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Lessons from the Lean Transformation of a Small Manufacturing CompanyLean is often considered as a strategy for large corporations, but in reality Lean is better suited for small businesses and even non-manufacturing operations. Here are 3 ways to make Lean work for you regardless of your size or industry.Vivek Naik
Citation preview
Lessons Learned Transforming a Small Manufacturing
Company
Ways to Make Lean Work for You
Vivek E. Naik2012 Internat ional Conference on
LEAN & SIX SIGMA
“We will lose one of our largest customer if we don't ship this order on time”
S A I D T H E B U S I N E SS O W N E R
A Story of a Small Company
The Problem
Most of the customers were upset about the 20+ day long lead time.
Loosing this customer could mean a significant loss for the company
Current State On That Day
This company is a small Manufacturing company
Business had grown from small start to full-fledged manufacturing operations
The initial growth was handled by addition of more and more unskilled labor
They expedited orders when customers screamed for it
Did They try to improve the processes?
They just did not have time for itOften everyone was diverted to expedite one
order
Same thing happened that day They tried to get this one order out
within 3 days
But Something was different this time?
Stakes were high They could not afford to lose this customerIt made them wonder “Do we really don't have time to change the
way we operate”
The Result
They realized there was no option but to change in order to survive and grow
This was their“Burning Platform”
Our Platform is Burning but Where do We Go?
Click icon to add pictureChaotic shop floor
People were unaware of the Standard Process
Without Standard process it was impossible to get any Cycle Times
No proper location for parts
All this lead to lot waste
No Access to Needed Information
There was no data about production, Open orders, Quality, delivery
Production was not able to know: How many and what orders are open? Which orders are overdue? What needed to be shipped that day? Without this stake in the sand we were not sure where
to go
So what was the answer?
“Lean”
Someone suggested that Principles of Lean Manufacturing will provide the solution
So isn’t Lean only for big guys?
They believed that lean could not be applied in their case
But, in reality, Lean is better suited for smaller business and not necessarily manufacturing operations
Why Small is Good?
“It is easier to change the course of a boat than to move an iceberg” – Anonymous
Why Small is Good?
Bigger organizations have too much inertia even though they may have more resources at their disposal
A smaller organization, on the other hand, is much more flexible and responsive to change
Small organizations have few levels of management
This helps to avoid problems of miscommunication because the head and the tail are not very far away
Constraints of the Small Company
Small organization cannot spend millions or stop everything to start a formal program, but…….
“Is that Lean in true essence?”
What is Lean in True Essence?
Lean has to start organically within the organization
You don’t need experts to start lean though it may be helpful
You can learn lean principles by systematic and religious application of common sense
Everyone has to go through the journey to practice, Learn and apply lean in a way that is suitable to their unique process
What did they do?
They did not stop the lines to hold the events.They just did improvements when the lines
were down due to broken machine or delay in getting parts
They started small and thought big, from just one workstation to entire shop floor
They trained our people to solve their own problems
Their Achievement
They have tremendously improved their delivery from 20+ days to 97%+ of the orders shipping within 3 days
This is story which many people can relate to especially if you are in small manufacturing company
Success may vary from place to place We will explore the reason why and how to get
started using some of the lessons I learned working for small company
HOW CAN YOU MAKE LEAN WORK FOR YOU?
Lessons Learned Along the Way
LESSON 1
You Don't Need To Solve All Problems To Be Successful
The Assumptions
We need a roadmap to apply lean with every detail planned out from beginning to the end
We have to solve each and every problem that is out there
The thought of solving so many problems at once is over whelming and stops many before they even start
All Problems are Not the Same
Breaking the problems down and tackling only the important problems is necessary (80/20)
Don’t try to solve everybody’s problem yourself
Only Few need creative skill to solve
There is a big chunk of problems at the bottom of the pyramid
How do You Solve Such a Big Chunk of Problems at the Bottom of the Pyramid?
Train and empower all your people to solve their own problems
When you allow the people who run the process to also do the improvements, they own the change
This is helpful in sustaining the change Also the synergistic effect of everyone solving
the problems gives a tremendous momentum to your change process
What to Remember
Only few important problems need to be tackled to make a big impact. If you tackle the top 20% of issues, it will help you achieve 80% of the solution.
Problems are like a pyramid – there’s a huge base of simple problems which can be easily resolved and small set complicated problem which needs creative problem solving skills.
LESSON 2
Start By "Cleaning House" And Standardizing Processes
Clean Work Place Is Efficient and Safe
Having a place for everything, and getting rid of unnecessary tools and parts, makes it easy to find the necessary tools and parts
This helps you to work more efficientlyAnother advantage is that you immediately
know if anything is missing from its place
5S
The word 5S stands for Sort, Straighten, Sweep, Standardize and Sustain
5S could be a good starting point of any lean transformation and forms a catalyst for a culture of change
Due to the very visible results it makes the process of buy-in easy for both the shop floor personnel and management
Start with your own personal workplace
Do what you preach
Learn the process before teaching others
For everyone their workspace is special and most would not like to change it
It is humbling to realize how difficult it is to be changed than to change others
Choose the team of people who are most supportive to the change
Choosing the right people guarantees success and creating the right first impression
This initial team will help in promoting and spreading the things learned
Don’t make it a project
Allow things to be done during routine time
Do it in steps to allow people to get comfortable and stable in their new environment before moving to next step
What to Remember
Some of the key points of how 5S helps in laying down the foundation of Lean Transformation are:
• Standardization of process provides a stable base for incremental improvement• Visible results helps boost morale of the people
who then take pride working in the area• It is an enabler of “Continuous Improvement”
culture• Prepares the workplace and people for
implementing other Lean tools
LESSON 3
Motivation Gets You Started But Habit Keeps You Going
Why Sustaining Lean is Difficult?
Lean transformation works beautifully in the beginning but many fail in sustaining the efforts
This is not the fault of the people involved but the way traditional management works
Why Traditional Management Fail
Traditional management is results drivenIt is mostly concerned with the end result and
not the means to get thereThis leads malpractices like expediting
orders, over production, and excess inventory
Lean Management
Only by support and proper leadership/guidance you can drive your people to continuously improve the processes that add value to the customer.
The management system that helps you to achieve this is a Lean Management system.
Lean Management system uses various tools to connect the purpose (Providing value to customer) to the process and people.
Lean Management
Elements of Lean Management: Leader Standard Work
Leader Standard Work sustains the systems and integrates the changes made during the transformation process
Daily AccountabilityVisual Controls
Visual Control and Daily Accountability helps keep the process and people aligned to solve problems as they arise
Discipline Discipline of the leader ensures that standard work is
followed and the whole system works coherently
From: “Creating Lean Culture” by David Mann
What to Remember
The elements of lean management, helps the leader to be accountable to the process by religiously following the “leader standard work” and discipline to the point they become a habit.
This change in habits is essential for mental transformation required in a lean manager
CONTINUING THE “CONTINUOUS IMPROVEMENT”
Continuing the Journey
Continuous Learning
Continuous learning is essential for continuous improvement
To learn we need to experiment We need to accept failures in our trials as means to
learn something newRaise the bar with every improvement. What was acceptable yesterday may be the focus for
improvement today and tomorrow may need further work again.
It cannot be “Continuous Improvement” if we stop doing it!
Wisdom
By three methods we may learn wisdom:
First, by reflection, which is noblest;
second, by imitation, which is easiest; and
third by experience, which is the bitterest.”
– ConfuciusReflecting and knowing why is criticalCopying is easy but you cannot learn unless you try it yourself may be fail many times before you get it right
The End
ht t p : / / t w i t t e r. c o m /v i v ek na i k
Fo l l o w m y J o u r n e y a tM y Lean Trans fo rm at i o n B l o g
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v i v ek na i k @v i v ek na i k .ne t