pascal Dennis phrased it in his great lean novel Andy and Me. Every industry is different, but all human beings share the same capabilities and potentials – that is universal. As one sensei once told me, the biggest room is the room for improvement.
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Dear Gemba Coach,
My new boss is a lean fanatic crazy about standards. He’s created a new team to audit standards and is telling us that applying standardized work is the foundation of lean. It’s creating a lot of resistance, and I don’t know what to make of it.
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Dear Gemba Coach,
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Isn’t there a better way to manage inventory than just-in-time?
Dear Gemba Coach,
This is 2019. Isn’t there a better way to manage inventory than just-in-time by now?