Next Generation Lean: Why Lean Too Often Requires a Leap of Faith

 

The first six articles of this seven-part series on Next Generation Lean laid out a pretty detailed justification for current Lean to evolve. They also laid out a strategy, metric and process that could form the basis of that evolution. In those articles an honest effort was made to base the discussion on generally accepted facts rather than opinions.

I’ll use this seventh and last article to give my view on the state of Lean practice. Another way of saying this is that readers should regard the following as a “Letter to the Editor” about what, in my estimation, have been (and continue to be) the top three barriers to the advancement of Lean practice. Realize that opinions are just that, and there is little doubt that expressing mine will result in some ruffled feathers!

The Blaming of Management

In the depths of their hearts I believe that most of the Lean advocates understand that Lean has—for the most part—over-promised and under-delivered. One outgrowth of this is that rather than personally accepting and trying to address Lean’s shortfalls, most of these same people have instead tended to point the blame finger at others. And the prime target of much of this finger-pointing seems to be the very managers from whom they are trying to gain support! A strategy of assigning culpability to those you are trying to influence usually isn’t very effective, at least in the world I live in. Further, as my mother used to tell me, “When you point a blame finger at someone else, you should recognize that three of your fingers are pointing back at you.” In other words, there may be a lot of blame to spread around for why Lean as a construct has not moved forward, but today’s Lean community needs to appreciate that they have contributed to this outcome by failing to allow and/or lead the evolution of Lean.

Long-time readers of my column know that I have criticized various facets of current corporate philosophy, but the negative attitude towards Lean is not one of them. All that management has asked of Lean is that it “show them the money,” something that up until now hasn’t consistently been accomplished. Lean practitioners seem to want their managers to accept on faith that supporting Lean will provide an acceptable ROI, or at least that it will over time. I have two points to make in response to this position. First, most managers today are not given extended periods of time—years, or even months—to produce positive impacts. Second, unless things have changed significantly since I was an executive, investments—capital or otherwise—generally aren’t made based on leaps-of-faith.

Take my word for it. There are many, many executives who have supported Lean initiatives only to be let down by their impact. These failures have negatively influenced their reputations and, in some cases, their careers. One result of this is that while you’ll seldom hear higher level executives publically express negativity about Lean, in discussions between executive peers there is a growing disdain for it as a cost management strategy. Without executive support Lean will not remain relevant. That is the primary reason that Lean needs to evolve.

Academics Need to Step Up to the Plate

Over the last two decades I’ve had a significant amount of interaction with academics in support of developing better business strategies. Overall I’ve been pretty satisfied with the results of these collaborations. As a consequence I have, in general, a high regard for academia. With that being said, though, I am of the opinion that the academic community has dropped the ball relative to Lean. What do I mean by this?

I have previously stated that managers today need to take leaps of faith to justify Lean initiatives. This is because it is rare for Lean practitioners to be able to provide solid ROI projections for the initiatives they advocate. Sure, academics have documented hundreds, if not thousands, of case studies that outline how specific companies have benefited from Lean transformations. This is a good first step. However, individual success stories are usually not effective in developing sound ROI projections. What is needed instead is a more general analysis of accumulated Lean impact data. I’m talking about analyzing data from a statistically sound sample of individual case studies such that the projected impacts of specific Lean activities can be tied to the various metrics used by executives in making business decisions. Why is this important? Executives are generally not willing to wait until the completion of a multi-year transformation to see if an initiative they have sponsored (and maybe staked their career on) will produce the necessary business results.

Impact projections are required to financially justify investments of corporate money. Granted, basing impact projections to statistically sound sample sizes takes more work than writing up individual case studies, but that’s “where the rubber meets the road” relative to gaining management support. And historically, it is the role of academics to deliver this type of process analysis.

Another beef I have with academics is that they, for the most part, have seemed to be along for the ride. The focus of this series has been on the need for Lean to evolve. Where are the academic results that can be cited proposing anything comparable to the strategy, metric, process and tools outlined in this series?  There aren’t any, at least as far as I have seen. Rather, academia has tended to embrace the current practice of Lean, ignoring rather than addressing its shortfalls. Sure, there are exceptions to this, but for the most part academia has let Lean down in addressing process-related concerns.

I’ll give you a simple example of what I mean. To do this I’ll use two questions posed earlier in this series relative to Lean. Specifically, managers often want to know:

  • How far along are they along on their Lean initiative?
  • Related to this, how do they know when it will be done?

In this series I’ve proposed concrete answers to how both of these questions can be answered. In talking to both practitioners and academics I’ve heard all of the non-answer answers, such as, “Lean is a journey—you’ll know you’re there when you get there.”

That type of justification doesn’t fly in the corporate world and it’s unrealistic to think that it should. On the other hand, you’d expect that basic questions of this nature would be exactly the type that academics would want to address. In my experience, they haven’t. And until they do, executive level managers will continue to be expected to take leaps of faith to support expenditures on Lean—something they are usually loath to do.

There Really is No Existing Lean Community

It’s almost seems as if soon after its initial launch the people associated with Lean decided that the practice was perfect and needed no further development. And in order to protect its purity they decided to etch the details of its practice in stone. I know this sounds a bit sarcastic but take the case of Value Stream Maps. VSMs represent a pretty basic—and effective—approach to defining material and communication flow. Although their template was for the most part formalized nearly two decades ago they are still the most frequently used tool by Lean practitioners. My opinion is that the existing Lean infrastructure is a bit too top-down and tends to be more interested in rearranging the deck chairs on the Titanic rather than actually acting as a strong advocate for increasing the impact of Lean practice, i.e., supporting its evolution.

One of the most effective strategies for getting constructive input and developing best practices is through Communities of Practice, comprised of top-notch practitioners who are willing to objectively discuss the problems they have faced as well as to share practices they have found successful. This is a more bottom-up approach and for that reason has a better chance of identifying and addressing Lean’s strategy, metric, process and tool needs. I would like to see a Community of Practice formed to take on a leadership role in the development of Next Generation Lean.

There would be a role in this for today’s Lean institutions. They could provide infrastructure by creating and financially supporting such a group. Based on my experience with multiple Communities of Practice, I’d recommend it be comprised of a manageable number—no more than two dozen members—who would represent most Lean practice interest groups, i.e., OEMs, small and medium-sized manufacturers, consultancies and academia.

Lean Order Fulfillment

I’ve invested a lot of time and effort in putting together this seven-part, 15,000-word series. And I didn’t do it for fortune or fame. Rather, I wanted to share what I learned through my 20 years of experience in applying Lean at both OEMs and their suppliers. The basis of what I have laid out was learned during a seven-year assignment with a large OEM—believe me, a true school-of-hard-knocks experience. Our first application of the approach we developed was in positioning that OEM for entry into the Big Box marketing channel. We understood that in order to deliver the profits we needed to justify this move we needed to both increase the Lean-ness of our supply chain and to Lean-up our distribution—our own factories were already operationally efficient.

I was responsible for planning and overseeing the supply chain side of the project work. A general description of this was published as a two-part series (Oct.-Nov. 2013) in Industrial Engineer entitled, “Lean’s Trinity.” The distribution side was planned and overseen by a colleague of mine and his work is described in an article in Interfaces(Jan.-Feb. 2005) entitled, “Improving Asset and Order Fulfillment at…”

I have two comments to make about this second article:

1. First, the sole comment in that article regarding supply chain was that Lean order fulfillment requires “a responsive supply chain with a manufacturing lead time* of three (weeks) or less.” (*The manufacturing lead time referred to was MCT, or Manufacturing Critical-path Time.)

When this article first came out I complimented my colleague—the one that led the distribution side of the initiative—on how efficient he had been by summarizing seven years of intense supplier development Lean activity in a single sentence!

2. Many of the executive-level financial impacts alluded to in this series were delivered by this initiative, and are provided in great detail in the article. In fact, when the article was first published I was a bit surprised that my colleague received corporate approval to provide cost reduction results in such detail.

If you are interested in reading either of these two articles, send me a line—I have a limited number of copies that I am willing to send out.

There is a third document I will include—a reference PowerPoint entitled, “Did Toyota fool the Lean decade community”

I’m not big on conspiracy theories but I do believe it’s credible that Toyota might not have shared ALL of what it considered to be a corporate competitive advantage when they allowed other companies to benchmark and otherwise study their Toyota Production System. Why? I find it interesting that order fulfillment overview comments by Toyota executives (some are which were cited in the third article of this series, Next generation lean strategy, tend to focus on “time to the customer” but nowhere in what they share do you find definition of their metric for measuring this. I’m pretty sure they have one.

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