An executive in charge of Operations for a division of Fortune 500 company evaluated several alternative strategies for reducing operating cost. Ultimately he settled on a plan to transition from MRP style "push" material management to Lean "pull" ( kanban) material management as part of a larger transition to Lean. He believed the move to Lean would slash inventory levels, improve customer service, and eliminate costly problems like part outages, last minute production schedule changes, and expediting. All totaled, he expected to deliver $100's of thousands of dollars, or even millions of dollars of improvement to his organization.
He launched the initiative and had his team put a plan together. Unfortunately, the effort met strong resistance right from the start. His concerns led him to search for outside assistance and soon after an agreement to apply Systemental's Organic Lean™ implementation services.
An Organic Lean™ Assessment Reveals a Healthy Lean Idea Damaged by Typical Difficult Implementation Issues
An assessment concludes:
"Resistance was not about the Lean idea of "pull"; it was stemming from issues regarding how the new kanban system would be designed and put into use."
These issues included:
- difficulty getting the "facts on the table" due to friction and distrust between the several manufacturing locations and the headquarters-based production control department
- skepticism regarding the intent to push the initiative through due to lack of visible support from key executives
- a strong belief lower inventories would negatively impact order fulfillment rates resulting in customer dissatisfaction and a loss of sales revenue
- concerns regarding the organization's ability to successfully make the transition since previous similar projects had either failed or had been plagued with stressful problems
- a lack of confidence in new leadership due to recent key management position turn-over
- push-back from middle managers concerned with relinquishing power and authority – "if kanban pushes responsibilities downward, will the job still get done?.. will we retain our job security?"
Organic Lean™ Applies Effective Countermeasures to Resolve Concerns Regarding Trust and Technical Capability
Influential team members wanted to understand how the new Organic Lean™ approach would address the issues described above. They naturally saw the resolution of these problems as critical to success.
Furthermore, they were not inclined to believe any solution relying on tools or methods brought-in from the outside would be precise enough to fulfill their special needs - they wanted proof the "kanban" could be made to work in their industry and in their business through the application of tools and methods tailored to their specific requirements.
Uncovering these local concerns and conditions is of critical importance to the Organic Lean™ approach since the method calls for adjusting the implementation to prove Lean methods can thrive under local conditions - the business and cultural environment at hand.
A cross-functional team was formed and a revised approach mapped out. This time, with the full support of executive management, all of the local concerns and conditions were taken seriously and countermeasures were put in place to resolve each and every one.
Initially, the team was concerned about their ability to get all of the requirements right. These worries soon faded when the Organic Lean™ Implementation Specialists (the Systemental team members) explained how they would both guide and support the effort with all the resources needed to make the project successful. For example, the manufacturing and production control groups were able to see this project as a "fresh start" with respect to "lack of trust" issues when the Organic Lean™ team Leader partnered with the Operations Executive and the Executive Champion to convince the team the new "kanban" approach would not be implemented without genuine agreement between all of the parties. (Considering a past history of functional executives working to the contrary, the stance of "absolutely no implementation without agreement" taken by the Operations Executive and the Executive Champion was a courageous move.)
Re-envisioning and Re-crafting Implementation as Cross-Functional "Solution Development"
As the Organic implementation effort advanced forward, the team learned to re-envision and re-craft the initiative as a cross-functional "development" effort, meaning they would have the opportunity to work through all of the stages normally present in the development of a new product, only in this case, the product would be a working kanban system; one delivering benefits to all parties and capable of meeting the company's goals.
With all initial concerns addressed, and the realization they would get to design the entire system themselves so it met all of the criteria important to the different stakeholder groups, the team's excitement and enthusiasm for the effort began to quickly build. Engagement and input were high from that point forward.
Local Resources Effectively Utilized for Maximum Benefit
Throughout the project, the Organic Lean™ specialists avoided "over-steering" the effort by defaulting to local resources wherever possible. For example, when a newly hired manager showed fantastic training and deployment planning capability, these aspects of the project were quickly turned over to the new hire allowing him to quickly build credibility with the other team members. (Building the capability to work together as a team to design and implement change is a desired outcome of every Organic Lean™ project.) The participants clearly enjoyed the experience of creating the essential pieces of the new system "in-house".
Technical Summary
Once underway the effort progressed through several stages of implementation:
- value stream mapping – current and future state
- team problem solving
- modeling and Six Sigma analysis
- pilot tool design and multi-site pilot trials
- cycles of actual use & feedback followed by design and tool refinement
- agile software development to create and integrate enterprise capable software tools with the client's ERP system (development by a SysteMental Organic Lean™ technology specialist in cooperation with the client's IT department)
- policy and procedure development
- the evolution of new management routines
- the production of "process visibility" and "sense and respond capability" tools
- the application of project management principles to execute a well-communicated and highly coordinated roll-out to locations across the U.S., Mexico, and China
In the end, the new "kanban" system, which had been refined using cross-functional input from all groups, worked better than expected. The new standardized work for front-line operations was straight-forward and produced great results. The participants, the surrounding employees and the executive management all recognized a higher level of respect and mutual trust present in the working relationship between manufacturing and production control. And since all parties thoroughly understood how the new system worked, having essentially designed and built it themselves, they believed in the system and operated it to a high degree of excellence.
Organic Lean™ Uncovers Hidden Talent to Get the Job Done
It would be remiss to finish this article without explaining the absolutely vital roles key members of the client organization played in making such a successful result happen. So many individuals stepped up to the plate and performed beyond the call of duty it would be too lengthy a proposition to attempt to mention all of the names, positions, responsibilities and contributions. Instead, what I think is more important, and I am sure the participants would agree, is how the Organic Lean™ approach reveals a simple fact - when it comes to cross-functional improvement efforts, larger organizations are chock full of latent talent just waiting to be brought to the surface. Extraordinary "would-be" improvement contributors and leaders are present – all they need is a chance to see how their contributions will be managed and put to use in a valuable way. Once Organic Lean™ demonstrates the desired natural, healthy conditions are in place - fair treatment and consideration, peer review, and assurance all relevant input will be factored into the solution design, to name just a few – "hidden leaders and contributors" always emerge and step forward to "get the project right".
Organic Lean™ Delivers a Happy and Fruitful Result – Millions in Annual Savings
At the conclusion of the project, when total savings were tallied, they added up to millions of dollars in direct savings. The project was considered a "best ever" success and project experience. The Operation Executive declared the effort to have been executed at a quality level previously unseen by his organization.
The Organic Lean™ approach not only produces great project results, but also produces increased confidence and a greater awareness of high capability to execute complex change. The Organic Lean™ approach is more faithful to the ideas and management principles driving the Toyota Production System (TPS). As a consequence, the approach not only organically grows healthier solutions - in this case a healthy kanban system - but it also establishes fertile soil for the growth of a healthier Lean culture; one based on an important founding principle of TPS - "respect for people".
In summary, Organic Lean™ creates healthier solutions, develops a healthier environment, and plants seeds for establishment of a healthier Lean culture.
