Why Lean Fails

Why Lean Fails
March 4, 2010 Darrell Casey

Global competition is at such a dynamic level that any day lost without operations improvement imperils the company’s economic livelihood.  To out pace the aggressive environment, companies must create a competitive advantage that establishes greater stakeholder value through radical improvements in product and process.  One of the most prominent methods currently being utilized by many companies to create these enhancements is Lean.  Enthusiasm for Lean is built upon the admired Toyota Production System (TPS) plus the barrage of books, trade magazines, seminars, and consultants that tout Lean as a savior for traditional companies; hence Lean has become the Holy Grail of strategic initiatives.

Characteristically, executives place a high confidence in the thought that by implementing a few selective Lean tools the operation will garner cost reductions, reduced lead-times, improve quality, and for many companies, simple survival.  As such, senior management’s expectation is to drive the strategy from corporate down to the local operation level, linked only to tangible business metrics in hope of securing rapid cost reductions.  Numerous companies are in the midst of Lean following traditional implementation models based on sequential application of Lean techniques through deployment phases that outline a cookie cutter approach and timeline.  These traditional models:

  • Fail to take into consideration the uniqueness of each operation, such as a metal machining versus assembly, and approaches implementation as a “cookie cutter” to be applied to any business or operation.
  • Lead to a prescriptive structure in which businesses feel they must introduce Lean Tools in the set sequence and that each tool must be fully implemented.
  • Focus on the application of Lean Tools hence, businesses find it convenient to select only the tools that they feel will provide the greatest benefit to them by rapid results.

Recent publication of The Role of Change Leadership in an Operations Excellence Transformation Model reaffirms that the traditional Lean paradigm results in nearly two-thirds of the implementations ending in failure while only 16.67% of those implemented have sustained results – though for less than twelve months.  With all the Lean techniques being utilized, why have so many failed in this vital strategic endeavor?  The answer is the overlooked but critical aspect that Lean requires a completely different set of expectations, norms, practices; a new approach in day to day and hour to hour behaviors.

Years of watching the good intents of Lean go astray has lead to a clear understanding that a gap exists between the implementation of traditional Lean versus “Real Lean”.  The gap is the traditional mindset that Lean is simply about conducting or putting into place various techniques of Lean; better know as the Lean Tools.  Techniques such as; 5S, Total Productive Maintenance (TPM), Kanban, Single Minute Exchange of Dies (SMED)have become the buzz words of business.  Management runs to the plant floor putting into place new Standard Work for an operator, yet leave the operator without an understanding of why they need to change to the new method and what the change means for he/she; management leaves in place the old support structures and fails to change performance metrics or follow up on the new methods.  This missing aspect of Lean is the mental calibration and adjustment by each individual within the organization, regardless of position, to adhere to the new expectations and norms.

Organization structures must change, performance metrics must change, methods to follow up must change; these changes enable Lean implementation sustainment.  The operator, left to his/her own device naturally transitions back to their old proven ways when the new tool seems to not be working.  Why not?  The old way worked fine up to this point, plus, the new standard work must not be important because since it was put in place, no one has monitored its use, tracked performance results or shown any interest through follow up.

Without this adjusted discipline, the most typical outcome of Lean implementation is to reinforce old habits and ways of thinking.  As with any new system, when the Lean process is turned on a variety of problems suddenly appear for which operators and supervisors are left to rely on their old tricks for beating the system, using familiar workarounds to get themselves out of trouble.  It is easy to keep managing the same way as always; focused on results. Management must change from this habitual focus on results to the process and its details through disciplined daily examples and persistent practices.  Lean culture grows from these practices as they become habitual and the new Lean culture emerges to replace the mindset learned in traditional manufacturing.

Typically, the only follow up occurs when the operator, reverting back to the old method ensured that “what ever it took today, the product got out the door”, and for that reason, he/she was recognized as the heroic firefighter that saved the day.  What reinforcement is this; not the new Lean way, but the traditional mindset.  Middle management, supervision, and operators are conflicted by being told to conform to Lean, but are expected to perform based upon the old norms, support methods, and measurements.

The traditional Lean paradigm is just the tools known as the tool box that is missing the vital transformation needs from the standard list of steps in the Lean conversions.  True lean, based upon distinctive competencies is created and sustained through the changing of expectations, norms, behaviors, leadership methods, and follow up.  These “soft” aspects are the hard stuff associated with Lean and the very reason Lean fails.  If applying the 80/20 rule, the technical application of the tool is only the 20%; will 20% win the game, create sustainable results…will 20% provide any results at all?  True to the traditional command and control models, execution relies heavily upon the application of Lean tools such as 5S and Total Productive Maintenance (TPM) through single event activities that produce isolated incremental improvement; hence one time cost reduction.

The Lean Tool Box

  • Just in Time
  • Built in Quality
  • Rapid Setup (SMED)
  • Kanban
  • Value Stream Mapping
  • Process Mapping
  • 5-S
  • Poka yoke
  • Elimination of waste
  • Total Productive Maintenance
  • Standard work
  • Visual management
  • Ka i z e n

No time is spent on the organizational change aspects vital to creating the new values, expectations, standards and behaviors that support the technical change.  The only expectation is that the Lean techniques be put into place and used to gain results with little input or participation by the process owners.  Little or no concern is given to the “soft” aspects of implementation such as organization development, change and cultural leadership required to effect transformation to a level of competitive advantage.  The common practice is doing whatever it takes to meet the schedule.  Expedite internal parts, pressure suppliers, airfreight late materials, put on more people, pressure the inspector, reorder missing parts with a fudge factor, overtime, etc.  Most manufacturing managers have learned how to be successful in this kind of system and know the workarounds to ensure success in times of uncertainty where the bottom might fall out in one of several areas on any given day.

The non-sustained performance improvements and slow rate of achievement leads many management teams, impatient for results to the desperate decision to reduce labor, cut overtime, and control all spending.  Sadly, traditional management finds it easier to improve profitability by reducing headcount than the creation of resources with distinctive competencies that lead to continuous competitive advantage.

Dr. Casey is a member of Celerant Consulting with more than 18 years of experience spanning all facets of operations management, lean and change leadership.  In addition to unparalleled industry and consulting experience, Dr. Casey has published; The Role of Change Leadership in a Operations Excellence Model, and  Strategic Lean Transformation: Turning Traditional Lean Paradigms into Distinctive Competencies, while Utilizing X Matrix in the Strategic Leadership Process will be released in the spring of 2010.

Contact him at darrellcasey@comcast.net.

 

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