Background
Being in business for many years is, and can be, both a blessing and a curse. On one hand, the company has established itself and is well rooted in its chosen industry. On the other hand, it has established and well rooted “behaviors” built on a culture that have stood the test of time. This could be for better or worse.
Today’s economic conditions are forcing many company executives to make extremely difficult decisions, including severe cutbacks (layoffs), bankruptcy, insolvency, sale, and even closure. If your business is still viable at this point in time, congratulations may be in order, or, the impact of the current economy is simply lagging.
The automotive executives, particularly those seeking government assistance, are quickly learning that something must change and quickly. In fact, the federal governments of both the Canada and the United States have mandated “change” as a prerequisite to receiving funding.
Entitlements and Accountability
We are not looking to assign blame or assert accountabilities for the current economic crisis. We would strongly suggest however, that there is probably no better time to achieve a company wide “buy-in” to the concepts of lean manufacturing.
Sometime before and even during the “fall”, many seemed to be reluctant to recognize that changes were imminent. No one person can be held accountable for the current economic climate.
Unfortunately, rationalizing poor performance was simply attributed to the natural course of events and are consistent with historical economic cycles. Several problems with this rationalization persist. If the best predictor of future performance is past performance, then why didn’t “we” take the necessary steps to prepare for such a recurrence of events. If this was predictable, then why did this seem to take everyone by surprise? Who should be held accountable?
“Labour” was very reluctant to make any concessions until the government mandated a review and indepth analysis of competitor labour agreements. The announcement of plant closures and significant “down” days has seemingly created a new perspective.
Engage for Success
To some, everything was fine … until you came along and suggested that “we need to change” in order to survive. Could it be that the path of least resistance is also the path to peril? Improvements are always easier to implement than “change”.
As Lean practitioners, we need to be cognizant of the individuals who may be impacted by the improvements that must be made. We should also stress that the goal of Lean is not to displace people from your organization. The ultimate goal of lean is to increase your value added activity that in turn will improve your competitive position and stimulate future growth. Your competitors should be concerned about displacing employees.
A well designed situational assessment and the manner in which it is conducted may open the doors to improved performance as opposed to a wall of resistance to change. The key to overcoming this resistance and preventing backlash is through effective communication and participation of all employees from the top down or bottom up.
Another important point to make is this. Everyone likes to be involved in a successful venture. This extends beyond your employees and the walls of your business. Customers like to be associated with success too.
The Olympics present a good example of this. Think of the extreme efforts companies take to be associated with Gold Medal athletes as part of their branding strategy. Everyone wants to be associated with a winner. Taking this one step further, consider the extreme efforts and personal sacrifices that the athletes themselves have taken to achieve this level of success.
Where does your company fit into the economy – leaders or losers? Is everyone on board? Today’s climate has likely created the opportunity to bring everyone on board without even having to ask. The real breaking point occurs when company and self preservation become synonymous.
LEAN Strategy and Metrics
Once a sense of purpose has been established, your lean strategy can be developed and executed with the full support of your team. As part of your implementation strategy, training should be at its core. People will be more prepared to embrace the “new” way of doing business when they understand why they are doing what they do.
Naturally, people will want to know that the new way of doing business is making a difference and that they are contributing to this success. Your training program should provide a clear definition of the metrics being used and how they correlate to the “success” of the company. Posting charts on the wall is not going to sustain a lean culture for long unless the people understand what the charts mean. Reading a foreign newspaper is of no use unless you understand the language.
Lean Strategy
Almost every article, book, or blog will tell you that the focus of Lean is the “ELIMINATION of WASTE”. We recommend taking slightly different approach. Our reasons for this come from our own successes at implementing lean. Too many people don’t know what waste is or even looks like. Yes, you can train people on the “7 or 8” categories of waste, and yet they still don’t recognize waste outside of the context that was used to explain it.
Our approach focuses on True Customer Value. Does the activity add value from the customer’s perspective. If NOT, it is waste. This approach makes it much easier to discern waste in your company.
Again an example may serve us best. When buying a pizza for home delivery, what do you, as a customer, perceive as value? We would argue that since we are paying for the pizza, the quality of the pizza is where the value should be focused (taste, temperature, and so on).
Do we care what kind of car the delivery person was driving? Do we care where the pizza box was purchased or how many were in inventory? Do we care how many hours of overtime were worked or how many products had to be expedited in to meet customer orders? Do we care that the “company” covers speeding tickets per driver? Do you care if they cut their own wood to heat the stove or if they use gas or electricity? Do we care how many speeding tickets the driver incurred? The answer to all, if not most, of the above questions is likely a resounding NO. I’m willing to pay a reasonable price for a great tasting pizza.
To put it plainly, if the customer doesn’t see value in it, then why should you? Simple enough right? From this perspective, waste is readily recognized and identified as any policy, practice, or activity that does not add or create value for our customer.
One definition of Lean that many could easily embrace as there own is “A systematic approach for delivering the highest quality, lowest cost products with the shortest lead-times through the relentless elimination of waste.” Could the same objectives be achieved through the relentless pursuit of value?
The most difficult challenge will be convincing someone that what they are doing is “waste”. Most people would be insulted or offended by any statement that suggests they have been wasting their time all these years. We would recommend acknowledging the current level of success and thanking them for their efforts accordingly. You could almost be in a position to apologize for the current way in which a task is being completed. Keep in mind that, in many cases, we are only looking to change the method or the HOW. In other words, the WHY remains the same. What was being done was not a waste, it’s simply a matter of achieving the same end more efficiently and using our time more effectively.
Lean is a very effective means of sustaining a viable business enterprise even during these difficult times. It is difficult for some to see how the current economic crisis can be opportunity knocking. Those who are succeeding today have already responded during their times of crisis and envisioned what we now call Lean.
Until Next Time – Stay LEAN.