Managing a LEAN Transformation: The Seven Pillars
LEAN continuous improvement is perhaps the single biggest profit driving initiative that the typical manufacturing organization can undertake. Most companies possess significant latent manufacturing capacity, the unleashing of which results in a virtuous cycle of lower operating costs, leading to more business, which in turn leads to lower costs. This, combined with a relentless application of LEAN and six sigma tools to drive out the “7 Wastes”, can drive profits to previously unattained levels.
The goal of any LEAN initiative is to increase the efficiency of a process (in this case, manufacturing), by systematically driving out waste, improving OEE and, in general, optimizing your network. The three-pronged method by which this occurs is to put into place the technical, organizational and cultural infrastructure needed for transformational change, change that will drive sustainable continuous improvement for years to come. Technical infrastructure is built through skills training and tools, organizational infrastructure through staffing, processes & procedures, and cultural infrastructure through the consistent application of the first two.
Throughout this entire continuum of evolving focus areas, the foundational theme of culture change cannot be over-stressed, since only through culture change can an organization reach the ultimate goal of self-sustaining continuous improvement. Most LEAN initiatives that fail, fail because those organizations did not establish true LEAN CI cultures. Without an embedded LEAN CI culture, the gains enjoyed early in the LEAN transformation tend to dissipate after the “change agents” (consultants, a visionary leader) leave.
To accomplish this, a LEAN program is built upon seven pillars, and deployed gradually, with evolving focus areas. As “lower hanging fruit” is harvested and as team capabilities mature, a program’s focus shifts from the basics such as 5s, simple OEE improvementplus the elimination of egregious waste (scrap, overfill, and excessive headcount), to more difficult and nuanced endeavors.
The goal of any LEAN initiative is to increase the efficiency of a process by systematically driving out waste, improving OEE and, in general, optimizing your network
A table showing those seven pillars, plus a partial list of the activities and skills that sustain them is provided below.
The following list is simply too large to allow for its simultaneous implementation. For this reason, pillar activities and skills are gradually deployed and in site-specific ways. Each site has its own unique needs and its own levels of competency. Ideally an in-depth site LEAN audit should be conducted, to assess the organization’s maturity with respect to the deployment of the 7-Pillars and their supporting activities and skills. A properly conducted LEAN audit will yield an effective road map for implementing a LEAN transformation.
In the absence of such an audit, a more generic approach can be taken, a brief outline of which is provided below.
1. Phase 1 (6-12 months duration: Pick the “low hanging fruit”)
- Data collection and analysis: Build such systems from scratch if necessary.
- Bottleneck analysis: Identify operational bottlenecks and focus OEE efforts on them.
- OEE improvement: Focus efforts on bottleneck operations by systematically attacking the largest OEE losses.
- Implement 5s: Create workplace order through a strong 5s effort. Weave 5s into the fabric of factory life and enforce standards.
- Implement a Plant Control Process: Build a process of meetings and reports to manage operational information and coordinate improvement activities. At the foundation of a plant control process is a method for managing shop floor performance during each shift.
- Visual Management: Organize the factory floor to provide visual cues to management & supervision when problems exist or when targets are not being met.
- Optimize machine speeds: Most factories do not run their bottleneck machines at their most efficient speeds. Systematically determine those speeds and ensure that those speeds are maintained.
- Scrap reduction: Self explanatory.
- Overfill reduction: For CPG enterprises, controlling overfill is sometimes a HUGE cost savings opportunity.
- Early TPM initiatives: At some point in the 2nd or 3rd year of a LEAN transformation, machine reliability will become the primary obstacle to greater productivity. Since effective TPM takes a long time to implement, it is a good idea to get an early start on it.
2. Phase 2 (12-18 months duration)
- Continue & expand on Phase 1 activities.
- Strategic planning/Vision deployment: On an annual basis, create an integrated plan to meet new performance goals. Set these goals by identifying projects and initiatives to incrementally improve performance over the previous year’s baseline. Organize the Plant Control Process around delivering that performance.
- Cascading MBOs/Vision Deployment: Cascade target performance from the strategic plan down to all levels of the organization. Manage by objectives. Align site, departmental and individual performance goals accordingly.
- SMED: Systematically analyze changeover performance and get much better at doing them. Short and inexpensive changeovers are a necessary prerequisite before transitioning to pull-driven continuous flow.
- LEAN Specific training: Managers, supervisors and shop floor personnel need to understand LEAN, and develop baseline competencies in the use of its tools. Train your people.
- Supervisor development: Teach your supervisors how to lead and manage people.
- Root cause problem solving: Show your team how to root cause problem solve.
Build basic skills across the organization, but also develop a small cadre of RCA practitioners who can dive deeply into complex problems.
- Standard Work/SOPs: Create standardized procedures and checklists for critical jobs (machine operators) and for key activities (shutdowns, start-ups, and changeovers).
- Implement a LEAN Audit process: A LEAN audit process will drive future behavior and will help embed LEAN principles into the culture.
3. Phase 3 (12-18 months duration)
- Continue and expand upon Phase 1 and 2 activities.
- Forecasting, Balanced Flow and Takt Time: Once changeovers have been optimized, good forecasting, balanced flow and takt time are the foundations upon which true “pull driven continuous flow” are built.
- Value Stream Mapping: Many LEAN practitioners conduct detailed Value Stream Maps at the beginning of LEAN initiatives, but the author suggests postponing VSM until the 2nd or 3rd year. The reason for postponement is that there is so much obvious “low hanging fruit” to be found in the early stages of a LEAN transformation. A premature VSM is likely to be a distraction, and many of its good recommendations will wind out being put off for 2-4 years anyway.
- Comprehensive “7 Wastes”: Phase 1 and Phase 2 initiatives will by their very nature eliminate many of the 7-Wastes. The author recommends integrating a Phase 3 Value Stream Mapping exercise with a concerted effort to eliminate the remaining 7-Wastes not addressed during the first two phases.
Finally there is the issue of organizational “bandwidth”. There might be sufficient resources available for a full site LEAN transformation, at least in the beginning, when skepticism about LEAN’s value might be strong. In such situations, it is often beneficial to pilot improvements on specific focused assets. By choosing pilots that do not overstretch limited resources and that have higher probabilities of success, the risk of failure is reduced. Additionally, success breeds success, so a winning pilot will motivate the organization to put more resources behind a LEAN initiative, plus provide a “how-to” template for replication elsewhere.