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Effectively Leading Your Lean Manufacturing
Transformation: Part 2
By
Bill Hanover,
Senior Associate Consultant, PROACTION
Lean Management - Series Summary
“Effectively Leading Your Lean Manufacturing
Transformation” is an article in three parts
authored by Bill Hanover, a PROACTION Associate with
many years of hands-on experience implementing lean
manufacturing methods. For the next three PROACTION
Best Practice Newsletters will be featuring this
excellent, insight-filled article.
Lean management is itself a Best Practice. All 4
Essential Factors of the Best Practice path are
closely linked to effective Lean initiatives. It is
an integral part of continuous improvement programs,
requires on-going education and training, depends on
effective systems and processes, and especially
requires effective leadership and culture, the focus
of this article.
Much of Bill’s message in these articles is focused
on leadership, motivation factors, and in creating a
lean-enabling culture at the company. As Bill says,
“Creating a Lean Organization that is strong and
capable will be one of your greatest achievements.”
The three parts are:
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Part 1 - Self-Correction - recovering from
past failings; leadership characteristics of
those who have succeeded in leading a Lean
transformation at their companies.
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Part 2 - Preparation - This article
discusses preparations before beginning your
Lean process.
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Part 3 - Execution - Provides further
practical recommendations and time-saving tips
to ensure a smooth and efficient transition to
Lean and World Class Excellence.
Part 2 - Topics include:
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If
Now NOW - When?
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Communicate Your Vision
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Delegate & Empower
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Prepare Support
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Absolutely Never Punish for Lean Success
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How to Handle Extra People from Lean Success
If Not NOW, When?
There is never a "good time" to begin your Lean Journey.
Often we hear managers tell us "well, as soon as we
do this, that, or the other we will begin Lean".
This is defeatist thinking. Now is as good a time as
any other to begin saving money and being more
efficient through Lean. No doubt you have dozens of
projects, deadlines, and demands on your time but it
is a bit like taking the time to put gas and oil in
your car. You need both all of the time. Without gas
you stop going forward and without oil you'll ruin
your engine. Lean improvements give you what you
need now and in the future to keep your business
running at least side by side with your competitors,
if not ahead of them. Without Lean you will
eventually fall so far behind that there may be no
way to re-enter the race. This is a fact of global
competition. The entire world is going Lean. You
must do it very soon. You must do it better than
your competitors. And then you must go beyond Lean.
(Going beyond Lean is a subject for another day.)
What that means in real terms is that you must
commit to the following practices and traits
discussed below before, during and after you begin
your Lean journey. Committing to these practices
before you officially begin your Lean transformation
will set a distinct standard and build confidence in
your leadership throughout the process.
Communicate Your Vision
As a Leader of Lean – you must publish it, talk about it,
get your staff talking about it, create posters
about it, roll your sleeves up and become part of
it. Simply put, do whatever you need to do so there
can be NO misunderstanding regarding your commitment
to implementing Lean and expecting your team's
success.
It has been said "In Boldness is Greatness". This is
no time to be timid. Due to your position and
legitimate authority people will generally get
behind you and follow if you will show them where
you are going. Failing to communicate your vision
can easily bring about your downfall as a leader
resulting in a lackluster or even a failed Lean
implementation. The importance of communicating your
vision often and with real conviction can not be
overemphasized. Do it often, do it everywhere you
go, and do it with passion.
Delegate & Empower
Lean is best accomplished with the talents and
enthusiasm of many people. Before you begin and
during your Lean implementation you must get as many
people directly involved in the process as possible.
We like to encourage managers to first seek
volunteers for various responsibilities and then
make or encourage assignments according to needs and
skills.
Perhaps one of your maintenance supervisors would
make a great TPM (Total Productive Maintenance)
coordinator? Maybe a skilled, out-going operator
with a good attitude could become a successful SMED
(Single Minute Exchange of Die) champion? And so it
goes.
When you give a little trust, encouragement, and
accountability it will generally end in happy,
motivated champions for your cause who will greatly
multiply your effectiveness. It is also wise to
never forget you have a stewardship to develop your
people to someday replace you and other leaders as
promotions, retirement, and other opportunities
arise. Your Lean process will serve to illustrate
where your talent base lies.
Prepare Support
As you are communicating your Lean vision, be sure
to give fair warning and encouragement to your
support staff at all levels. Very often improvement
efforts need the support of maintenance crews,
purchasing, facilities staff, and others.
Prime your staff to go out of their way to help any
improvement efforts succeed. Make sure they know you
expect their complete cooperation. If priorities are
difficult to ascertain you will need to make the
call.
Take the time to personally follow-up on situations
where support is withheld for Lean initiatives. This
single step will raise expectations and
follow-through where it most needed.
Absolutely Never Punish For Lean Success
If you have never started a conversion to Lean you
have a great opportunity to assess your staffing
needs and make necessary adjustments (provided they
are really necessary), before you begin your Lean
transformation. If you are very heavily staffed and
natural attrition will not resolve your bloated
staffing issues, you must make your cuts quickly. In
reality, you probably needed to get rid of some
non-contributing dead-weight and lack-luster
performers. Now is the time. Don't over do it as
customers can always surprise you with orders beyond
your ability to fulfill them, but take this action
decisively if you must.
We are not advocates of cutting people in "the name
of Lean", but if you know you must remove some
excess workforce do it before you even mention the
term "Lean Manufacturing".
Once you have stated your intention to transform to
Lean you must also commit to a policy of only
laying-off or terminating based on the following
criteria:
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Individual Performance -
The employee does not meet minimum company
standards of performance and merits termination.
This includes all the reasons you terminate any
employee except saving labor dollars due
to Lean improvements.
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Market Performance -
If your company simply cannot sustain its
workforce based on market changes i.e., loss of
market share, obsolescence of your products,
lack of sales, etc., then you might need to make
some individual cuts to keep the company going
as a whole.
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Natural Attrition -
This is the primary method for reducing staff as
needed in a Lean environment. People will
retire, graduate from college, find other jobs,
get sick, die, and basically move on in some way
or another. Let them do it.
It is not uncommon to reduce your staff by about
1/4th to 1/3rd as you make a full transition to
Lean. Be careful with these numbers. It takes time
to allow attrition to trim a company by 1/3rd and it
may never actually need to happen. Almost without
exception when companies become Leaner they reduce
lead-times, improve quality, and substantially
increase on-time delivery. Any of these benefits may
generate increased sales.
You may even wind-up hiring people to meet the
demands of increased market share as your Lean
efforts make your company more competitive. The
hiring of a second, third, or fourth shift to deal
with increased market share and rising demand is a
great problem to have.
How to Handle Extra People from Lean Successes
Keeping excess staff employed when they're not
needed is often difficult to justify to people who
pay more attention to the bottom line than the
overall and long-term needs of the company. Your
Lean team may reduce the staffing needs of a
particular operation or department by 5 or 10 people
after a one week Kaizen Blitz (improvement event).
In keeping with your "Never Punish for Lean"
promise, what do you do with 5 or 10 extra people?
Here are a few suggestions:
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Volunteers:
Ask for volunteers to move to other areas that
need their help. Using TOC "Theory of
Constraints" rationale you may choose to use
this excess labor capacity to off-load your
major constraining process(s). Sometimes
assignments to other areas must also be made.
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Project Teams:
Form a project team out of the surplus employees
to accomplish a stated goal like setting up a
new work area, developing a product, cleaning up
the plant, etc.
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"Loaners":
"Lend" employees to sister companies, suppliers,
and customers. All of these actions result in
benefits to your company as well.
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OJT:
Allow some "Job shadowing" to serve as on the
job training and prepare back-up process
experts.
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Training:
Permit increased training opportunities to
temporarily displaced workers and rotate who the
"temporarily displaced workers" are. No one
should be made to feel they are "on the bubble"
for a layoff at any time.
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Creative Scheduling:
Offer a shortened work week and/or rotate who
gets to work the shorter weeks.
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The Last Resort - As a last
resort ask for layoff volunteers if you have
exhausted all other options and cannot foresee a
need in the next several weeks or months for the
surplus employees.
Remember, you cannot impose a layoff and keep people
motivated to continue working on Lean improvement.
If you have a successful lean initiative, resulting
in extra people, who are then laid off – this will
be the end of your lean program. You will
have communicated clearly to people that if they
participate in the lean initiatives you are leading,
they can lose their jobs as a result.
There are in nearly every company a small handful of
employees who would gladly accept a layoff for any
number of personal reasons. Cautiously investigate
this alternative only if absolutely needed.
It is always cheaper and a better long-term
investment to keep a few extra people employed when
you don't need them rather than layoff even one
person and jeopardize losing the hearts, minds,
passion, and creativity of everyone. The sense of
security you give by committing to these practices
will pay huge dividends even though it may seem like
a leap of faith to abide by them.
We occasionally become aware of companies that
periodically justify layoffs in the name of Lean
Manufacturing. This is a huge mistake and always
hurts the overall success of the company. Sure,
corporate officers, shareholders, and others are
demanding higher profit margins, but the temporary
reduction in labor costs exponentially sacrifices
the gains of an energized Lean team. Would you
improve yourself out of a job?
Enthusiasm Is Contagious!
Lean is great fun and always challenging. You have
the power to inspire your team from the onset. Take
advantage of this truly exciting opportunity; you
won't regret it.
Next – now that self-correction and
preparations are completed, you are ready to move
into action. In Part 3, we'll provide practical
advice and time saving tips to ensure a smooth and
efficient transition to Lean and World Class
Excellence – true Best Practice company status.
We welcome your feedback and comments. Send us your
questions and we'll answer them in a future
Newsletter. Please type in the address.
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Bill
Hanover, is a Senior Associate Consultant with
PROACTION, and has worked on lean management
projects for over 10 years. He has both received and
provides in-depth training on the Toyota Production
System, and successfully adapting its techniques in
a wide variety of environments. Bill is enthusiastic
and passionate about this work - his enthusiasm is
“contagious” and spreads quickly to work teams.
Measurable results obtained have often been quite
spectacular, such as $500K annual savings from
improving just one operation.
