Are You Real?

By Mike Loughrin, CEO of Transformance Advisors

I had the privilege of hosting a panel discussion at the Supply Chain Technology Conference in Chicago during July. The discussion focused upon what it takes for a real lean transformation and how many organizations are missing the mark with what we call faux lean.

The panel featured four of the world’s best lean practitioners. Each panelist addressed what they see in terms of real lean, as practiced by the leading organizations. They also shared their insights into faux lean, which is often characterized by the practices of the laggards.

The promise for attendees was to help them learn what the leaders are doing to create sustainable organizations and understand how chaotic cost cutting will not lead to long term success.

For those that missed this great event, I have captured the questions and answers provided during the panel discussion.

The Panelists

Nikola Cica
Director of Performance Excellence
Mount Carmel Health System

Tony Heath
Internal Lean Consultant
Optum (UnitedHealth Group)

Tom Cassidy
Manager of Lean Operations
Coriant

Mike Sheahan
President of ISCEA International Standards Board
International Supply Chain Education Alliance

Challenge 1

My company has been working on lean for three years, but it is just random cost cutting projects. What should I do?

Suggestions

  • Costs are certainly important to all levels of leadership. However, chances are they care or are held accountable to other metrics as well; like safety, quality, engagement, and customer satisfaction. If you’re working through a project, are you able to find opportunities other than cost? If so, measure and improve those opportunities using a kaizen blitz event or A3 process.
  • Once the project is completed and successful, you can create a kaizen report out on your project. The key is to engage the cross functional team in the report out. You can show the before and after pictures and improvements. I tend to focus on quality or safety first in my presentation; cost comes later. This may help leadership recognize that a lot of metrics can be improved when you have a cross functional team working together in a lean project.
  • In a nutshell, ensure your efforts are aligned with overall organizational objectives. Randomly choosing projects, particularly with cost cutting as the objective, often results in increasing costs in another area. For example, reducing the time spent on an operation which is constrained by a subsequent operation simply creates more wait time.
  • Most companies have their vision, mission, and goals displayed throughout the organization. But how many employees know if what they are doing actually contributes to achieving them? You need to develop an overall plan for addressing organization objectives and not simply confine efforts to individual functional areas. Define value before starting on any improvement program. With proper alignment, you will be focusing your efforts on being effective by improving the right things and not wasting time making an unneeded process more efficient.
lean not working

Challenge 2

I hear lean is about culture and behaviors. What are the behaviors of the leadership team at companies that are succeeding with a lean transformation?

lean culture lean behavior

Suggestions

  • Leaders need to go to gemba to understand the process so they become better coaches. Gemba walks are a great way to discover what front line colleagues are up against.
  • I tend to think gemba walks are where you find the truth. Organizations will try to solve problems inside a conference by just talking about it – no true problem solving tools. Many already have the answers before understanding the problem. The actions that I usually hear are that it’s an accountability issue or a training issue. Neither are effective countermeasures.
  • If you’re early on in your transformation or you’re just beginning to work on some improvements, one of the first behaviors you can work on is “gemba walks.”

Challenge 3

I keep hearing about something called Lean Six Sigma. What are these people talking about?

Suggestions

  • Lean is a philosophy for eliminating waste, defined as non-value added activities, whereas Six Sigma is a data-driven methodology focused on eliminating defects by reducing variation. Both result in process improvement, albeit via very different approaches.
  • The major difference, however, has to do with the use of people, not tools. Companies successful with Lean embrace it as a strategic initiative, where everyone is empowered to practice it. It becomes ingrained in the company culture. While Six Sigma creates awareness among many employees through Yellow Belt training, primary efforts are driven by a smaller number of black belts and master black belts.
  • Most definitions I’ve seen for lean six sigma refer to it as a combination of two methodologies intended to improve performance through the reduction or elimination of waste. Simple enough, but what has been done to combine them? Typically, lean six sigma programs present them separately, with one following the other – not as a single seamlessly combined methodology.
  • Rather than “lean six sigma,” my preference would be “lean and six sigma.” They are complimentary programs utilizing different skill sets. Highly successful organizations utilize each, depending upon their goals, circumstances and the specific problems to be addressed. Someday, a blended lean six sigma may come about, but we aren’t there yet.
lean six sigma

Challenge 4

It seems like everyone claims to be an expert at lean with glorious tales of success. How do you identify the true experts from the fake ones?

Suggestions

  • It’s not easy to be an expert in Lean because it evolves continuously. But as Bob Emiliani reminds us, real lean is about continuous improvement and respect for people. Those that remember this can at least share what they know, expert or not.
  • Bob Emiliani also reminded us of how difficult it is to adopt lean as it is practiced in Japan. We don’t speak Japanese, we’re not generally Buddhists, we don’t live in Japan, and we’re not part of Japanese history and traditions. Western experts are likely to preach a western version of lean.
  • Dustin Wax of Lifehack says the characteristics of experts are: Knowledge, Experience, Communication ability, Curiosity, and Connectedness. These, like humbleness, seem reasonable to me.
  • Paul Akers, author of 2-Second Lean and other books, tells the story of his trips to Japan. He once returned home to his company FastCap and said, “On a scale of 1 to 100 of lean mastery, “we may be a 3 or 4 and Toyota is 80 or 90.” This kind of humble self-appraisal is a good sign of an expert.
lean guru

Summary

real lean

This is just a sampling of the types of challenges that people are facing with their lean transformations.

Thanks to Nikola Cica, Tony Heath, Tom Cassidy, and Mike Sheahan for giving back to our lean community.

Want More?

Read What is Lean?

Read about the faux program called Lean Six Sigma!

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