MRO Today - From perception to reality

From perception to reality

By Dave Melhus

Did you attend MRO Today’s “Lean Manufacturing University” conference in November? If not, you missed a great opportunity to network and hear how others are transforming their businesses.

As with all conferences, attendees must return home and face the “realities” of their company. A few of those realities are undoubtedly:
• “We tried lean and didn’t see improvements of that magnitude.”
• “We are lean.”
• “Our leadership doesn’t understand.”

All of these are perceptions and would be easy to leave at face value. However, if you search for the root cause by utilizing lean’s “five-why strategy,” the realities might not be the final answer.

1) “We tried lean and didn’t see
improvements of that magnitude.”
Lean is a business strategy that enables revolutionary levels of enterprise-wide performance improvement. Annual gains of 10, 25 and 100 percent in metrics such as productivity, operating income, return on assets, lead time and inventory should be typical. But simply “doing lean stuff” doesn’t guarantee dollars to the bottom line.

Just about every business can provide evidence of some improvement activity: a cell here, a SMED project there, kanban, TPM, visuals, 5-S. Unfortunately, the improvements have not been sustained. They are insignificant in scope or happened months, if not years, ago.

Don’t confuse activities with achieving results. Many times, the efforts are isolated islands. The improvements must be key leverage points in the value stream.

The goal is not just implementing a “lean tool” because it looks or sounds neat. It’s about identifying waste and then selecting the appropriate application tool to drive needed business results. Be cautious of implementing lean for the sake of lean. Remember, it’s your responsibility to drive meaningful improvements in support of the business. For instance, implementing a kanban that has no impact on indirect cost, inventory, lead time, productivity or cash flow should lead you to ask: “Why did we do this?”

True lean companies are rare; their efforts produce results that provide a competitive advantage in quality, cost and delivery. It’s easy to see the relationship between the lean improvements and their business objectives. They employ metrics that ultimately (directly or indirectly) link to a financial result, and they have a process in place to continually improve.

2) “We’re already lean.”
If you work for one of these companies, brush up your resume. Your employer doesn’t have a clue. Most companies think that 10 or 20 percent improvement in lean is great, hence “we are lean.” However, lean is about 50, 100 or 300 percent over a multi-year time period. If your company closes its mind after the first 20 percent, it left too soon.

Lean practitioners understand that the more they implement lean, the more there is to know and do. It’s an interesting phenomenon: Lean leaders become fanatical about eliminating waste, which many times will outstrip the organization’s ability to change. Their only solace is that the rate of change in their company’s metrics is still accelerating. In “already lean” companies, the improvement pace has slowed. Which are you?

Make sure your company hasn’t flat-lined. Are your quality, cost and delivery metrics improving at a double-digit pace? Do you continually raise the bar on what “good” is? Do you benchmark to feel good about yourself or identify more ways to eliminate waste? Get the passion!

3) “Leadership doesn’t understand.”
A key ingredient for success listed in many of the LMU case studies was support from leadership. Typically, the leader had vision, or a leader with a lean background was brought in, or the leader had a “burning platform” and saw no other alternative and took a chance on it. Regardless, the expectation had been set and lean had a chance to grow.

If your organization doesn’t have such a leader, salvation might rest with you. Your key will be results. Leaders get paid to deliver. You will get more support if you demonstrate the ability to convert local improvements into bottom-line results. Most importantly, time is of the essence in the early stages.

Quickly demonstrate the relationship between lean activities and meaningful movement of metrics. And, quickly locate the leverage in your value streams and apply the appropriate tools. The support will grow from there. Miss the leverage point and your leader will view lean as another program. As always, it’s up to you: Complain or be the catalyst for change.

Dave Melhus, the former vice president of operations for Iowa’s Vermeer Manufacturing, is currently a VP with Simpler Consulting. He can be reached at 641-620-1320 or by e-mailing davem@simpler.com.