Lean Learning Center

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The Lean Transformation Roadmap

By Andy Carlino
Lean Learning Center

This is the first installment in a five-part series outlining the roadmap, or guidelines for a lean journey. In this article we will focus on Phase 0 (Zero)the Exploration Phase. Forthcoming articles will focus on the other four phases: Phase I Establishing the Foundation; Phase IIExpansion and Focus; Phase IIIIntegration and Reinforcement; Phase IVReinforcement and Momentum. Roadmaps act as a guide to get you from where you are to where you want to go. They dont prescribe the route you should take, but rather give you a variety of options. You may want the scenic route, or the fastest route, or a route with interesting stops along the way. Your choice will depend on your special set of conditions and criteria. The lean roadmap presented here is based on the standards and approaches of many companies that are succeeding on their lean journey and our best effort to illustrate those experiences. The roadmap consists of five phases but, like any roadmap, it is simply a guide to help companies chart their course through the complex landscape of a lean transformation. No one course is recommended. Your course will depend on your understanding of exactly where you are, what conditions or issues you are dealing with through each phase of the trip, and your willingness and ability to adapt and change based on actual experiences and learning. Its important to recognize that you can view the roadmap from a department, plant, or company level. You can have one part of an organization at one level (Phase I, for example), while other parts, or even the entire organization, are at another level (Phase II, for example). The lines between each phase are often blurred and the characteristics can bleed together. Regardless of what phase of the journey you are in, it is extremely important that you understand and consider your current conditions and criteria. Some of the criteria may be more important in earlier phases than at later phases, or visa-versa. Whats important is that you shouldnt embark on your journey or continue your journey without considering and continually reflecting on your current state, which takes a number of factors into account. For example:

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Business Conditions If you are just trying to survive or are under extreme pressure to immediately improve performance, then leadership should focus on the immediate application of lean tools (i.e., Kaizens, waste elimination, Five Ss, etc.) and save the development of a lean culture for better times. If you are feeling the pressures of competition and recognize the need to improve, get going with the tools but, in parallel, work on changing the culture to sustain and continue the improvements. If you are in a growing, flourishing business that is facing little pressure, then work specifically on developing the lean culture and apply the tools as a manifestation of this culture. Leadership Involvement The ideal state is to have senior leadership actively engaged in the lean journeynot just sitting in a seatbut also driving the vehicle. Unfortunately, as often as not, senior leadership will typically delegate the responsibility of leading the lean journey to others of lesser authority. Sometimes you must lead up. For example, at a major gas and electric utility company, there was difficulty in the early stages to engage senior leadership on the journey, although there was a sponsor in their ranks. To combat this, activities and structures were put into place at the management levels to implement and institutionalize lean. This elevated the value and results of lean to senior leadership. Today, senior leadership is active and very effective in leading the utility on its lean journey. Baggage A current state characteristic that is often overlooked when designing a lean approach is the baggage of the organization. Baggage is the bad taste that has been left by past unsuccessful organizational initiatives. It doesnt make any difference if the baggage is real or simply perceived. Dont ignore it; it must be considered. Some of that baggage may include past corporate initiative (CI) activities resulting in layoffs, failed satisfaction of expectations, or the typical program-of-the-month syndrome. The organization will wait you out or wear you out until the latest initiative fades as well. Culture What is the cultural makeup of the company? Are there particular sensitivities to consider? For the longest time, a Japanese team could not be used at a U.S. auto manufacturer. Part of the cultural considerations may also include language. For example, multilingual capabilities may be required for training and development. We have even experienced literacy issues. At a major aerospace supplier, we introduced the basic tools of lean expecting significant results as the company had many easy opportunities for improvement. It wasnt until there was little evidence of tangible results that we realized that we had some basic reading and math deficiencies that had to be addressed. Resources The desired state is to have resources available to develop and dedicate certified lean specialists to the business units, plants or specific areas. They can act as the internal consultants that teach, facilitate, and help direct the efforts. Because of the size of the company or the competition for resources, lean often becomes an additional responsibility added to someones current responsibilities. Regardless, resource availability or constraints must be considered when designing your approach.

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Integration More often than not, lean is introduced into an organization either during or after other CI initiatives. This often causes confusion between initiatives such as lean and Six Sigma, for example. One is not in place of the other, rather they should be complementary to each other. A colleague of mine likes to explain lean as the tools and techniques you need to daily fight and manage the war. Six Sigma is the tool you need to storm the beach. No matter how you look at it, the organization must see lean as a complement to things you have done or are doing. It must be perceived as the vehicle to take an organization to new heights. Many good things have been or are being done, and you should use lean to continue to leverage these effective effortsnot as a replacement to them. Tension The urgency for lean and its introduction into an organization is always easier when a company is struggling than when it is doing well. The real challenge is to get organizations to embrace lean in the good times. The only way to do to that is to develop and articulate a clear vision of the characteristics of the ideal state. Then contrast that against a deep understanding of your current state and define the gap. It does not matter how well a company is performing because there is always a gap. At a building materials manufacturer in Chicago, Ill., I had a chance to speak to their senior leadership and management and try to instill some tension or sense of urgency. After hours of discussion, it was clear that I failed. They were experiencing healthy profit margins; their market share was growing; and they were practically debt free. It wasnt until we developed the characteristics of their ideal state and then took them on choreographed plant tours designed to uncover an understanding of their current state that they recognized the gap. The tension was immediate and the response decisive. Measurement/Evaluation It is widely understood that your measurement/evaluation system can and will dramatically influence organizational behaviors. Unfortunately, the resulting behaviors often conflict with the desired behaviors of a lean initiative. Carefully look at what you measure and evaluate, and who is accountable. At a major automotive parts supplier, direct labor is the Holy Graildrive out direct labor and you will be rewarded. The easiest way to drive out direct labor is by automating the process, so that is just what they did. However, after closer examination, they realized that their cost actually increased because of downtime, scrap, indirect support, inventory, and other issues. The point is not that automation doesnt have a place in lean; it absolutely does. The point is that the measurement drove the behavior, not the best lean practice. Vocabulary This may seem like an unimportant consideration, but dont be fooled. Employees of organizations

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become increasingly confused as one initiative after another is introduced. If you have a process excellence initiative, then dont change the title. Simply incorporate into it the rules, principles, and practices of lean. If you introduce a lean word into the vocabulary where you already have an existing word with the same meaning, then use your word. At one company, they used a different vocabulary for the Five Ss. But, it was fundamentally all the same practices with exactly the same purpose as Five S. So, why change it? Go For the Pull You cant take on an entire company all at once. So, start where there is a pull for lean rather than trying to push it in another area. Most organizations start lean in their production areas where it is highly visible and likely to have the most affect. The best criteria to determine where to start is by evaluating where do you have the pull? Look for a sponsor, champion, or compelling business need. At the major electric utility mentioned earlier, the lean efforts were started in the finance area, because thats where the champion was and where the pull existed. It eventually spread to the power plant, service centers, and other parts of the company. Im not suggesting that the aforementioned evaluation criteria constitutes a comprehensive list of all things that should be considered before or during your lean journey, but they should get you thinking in the right direction. Other criteria will be addressed in future articles in this series. Now, lets get back to the roadmap. As previously mentioned, it consists of five phases with common elements, but different approaches within each phase. The roadmap will help assess what phase you are in on your lean journey and what you should consider at a particular phase. Remember, the lines between the phases are blurred and you likely will not fit clearly into one phase or another. Each phase is outlined, focusing on the elements of education, application, communication, infrastructure, time frame, tools, methodology, and expected results. The focus of this article is on Phase 0 (Zero). Sounds strange to have an 0 phase, but there is a reason. This is the exploration phase and not all businesses need to experience this phase. For those that have already made the commitment to lean, this phase is often skipped. This phase exists to help assess whether or not lean is appropriate, where it is appropriate, and how to start. Typically, this phase is initiated by leadership and/or management trying to understand more about lean, how it might fit in the organization, and, most often, whats the payback. The Phase 0 approach elements generally are defined as follows: Education The major education focus at this point is to develop an awareness and general understanding of the application and benefits of lean. It may also include an assessment of the organizations current state in order to compare it against the necessary learning and to assess the fit. In fact, the inquiries may be better defined as exploration rather than education. The audience for this education is typically those who have initiated the inquiry or their delegates. The education or exploration can come in many forms, such as seminars, conferences, networking, benchmarking, or it could be as simple as reading or

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interviewing. Most of the time it is some combination of many of these methods. Application There is very little application of lean tools and techniques at this phase, except possibly for experimentation. I would suggest that application should actually be discouraged. Applying what you know very little about could easily result in a failure and taint the picture of lean. Weve seen it happen often. A company latches onto a particular tool, gives it a try, and fails. It could have failed because of poor implementation or simply because it was the wrong tool for the organization. Regardless, the result is lean isnt for us. Imagine a hospital investigating lean and trying to apply take time to the emergency room or u-shaped cells to the surgery rooms. The tools dont work, but it doesnt mean lean doesnt apply. Communication There is no real formal communication at this point, but rather a rumor mill or simple transfer of whats been discovered during the exploration. Be prepared to respond to any perception that lean is coming and the fears that may be attached or grown from that perception. Even in this early exploration phase you must be cautious and manage the expectations. Infrastructure Essentially there is no infrastructure for lean this early on nor is it required. There are probably just a few people in the organization in the process of investigating the opportunity and assessing the application. There may be some reporting and a decision-making structure, but thats about all. Time Frame As mentioned before, if youre already committed, skip this phase. This phase might take several months, but not a year or more. If this phase does extend into a year or years, you can usually expect some void in leadership and a total absence of tension. Any real effective exploration of lean can and should easily be completed in a short period of time given all the references and resources available to help.
Tools/Methods

The application of lean tools is discouraged at this phase. However its common that some tools are tried. The most common attempts are with Kaizen Workshops, 5Ss, and Kanban. The application of these tools at this point will likely lack understanding of purpose and appear disjointed. Often, because of the misplaced application, the tool can actually become the organizations definition of lean and has the potential to sour an organizations taste for lean. Ive been in many organizations where lean equals Kaizens or lean equals 5Ss. Kanban can be particularly dangerous at this stage because process stability hasnt been sufficiently established to recognize the power and potential of the tool. It is crucial to understand that lean is not about a tool or even a set of tools. It is about thinking and understanding of purpose.

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Results There is little-to-no performance gain expected here, except for possible event gains from a Kaizen. The most that should be expected at this point is a clear understanding of lean, recognition of the potential, and an awareness of the challenges.

The Lean Transformation Roadmap: Part 2 of 5 Establishing the Foundation Last month we began the discussion on the five-phase roadmap for lean implementation. In Phase Zero we investigated the characteristics and approaches used to explore the applicability of lean to your business environment and a potential starting point. This next phase assumes you have made a decision to move forward with your lean implementation and you have determined what you want to do. Now you must examine how you are going to do it. There is an important distinction to be made here. Recognize that Phase 0 is a focus on business conditions and not a business type. Simply stated, lean applies to every type of industry as long as it is recognized as a way of thinking. Lean is about rules and principles, not a collection of tools. Unfortunately, lean is often determined not to be applicable to certain industries because it is equated with tools (kanban, Five Ss, takt time, TPM). If these tools dont fit the business, lean is deemed to not be appropriate. The key is to first understand the rules and principles of lean and then to engage the best toolone that will manifest lean thinkingfor that industry. Interestingly, my experience suggests that, regardless of industry type, the lean transformation roadmap also applies. Ive seen it in automotive and aerospace manufacturing, healthcare, electric and gas utilities, food processing, automotive dealerships, electronics, medical devices, consumer goods, and many more. It makes no difference what you produce or what service you provide. Lean will apply and you will go through the phases, either unwittingly, or through a planned effort. Your awareness and understanding of these phases will be an important element of your success. Before venturing into Phase One, its important to clarify some misconceptions specific to lean systems development. Its About Systems Every chance I get, Im going to get on my soapbox to preach and to push, lean is not about tools! As previously mentioned, many people and businesses view lean as some assorted collection of tools. This limited snapshot of what lean is all about is the single biggest contributing factor to failure. And, unfortunately, many more companies fail (or dont reach their potential) than succeed on their lean journey. Im appalled and overwhelmingly disappointed in the failure rate. It is a symptom of less than stellar performance from the lean experts, and I will confess that, in the past, I have been as guilty as others. Its time for us experts to recognize (first) and admit (second) that we must stop selling and implementing lean as Kaizens, Five Ss, TPM, or some other tool(s). Remember that old saying If all I have is a hammer, then every problem is a nail. Certainly tools are an important part of the lean system. I cant fix my car without tools. But the tools are no good if I dont understand the mechanical system of the vehicle.

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Lean systems require that you understand the thinking of leanyou need to recognize the purpose of what you are trying to achieve in order to select the appropriate tool. It also requires that you have an evaluation element (performance measurements, incentives, etc.) that not only reflect your achievement, but actually drive the appropriate behavior. And lastly, you need internal systems (IT, HR, etc.) to connect the organization together. Its the combination of thinking, tools, evaluation, and internal connections that constitute a lean systemand lean thinking is at the core. Lean is a Journey One of the questions I most often get asked is When will I be lean? The answer is simpleNEVER. If you think that there is some end point when you can proclaim We are lean, then you are mistaken. You may be leaner, but true lean is a journey that never ends. There will always be a gap between where you are (current state) and where you would like to be (ideal state). Since there will always be a gap, there will always be an opportunity to improve. Proclaiming you are lean will only serve to draw a line in the sand and effectively stop any forward progress. However, there is a need to proclaim successes along the wayto recognize and reinforce the sense of accomplishment by the organization. True success, however, is when an organization continues to move forward at such a pace and with such a passion that, regardless of how well it performs, it is difficult to slow it down and impossible to stop. Toyota, Tokyo, Japan, just recorded a $10.2 billion profit for last year. In that very same year, it reduced operating expenses by $2 billion dollars. Toyota is a company that, by most peoples standards, is lean. Good thing Toyota doesnt think that way. Its strategy never changesit always focuses on the ideal state, and it simply executes that strategy better every year. Now, back to the roadmap. Last month I explained that the lean roadmap is simply a guide and doesnt prescribe the route you take but simply helps identify the different routes. I also mentioned that the lines between each phase are blurred. You will likely not clearly fit into any one phase, nor will there be a clean break from phase to phase. You may even move back and forward through phases. Phase One is about Establishing the Foundation. This phase is characterized as the surface application of the basic tools of lean as well as the beginning development of the lean culturethe rules and principles. In this phase we focus on building an understanding that lean is about a way of doing business and not simply a series of events or projects. This is also the phase where you begin to understand and apply tools to uncover the true current state and begin to build tension in the organization. Tension is important for an organization if it is ever going to recognize and embrace the potential of lean operating systems. Tension is developed by defining an ideal state, having a deep understanding of the current state relative to the ideal state, and then exposing the gap between the two; the wider the gap, the greater the tension. You can use this model for the smallest of activities all the way to the vision of your business and everything in between. This is particularly critical in companies that are performing well, or at least performing well against their own standard or an industry benchmark. If your business is in trouble, you

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wont have to worry about building tension because you wont just have tension; youll likely have stress. Ive worked with organizations that, when exposed to the gap, relieve their tension by lowering the vision of their ideal state or inflating their current state. Most of the time, businesses simply choose not to recognize their true current state. This is where the lean tools can be invaluable. The Phase One approach elements are generally defined as follows: Education Education begins in earnest in this phase. The individuals who are taking critical leadership and implementation roles in this early state are developing a deep understanding and appreciation of the rules and principles of lean. They realize the purpose of lean tools is to act as a countermeasure to problems and as vehicles that reveal lean thinking. The how-to or skills development for lean tools is best accomplished through application. However, the focus will be primarily on the basic tools. One very effective method to develop with these lean tools skills is the Learn, Apply, Reflect approach. LearnProvide the training and expose them to the why and the techniques of how to implement a tool. ApplyTransfer learning immediately to their area where they can test and apply the newfound knowledge, always recognizing the improvement or potential for improvement. ReflectReview the effectiveness of the application, validate the internalization, and continue to do what was done well and do differently what needs to be done better. Application Application is a very big part of this phase as well as all subsequent phases. In this phase, it is typically focused on one or many small areas of the organization. For example: In a food processing company with multiple plants, we started in a small area in each plant. However, we focused on a different area in each plant. In one plant we were in maintenance; in another we were in processing; and in packaging we were in another. This gave the company the opportunity to learn from different areas. The primary purpose of the application is to test the effectiveness of various basic lean tools and to engage the organization in some small, yet meaningful and highly visible improvement activities. Application at this phase should also be used to evaluate the organizations response to provide the feedback needed to help assess the continuing implementation plan. Rest assured that, during this lean journey, you will often revise and refresh your implementation plan. Application in this phase is more about learning and cultural change than it is about breakthrough results. Communication Communication in this phase is used to build the burning platform that helps the organization realize the importance and value of lean. It should enlighten your companys potential while providing insight into what lays ahead. This is also the phase where you must recognize the need to manage expectations. This is one of the single biggest challenges during the journey and, if not addressed during Phase One, becomes increasingly difficult to manage in later phases. The old adage under promise and over deliver serves an organization well in this early stage. Ive performed many lean assessments and it becomes immediately evident that a business has not done a good job of managing expectations when I hear statements such as: Were moving too fast. Its going too slow. It doesnt apply to our area of the organization. I dont see any results. And all are from the same company. Communication can take many forms in this phase, but the message needs to be the same. You can use

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existing channels of communication such as newsletters, town hall meetings, bulletin boards, and other formal mechanisms. One approach we have found to be very effective is to develop a cascading communication plan where the message cascades down through each level of the company starting with the CEO down to the shop floor. The only caution with cascading, as with any direct person-to-person communication, is to ensure the message doesnt get diluted or filtered to suit the messenger. Infrastructure You have an infrastructure in place to manage your business. You should also develop an infrastructure to manage your lean implementation. In this phase, the efforts are probably focused more on role clarification and assigning of specific responsibilities than on building a hierarchy. This infrastructure will be completely dependent on the resources you have or make available. This is also the phase where external resources will be of the greatest benefit. Its in this phase when you may ask questions like:

Do I commit full-time resources to this effort? (lean specialist) Should I build an internal lean group competency? Do I centralize or decentralize the lean expertise? What does my management oversight look like?

Additionally, you likely will be establishing some clear goals and metrics as lean targets for the company. The infrastructure will evolve over time as more resources become available and the lean expertise of the business matures. Time Frame Phase One should not take more than a year, even in the most resource-constrained organization. My experience suggests that if you have not established a solid foothold for lean and demonstrated measurable results within the first year, you can expect organizational support to diminish and attentions to focus elsewhere. As with all cases, there are exceptions. At a medical device manufacturer, its firstyear focus was to establish the culture, so it was less concerned with the metrics. Tools and Methods The application of the tools in this phase has three primary objectives. The first is to stabilize operations for testing and experimentation. The second is to provide the foundation for sustained learning and the internalization of lean thinking. And lastly, to achieve measurable results, is to realize a solid return on the investment. Some of the tools to consider include Kaizen Events, Waste Walks, Learning Laboratories, Five Ss, Visual Management, Standardization, and a few others. No single one of these tools will satisfy all of the desired objectives. I recommend a combination of tools, some implemented in parallel and others in series. For example: A Kaizen Event is designed to achieve rapid measurable results while Learning Laboratories are designed to act as living organisms that instill lean skills and thinking in a small part of the organization. The parallel application of these techniques will easily satisfy the three primary objectives.

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Another example: Executing Waste Walks should be one of the first, if not the first, lean skill to be developed, even before Five Ss (which is often used first). This allows the company to identify opportunities for improvement, to observe its current reality, and to understand and appreciate the purpose of the other tools. Five Ss then becomes recognized as far more powerful than just a housekeeping tool if the potential for waste elimination is obvious. Results In this phase, results should be based upon getting measurable performance improvement as well as establishing a foundation for the cultural transformation. If a company needs strong performance gains quickly, it can pellet it with Kaizen Events and/or move quickly to Phase Three. Recognize, however, that a proper foundation will not have been established and you likely will pay the price later in the lean implementation. Typically, performance gains will be localized and the metrics will be fairly standard: safety, quality, delivery, and cost. Broader metrics like lead-time will probably not be impacted since there has not yet been a broader systems approach in this phase. The results should be used to examine and assess the effectiveness of the internalization: Have things stuck? Are behaviors changing? Are the rules and principles vocalized? This is also the phase where reflection may be started and can be very beneficial. Periodically ask: What was supposed to happen? What did happen? What should be institutionalized? What should we do differently?

The Lean Transformation Roadmap: Part 3 of 5 Expanding with Tools, And Deeper Thinking In previous articles in this series, we examined the first two phases of the five-phase roadmap for lean implementation. In Phase 0 (Zero), we investigated the applicability of lean to your business conditions and explored what you should consider in order to move forward. Phase I assumed that you made the decision to move forward and you now need to develop an approach for implementation. Generally the approach would focus on the surface application of some basic lean tools in a small, but clearly defined part of the organization. In Phase II we will examine expanding lean to a larger part of the organization with a deeper penetration of the lean tools and the lean thinking. One of the implementation techniques identified in Phase I was Lean Learning Laboratories or L3sTM. I am a huge proponent of L3sTM. They have proven over and over again to be the most effective lean implementation technique available today for developing lean skills and internalizing lean thinking. Since L3sTM should be an integral component in each phase of your lean journey, they require further

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explanation before proceeding with discussions about Phase II. What is a Lean Learning Laboratory? Simply put: Its a place (determined by process, subprocess, or geography) to experiment, learn, practice, and apply ideas, concepts, and tools at a faster pace with less risk and with a greater frequency than throughout an entire business unit. It consists of a small group of people in a highly visible area of the organization who will successfully learn and apply the rules, principles, and tools of lean, and are the catalyst for broader application throughout the business unit. Usually L3sTM start in production areas, but they are just as applicable to the business offices as they are to the production floor. A Chicago manufacturer of construction products started its first two Learning Labs in the roll-forming production process and the customer service area. Lean Learning Laboratories are not events. They dont have an end date. They are living, dynamic organisms that continue to develop skills and expand influence. The labs typically consist of five-20 people composed of subject matter experts from the defined area, supervision/management of that area, upstream and downstream process representatives, and internal supplier representatives. For example, at a major dairy products company, the L3TM is established in the butter churn area. The day-to-day operators (subject matter experts) are part of the lab team, which also includes a supervisor, representation from milk operations and packaging operations (upstream and downstream operators), and PM, quality, and production scheduling (internal suppliers). The training and development of the L3TM team members can take on many different looks, but two key tactics must be included. First, always provide training using the learn, apply, and reflect approach. Train the group in a new lean skill, have them apply their newly learned skill to their laboratory area and finally, reflect on the effectiveness of the application and internalization of the skill before moving on to the next training. Second, train the group in the basic lean tools to stabilize the operation before introducing the more advanced tools. For example, you dont start with Kanban of one-piece flow as the first tools. You need to first get the measurements in place. Put mechanisms in place to systematically eliminate waste and surface problems. Five S (sift, sweep, sort, sanitize, sustain) the area and develop techniques for standardized work. Establish a stable platform to build upon. Once you have established an L3TM in one area and you are satisfied with the approach and effectiveness of application, start another lab in another area. Ultimately, you can and should have many labs in many different areas at the same time. They may each be at different levels of lean maturity, but they should all be going in the same direction and learning from each other. We often use people from a mature lab in one area to seed the start of a new lab in another area. There are, however, some basic requirements for success: Active participation of all support functions in sustaining the Lean Learning Laboratories. Building of early management review (auditing) into the implementation schedule. Use the plan-docheck-act cycle approach. Establishment of realistic timing to meet organization commitment to the laboratories. Timely expansion of L3TM throughout the organization. Measuring of Lean Learning Laboratory progress and impact on organizational performance.

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Consistency of processes from shift-to-shift, lab-to-lab. Use of training modules that are based on organizational needs and opportunities for verifiable success. Training that includes application and repetition for internalization. A defined decision-making structure. Establishment of laboratory huddle/team, meeting expectations, and structure. Dedication of time and materials to allow the laboratory teams to do what has to be done. Its important that you have a good understanding of the Lean Learning Laboratory approach and implementation as we move into the next phase of our lean journey: Phase II, Expansion and Focus. This phase is characterized by expansion of the lean application beyond the initial areas and with greater depth. The focus is now more on critical business issues, not just localized issues and opportunities. At this point in the journey, you should have acquired a strong appetite for lean. It may not be pervasive, but should certainly occur in pockets of the organization. You need successes to prove the value of lean and you need prophets to spread the word. You probably can get to this point with very little active engagement by leadership. However, moving through this phase will not only require very active leadership involvement, but also very specific and well-defined direction from leadership. You are going to be infiltrating and impacting most of the organization. This will complicate the implementation and expose you to more organizationally-based obstacles in the lean journey. Additionally, in this phase, localized improvement is not enough. You need to move the organizational needle on the performance gauge. All the stakeholders need to recognize the impact. You must have leadership actively engaged if you expect to overcome the obstacles and understand the critical business issues. Jim Collins talks about the flywheel effect in his book Good to Great. The premise is that change is like pushing a large, heavy flywheel to build momentum. It takes a lot of effort to get it moving, but eventually, over a period of time, it builds its own momentum. You need the efforts of leadership to keep pushing the wheel and building momentum. Without its involvement, every obstacle will slow the momentum, requiring even more effort to continue. The goal is to get the wheel to move on its own so that it cant be stopped or slowed by any obstacle or barrier. At a major public gas and electric utility, we were able to make huge gains in localized areas like the service centers and power plants. As we attempted to expand the lean focus and application throughout this very complex organization, we were challenged with one obstacle after another. Regardless of how real or fabricated the obstacles were, we found that we could no longer overcome them with brute force or our localized lean successes. We needed help. Once the CEO, two presidents, and a gang of vice presidents got actively engaged, it was remarkable how many of the obstacles simply disappeared or were overcome. Additionally, we were surprised at how little alignment and connection existed between the organizational goals and objectives versus the proposed lean activities. You cant gain alignment, and connection (policy deployment), without understanding leaderships expectations and without its active direction.

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Education In this phase, education needs to be focused both up and down the organization. You need to build deeper skills down into the organization and across a wider cross-section to deal with tough problems and bigger opportunities. In Phase I it was inch wide and mile deep. In Phase II, its closer to mile wide and mile deep. Equally important, however, is the education of senior leadership. They dont need to know how to use the tools. They need to understand the rules and principles and be educated enough to recognize the purpose of the tools. Senior leadership cant effectively direct and be actively engaged in what they dont know. Also, the education in this phase should be as much about internalizing the thinking of lean as it is about the tools and techniques of lean. If I were to assess your organization at this phase, I would expect to hear the language and observe the behaviors reflective of lean thinking. This phase is as much about cultural change as it is about operational change. Application In the small, localized areas that have already started on the lean journey, the focus should be on the application of more advanced lean tools and the development of mechanisms and structures to sustain performance gains and move to another plateau. During this phase, much of the application from Phase I should now be standardized and the lessons learned captured for broader application to all areas of the organization. Also, the application becomes more focused and aligned with key business issuesthose critical process/performance opportunities that will generate significant measurable gains. Application is no longer in one area of a plant or plants. It is moving into every area of the organization based on a well-planned implementation approach that is clearly aligned with the key business opportunities. Application in this phase is far more directive and less ad hoc than in Phase I. Communication Communication should continue to build upon the message from Phase Irecognizing the importance and value of lean. Communication should also focus on the tangible results of lean and the sharing of best practices. The communication methods should also be vehicles that provide direction or act as a compass, deploying clear goals and metrics throughout the organization. These metrics should be as predictive as possible and focused on strategic objectives and desirable outcomes versus rearview mirror results. Also, one of the most effective communication vehicles will be the one-on-one personal communications between those people who have already started on the journey and those who are about to begin. Leverage this opportunity for informal communication with a formal structure. Dedicate specific times for some learning circles where people can share information. As is the case along any point in this journey, be cautious about managing the expectations. Dont over promise future commitments and artificially inflate past results. Infrastructure The infrastructure you will develop is based on resource availability and leadership commitment. At the very least in this phase, lean roles and responsibilities should be clearly defined and some key operational leaders should be driving education and execution. Individuals should be identified as your internal lean specialistyour internal consultants. These individuals may be part of a centralized lean group or may be within an operating unit, or both. At a major public gas and electric utility, during this phase, the lean specialists were developed and

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provided support from a centralized group. However, at some point in their development process as their capabilities permit, they were moved into various business units. You should also consider and develop some sort of a lean oversight structure, possibly a steering or management committee, consisting of senior leadership and key operational leaders to assess progress and provide direction. Time Frame The timing for this phase, as with all phases, is dependent on a variety of variables. What resources are the organization willing to commit? Is leadership actively engaged? Have the early initiatives been successful with demonstrated measurable results? Is the direction clear and aligned throughout the organization? Depending on when and how all these variables, and more, come together will determine the timeframe. A general guideline would be that you should be in Phase II within six months or as far out as two years. Again, as is the case with all observations and comments in these articles, there are exceptions. At a major automotive supplier, the lean implementation effort was very much a lead up initiative. It was key operational leaders and management pushing lean up to the senior leadership group. The senior leadership group supported lean, when they could see the return, but they did not understand the rules and principles, provide specific direction, and were not proactively engaged. It took more than three years before we could convert the push from the management to a pull from leadership. Tools and Methods In Phase I, the focus was on the application of basic lean tools in a localized area. In this phase, there are actually three avenues for application: For the localized areas where stability has been achieved, the focus is beyond the basic tools such as Five Ss, waste elimination, and work instructions to more advanced tools like Kanban, JIT, and quality alert systems, to name a few. For the areas that have yet to be reached, the basics learned in Phase I should be expanded into these areas. To provide a more enterprise-wide application, value steam mapping should be used to identify opportunities and Hoshin Planning should be deployed to focus and align everyone in the organization toward the same destination. At this point, its likely that project teams using lean thinking may begin to tackle areas, processes, or problems that are larger and provide a wider enterprise impact than those that can be handled in a Kaizen workshop. Results This phase is focused upon 25% knowledge building and 75% performance results. There should be an expectation for some breakthrough results that start to move the organizational performance needle. The areas that were the focus of Phase I should be sustaining the gains and consistently improving their performance based upon an agreed set of aligned metrics. The expanded areas of focus should start seeing measurable results at a more rapid pace than in Phase I because of an accelerated learning curve. What you measure is critical in this phase. Not only do the measurements need to align and clearly connect to organizational goals, they need to influence the development of lean behaviors in the workforce. I cannot stress strongly enough the impact measurements have on the behavior of your

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people.

The Lean Transformation Roadmap: Part 4 of 5 Integration and Reinforcement In previous articles in this five-part series we examined the first three phases of the five-phase roadmap for lean transformation. In the most recent installation, we examined expanding lean to a larger part of the organization with a deeper penetration of lean tools and lean thinking. In this phase, well investigate the integration of lean into every aspect of the business. Moving into Phase III assumes that a stable platform has been developed. Stabilized processes and stabilized behaviors are absolutely necessary if you expect to transition to this phase. The goal is to integrate lean efforts into every activity so that it becomes a natural part of day-to-day operations. Lean should be the fabric of the organization. Its what holds people, processes, and products together and dictates how you manage the daily activities. At this point, the lean implementation should be stable enough to handle any person, process, or problem as a matter of routine rather than an exception or set back. Moving from Phase II into Phase III requires recognizing two key points: 1. Leaders needed to take on this challenge, not managers. Managing is maintaining current reality. Leadership is about moving people towards the ideal state. You cant move people to where they already are. Hillary Clinton once said great leadership is moving people toward an ideal state when they dont want to go. This phase is more about leadership than it is about tools. Leadership is not a position or rank. Leaders are those who are capable of moving the organization forward and you must look for them at every level of the enterprise. These people may not start on your side, so you need to convince them with action, not words. Look for people who are influential, respected, mindful, and caring and look for informal leaders. It is key to remember that lean is about transforming thinking. So, in order to lead, you must be able to teach and coach. You cant lead if you cant teach and you cant teach if you arent willing to learn. Teaching and coaching is more than just preaching or making speeches. It requires a deeper investment in people. Winston Churchill once said, Telling is an act. Coaching is making a personal investment in someone. Leadership must overcome the natural resistance to change in the organization. To do this, three things must be present. First, the leader must have both a firm grasp of current reality and a true distaste of being there. Second, the leader must have and be able to articulate a true vision of the ideal state. Third, the leader must have the courage to take the necessary steps to close the gap. 2. Focus on the problems As you transition into this phase, small every day problems will become more evident. This is the

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objective. Problems should not be viewed as embarrassing, but rather embraced as opportunities to improve Typically, we tend to focus on the serious mishaps. However, in one study it was shown that for every serious adverse event, there were 10 less serious adverse events, 100 almost adverse events, or near misses, and 1,000 contributing factors to those events. This illustrates that we cant just focus on the big problems, because we dont know which of the 1,000 small problems might create the big problem. We know that leaders cant solve 1,000-times more problems than they already solve. So instead, we need everyone sensitized to these small problems and skilled in dealing with them so that we can solve the daily problems that generate unfavorable results or lead to the big problem. We cant do this by focusing on just the top 10 list. We must have the mechanisms and skills in place that bring problems to the surface and allow for resolution. As outlined in prior articles, consider the following characteristics in Phase III: Education In Phase III, education should continue to build in both breadth and depth. Everyone in the organization should have a basic level of understanding and skill set. A common language should exist with the meaning clearly understood across the entire organization. Communication will now be easier and more effective because of this commonality and clarity. Some individuals, based on position or capability, should be masters in lean principles, practices, and techniques. These masters should be able to demonstrate the ability to apply, with consistent success, all the tools of lean and should exhibit lean behaviors in every aspect of their day-to-day activities. More importantly, they need to have the ability to teach and coach other individuals in the organization and to recognize high potential candidates that should join the lean master ranks. This is also the phase where lean development is no longer a separate or standalone channel of education. Lean education should be integrated into other existing channels, possibly as a regular part of supervisor development or new employee orientation. One of the reasons that Toyota is so successful is that its Toyota Production System education is embedded in every possible opportunity for every employee starting immediately with new employee orientation and extending into every facet of their work for their entire career. Application In this phase the application of lean should be incorporated in all areas and all functions of a department or location and validated by measurable results. Just moving lean into new areas is not the criterion used to satisfy this phase. This is not the awareness or tryout phase. Expanding in this phase means you are manifesting results that are measurable and indicative of continual improvement in conjunction with the daily exhibition of the desired behavior. This will not happen at the same time in each area of the organization.

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As stated in prior articles, functional areas, departments, locations, and facilities will likely be in different phases of the journey depending on where they started and the pace of their maturity. However, by this phase, no department, function, or location should be untouched. The application of event-driven toolsKaizens, Six Sigma, or demonstration projectswill continue to play a major role. However, much of the application should begin to shift from these forced facilitated events towards natural and conscious behaviors and activities as part of the day-to-day business operations. It should seem as if all individuals are wearing a pair of glasses with with the same lens, allowing them to see and react to every lean principle opportunity on a daily basis. Ive had the opportunity to coach many individuals in various levels of an organization, from CEO to supervisor. Their development at this phase is obvious through the language they use, the questions they ask, the behaviors they exhibit, and the guidance they provide. The application in this phase is seamless and routine versus piecemeal and orchestrated. Communication The formal communication channels developed and incorporated in the prior phases should continue. However, there will be more informal person-to-person or person-to-team communication. The ability to teach and coach now becomes a powerful vehicle for communication throughout the organization. It will be the day-to-day encounters, in meetings or one-on-one, that will provide opportunities as part of the natural hierarchy of the organization. This may also be the phase where you focus on greater communication outside the walls of your organization, possibly to many of your stakeholders. Infrastructure Depending on resources, you have been relying on either a centralized lean group or local lean specialist as your internal infrastructure to apply lean in the organization. It is expected that the roles of the lean group and specialist will change in this phase, depending upon where different areas of the organization are in the journey. For those areas that are in Phase III, the responsibility to lead and implement lean should start to transition over to the area leadership. The lean group is not necessarily growing and its role should shift more to coordination, support, and coaching than implementation. This transfer of lean responsibility requires that the organization design into the lean implementation approach the mechanisms and opportunities to develop the skills within line leadership to assure the responsibilities. Be very cautious. Do not transfer responsibility until you have transferred the skills. Since application is broader and is, hopefully, creating more impact, it is important that you dont move much further on this journey without an overseeing structure to direct and assess. During a recent visit to a snack food company, I was struck by the number of activities that were being undertaken in the name of lean, but were not connected to the specific goals and objectives of the organization. By now, everything you are doing should have a specific purpose based on the guidance and direction provided by leadership. Time Frame As mentioned in prior articles, timing is dependent on a variety of variables. This phase is likely the most difficult one to assign to a time frame. The ideal state would be that you have major pockets of

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your organization in this phase in less than two years. However, it could take another year or so. I highly suggest that around two years into the journey, you assess the status of the first areas of lean implementation and determine your progress. At this point, you should expect that lean is the way to manage the day-to-day business and that continuous improvement is self-directed. I also recommend that as part of your implementation you plan periodic lean assessments of the entire organization. I have been involved in numerous assessments and, in every case, I have found that when used correctly, they are one of the most valuable techniques available to reflect on progress and provide direction. In some cases, I actually numerically score an organization or parts of the organization on its progress so it has a snapshot of its progress as compared against the ideal state and as a point of comparison for future assessments. Tools and Methods Obviously, there is further use of the existing tools set. However, additional and more advanced tools are required in this phase. Although it seems obvious that you should always understand the purpose of any tool or method, it is surprising how few organizations really recognize the intent of the tools they use. When I ask people the purpose of Five Ss, the most common response I get is housekeeping. They couldnt be more off base. Housekeeping and an organized workplace is the result of Five Ss. But, the purpose is to make problems immediately self-evident. A similar misunderstanding exists regarding pull systems. The common belief is that they are designed to control inventory. In reality, their purpose is to simply and specifically connect a supplier and a customer. Tools in this phase should be designed and implemented to satisfy two specific purposes. First is to create standardization up, down, and across the organization. A very powerful, but not very well known tool to help accomplish this, is control point standardization (CPS). We generally accept that standardization of daily activities applies to the shop floor or to those in repetitive transactional type processes. For those in the management ranks, it has been assumed that standardization doesnt apply. However, CPS is a tool used to recognize that all of us, regardless of position, have certain control points and certain things we should be doing all the time at some regular interval. Each of us requires standardized activities to ensure each control point is addressed when and where it should. The more variable our activities are, the more difficult they are to standardize. But there are always control points. We typically start CPS with supervisors, then move up to managers and even senior leadership. The second purpose should be the development of integrated systems that connect the entire organization. For example, many people are familiar with a quality management system (QMS) that integrates quality across an organization. However, at this point in the journey, I recommend that an organization seriously consider the development of an operating system; a system that integrates how you operate your business across the entire organization. This system connects the organization together around common tools, common metrics, common internal systems (like QMS), and common principles (thinking) that are all headed in the same direction.

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Many companies say they have an operating system, but most dont. I have worked on the development of numerous operating systems and have made many mistakes along the way. This has given me the ability to recognize a real system when I see it. At a major automotive supplier, we developed what we called an operating systemit was a checklist that required neither any real thinking nor any real leadership. It was simply connecting the dots of a well-designed framework on a piece of paper. In fact, the paper became the system. When the senior leadership of this company left, so did the system. Which simply means, it wasnt really a system. Results At this point, you will be building upon already-found gains. There will be major breakthroughs and the organizations performance will be moving forward at a constant pace. Some areas of the organization will begin to differentiate themselves from the rest of the organization as a whole. And, the organization will differentiate itself from competition based on performance. Many companies we work with say that they look forward to the time when other companies will visit them to benchmark their operations. Expect that when you get to this phaseothers will notice.

The Lean Transformation Roadmap: Part 5 of 5 Reinforcement And Momentum This article will examine the final phase of the five-phase roadmap to lean transformation. In Phase III, the goal was to integrate lean practices and principles into every facet of the organization to the extent that it becomes the DNA of the organizations existence. In this phase, Phase IV, we are focusing on the continuing reinforcement of lean and the maintaining of the momentum. The phases are Phase Zero through Four. In Phase III the organization embraced lean as the operating system for the business. Lean had become so much a part of the fabric of the organization that it is not and cannot be distinguished from normal business practices. There is some danger when you get to this phase in failing to recognize that lean is a journey that is never done. Another potential pitfall is the possibility of becoming complacent and even arrogant, because at this point, you will be experiencing constant breakthroughs in organizational performance. It is the neverending phase and requires constant reinforcement of the rules and principles of lean and an insatiable appetite for continuous learning. The potential for your single biggest downfall will be the failure as an organization to pursue learning as a core competency. Lean is Evolutionary Lean is not a one-or two quarter transformation. It can take one or two yearsor even morejust to

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build the momentum for this never-ending journey. There are many lean tools that deliver fast and significant results. But, without taking the time to internalize the principles of lean, improvements will slowly deteriorate or plateau at a level far below your potential. This long-range commitment is often a barrier, particularly with public companies whose journey may be interrupted by short-term interests such as the need to report earnings to Wall Street that satisfy financial expectations. When these objectives conflict, it is often easy to abandon the lean efforts in some misguided belief that lean is an expense and not an investment. This belief not only hampers immediate efforts to improve organizational performance, but also makes it twice as difficult to reenergize a lean initiative in better times. You Will Make Mistakes I have been involved in countless lean implementations in companies of all sizes and in almost every industry. I have yet to see the implementation go as planned or as expected because stuff happens. Although proper planning is critical and poor planning guarantees poor execution, perfect planning will not guarantee perfect results. Its impossible to anticipate every contingency. There will be surprises. You will not get the outcomes you expected and you will encounter obstacles you didnt foresee. The key is to accept that there will be mistakes and thats okayjust dont repeat the same mistakes. Your only real failure will be if you dont learn from your mistakes. A couple points to ponder during the implementation: the first is focus on what you can control and influence. The recent explosion of the low-carbohydrate diet is a powerful external influence that has significantly impacted the snack food industry. There is nothing these manufacturers can do about 50 million people wanting to be on a low-carb diet. The key in these situations is to quit the whining about the things you cannot control and to work on what you can controloperations. Second, be willing to take chances and test things. Test tools, test approaches, and test techniques. Too many opportunities are lost to declarations such as, It wont work in our industry or We cant do that in our area. Here are the Phase IV characteristics, which do not differ significantly from Phase III except for intensity, depth, and duration. Education Fostering every opportunity to become a learning organization is paramount to the continuing growth and development of lean in the organization. It is the glue that will hold all other things together and the beacon for an ideal state in every aspect of the business. Education, therefore, should be an ongoing series of opportunities to learn both formallysuch as seminars, workshops, and benchmarkingand informally. In the next few weeks I will be taking several of our clients on a benchmarking trip to an aluminum foundry in Canada that manufactures engine blocks and heads. The group consists of a motorcycle

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manufacturer, a metal stamper, a lead recycler and smelter, a butter and cheese processor, and a company that repairs and overhauls heavy equipment powertrains. This is a very eclectic mix of companies, each at different levels of maturity. There are also many informal opportunities for education including coaching, mentoring, and organization scans. It is critically important to recognize that leadership must promote, encourage, and practice both the formal and informal avenues for learning. For example, participants at our forthcoming benchmarking trip will include one CEO/president, three vice presidents of manufacturing, one vice president of human resources, one vice president of quality, two directors, and others. Application Lean is now not only integrated into every day-to-day activity in the organization, but also fully integrated into every decision-making thought process. The principles and practices of lean should be woven into the collective thinking of the organizationjust as your principles are woven into your individual thinking. Im confident that your principles of honesty and loyalty have impacted your decision-making process as well as your behavior. Lean principles should have the same impact on your organization. One of our clients, an air ambulance company, paid for a competitor aircraft to get a patient immediately to the hospital. Its principle is patient firstbusiness second. It was the principle that drove its behavior. Communication By this phase, you should be communicating to the world. Communication should expand to suppliers, customers, financial institutions, and even the community. Communication in this phase should also take on new meaning and purpose. The goal now is not only to inform but to engage others. Communication in this phase should also be a vehicle to recognize and acknowledge the contribution of employees toward the success of the company. You may even want to pursue one of the many awards that represent organizational excellence. Infrastructure At this point in the lean journey, the skills and infrastructure are embedded in the organizational structure of every business unit, regardless of the service or product they provide. Roles and responsibilities are clear and standardized at every level of the line organization. There likely is still some semblance of a centralized lean group, but it is now focused primarily on assessing the organization to identify gaps and barriers to the continued lean transformation. There is also a leadership/management oversight structure to provide direction and guidance as well as ensuring accountability. The expectation is that the lean group is now mostly a resource for the oversight group and not line management. Time Frame This is the easiest phase to time. Its simplethis phase doesnt end. As long as management and leadership maintain the commitment and the organization continues to learn, progress will continue.

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Tools/Methods By this phase you have used and internalized every lean tool and methodology applicable to your industry and organization. The focus now is not on more tools, but the development of a structured mechanism that aligns and connects the goals and objectives of the organization for the most effective and efficient application of the tools. No corrective action or improvement initiative should be undertaken unless it can be clearly and obviously connected to the goals and objectives. Hoshin planning or policy deployment must be integrated into the planning and deployment of goals and objectives throughout the organization at every level. Results At this point the lean efforts and culture are the drivers for any performance gains in safety, quality, cost, delivery, and even brand value. The benefits from lean not only effect performance, they now effect the strategy and tactics the company employs to compete in the marketplace. In closing, I remind you that this five-part series presented a roadmap, not a recipe, to achieve lean transformation. A roadmap helps us know the lay of the land, but doesnt prescribe the route to take. The different defined phases are helpful to understand the elements that should be considered and the lessons that must be learned to guide you along the ever-changing landscape of your lean journey. However, as mentioned before, the lines between the phases are blurred and not exact. You may even move in and out of the phases. The phase descriptions should be used for reference, reflection, and guidance. Enjoy the trip.

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