Author: Rick Bohan

Actually, it never was.

I had an interesting experience recently that involved the manner in which lean has been defined, described, taught, and talked about for these past 30 years or so.  I was asked to take part in something of a discussion group that would toss around ideas as to how lean and the way it’s presented to managers could be “re-imagined”.  I was very much up for the project.  During our first virtual get-together, we divided into four topic groups:  Messaging, Deployment, Site Visits (I never quite understood that one) and…something else that escapes me at the moment.  I chose the Messaging group; in fact, I volunteered to lead it, which meant taking responsibility for pulling my team members together virtually on a regular basis to discuss how messaging about lean principles and methods has or has not been effective.  I was looking forward to getting the chance to exchange thoughts with other practitioners.

Let me take a step back to go over my own view of “lean messaging” as it’s been practiced for the past few decades:  with a few exceptions, it sucks.  The literature on lean (for the most part, IMHO) is boring, jejune, pedantic, and largely free of merit.  (I’ve expressed my views in several of my Industry Week articles, which I’ll link to below.)  There are, of course, no small number of speakers, teachers, and practitioners who are worth listening to.  But too much of what we all hear and read speaks to lean tactics and tools with promises of “greater efficiency” and “reduced wastes (i.e. “costs”).  As a result, managers hire people like to help “their people” implement a “set of tools” and expect “cost savings”.  And they fail.  Over and over again.

I used to work for a guy that got impatient with me whenever I spoke about the organization’s culture and how it supports or hinders lean.

“Managers don’t want to hear about ‘culture’,” he’d tell me.

“Correction,” I’d reply, “Managers who are dumb shits don’t want to hear about culture.”

He was right, of course.  Too many managers want to know how much sin they can commit and still get to heaven.  That is, they’ve heard things that lead them to believe that lean provides a straightforward path to productivity and all that’s needed is a “sensei” and a few “kaizen blitzes”.

All to say, I was eager to find out if my own cynical view of  the “lean message” was mine alone or if others felt the same way.

It turned out that others felt the same way.  I was, frankly, kind of shocked at the extent to which the few of us that met with some regularity seemed to be on the same page with respect to the inadequacy of lean messaging.  We were all of a mind that:

• Lean is all about culture change. If managers are uncomfortable talking about culture change, there’s no other way to talk with them about lean.
• Culture change is about behavior change.  The first people who need to change their behaviors are leaders.  Telling others that they are “committed” to the lean initiative isn’t really behavior change.
• Trying to get “better efficiency”, “more productivity”, “less waste” and “lower costs” is pretty much the road to lean failure.  If these goals are paramount for leaders, it’s not worth talking to them about lean.
• The tools matter but not that much.

  So far, so good, right?  We have a small group of practitioners who are on the same page with respect to the problem at hand.  We can turn our focus to how to change the messaging!  Well, I guess the folks who pulled us all together in the first place got wind of our anarchical discussions and showed up at our last meeting.  It was soon clear that their interest wasn’t so much in the development of “different and effective messaging” as it was in the development of “attractive messaging”.  My colleagues allowed as how “attractive messaging” was directly responsible for most lean failures.  The next thing you know I’m practically shouting at the folks who had pulled us together, team members are leaving the meeting rapidly and suddenly, and the whole effort comes to a crashing halt.

I’m going to try to stay in touch with my fellow team members…we had gotten some good discussions going.  I’m unhappy that things have ended this way.  Oh, well.  Maybe they, like my old boss, have a point…calling  managers who don’t want to talk about their organization’s culture “dumb shits” might not be the best approach.  I guess I just can’t help myself.

 

 

First, everything I’ve read about blogging says that bloggers aren’t to point out (apologize for) long periods between blog posts.  “Just start posting again and forgo the mea culpas,” the experts tell me.  But….two years between posts?  Who does that?

I was recently reading some typically boring article on lean that, like so many others, harped on the importance of takt time.  Now, I’m not one to deride the idea of takt time, especially given that many others seem to find it useful.  (Or I guess they do….else why does it continue to show up in the literature so often?)  It’s just that pretty much everything I’ve ever read provides the same tired definition without really explaining what it means.  

Here’s an example of that  tired definition  (I picked this one pretty much at random…I just web searched on “takt time definition and went to the first one I saw):

“Takt time is the rate at which you need to complete a product to meet customer demand. For example, if you receive a new product order every 4 hours, your team needs to finish a product in 4 hours or less to meet demand.”

First, who gets a “new product order” every four hours? (Given that the first sentence refers to “customer demand”, I assume the author is speaking of new product orders from customers, not production work releases.) Second, in what world is a manufacturer in a position to start on an order that has just been received immediately after the previous one is finished? Mind you, I’m not saying the definition is totally bogus, I’m just saying that it’s confusing.

Here’s the definition in Wikipedia:

“Takt time is a manufacturing term to describe the required product assembly duration that is needed to match the demand. For example, if the customer demand is 10 units per week, then, given a 40-hour workweek and steady flow through the production line, the average duration between production starts should be 4 hours, ideally.”

Once again, we’re left to figure out what to do if we don’t get new product orders every four hours. Or what to do if customer orders come in willy-nilly in a wide variety of quantities and characteristics.

Some books and articles provide a formula for takt time as if customer demand were constant across time and not something that changed moment by moment.

Once again, I’m not saying that the definition is wrong, I’m just saying that it’s not very helpful. No client I’ve ever worked for has the steady, predictable flow of customer orders that takt time definitions always seem to refer to.

We’d be better off if practitioners were more forthcoming about the underlying purpose of takt time (assuming that they actually know it): smooth, predictable flow of material through the manufacturing process. It wouldn’t be difficult to get workers to brainstorm, for example, those things that prevent smooth flow: downtime, scrap, errors, problems with material, tooling, machinery, and so on. It would be easier (and better) to get operators talking about how to reduce or eliminate those things than it would be to try to teach takt time. So let’s do that.

I’m surprised at myself that I’ve never written about Little’s Law.  It’s one of those things we lean geeks love to trot out to show that…we’re lean geeks.

This article gives a quick background of Little’s Law.    As the article says, Little’s Law (and equation) has been translated to the manufacturing setting thus:

Work In Process (WIP)  = Throughput X Cycle Time

Continue reading “Little’s Law”

One of my own maxims regarding lean implementations is that, if a company goes into a lean implementation with its primary goal that of cutting costs…it will fail.  Sadly, too many managers and practitioners disagree. Essentially, they just don’t understand the economics of lean. They tend to look at the wrong end of the transaction between seller and buyer.

The wrong interpretation of lean economics leads us to believe that the best way to get customers is to reduce our own cost structure.  That might be true if what we’re selling is a commodity that can’t be differentiated in the market.  If we’re both selling a product or service that can’t be differentiated, then the customer will certainly buy from the one of us who has the lower price.  Even in that narrow situation, we’re better off seeing the customer as striving to maximize his or her value.  If the customer can’t discern which of our products provides the greater value, it’s rational to base the buying decision on price. The buyer’s decision looks like this:

Here’s the thing:  If we’re differentiating our product on price alone, it’s easy for our competitors to follow suit and price their products below ours.  Now we and our competitors are tied together in a race to the bottom that neither of us is likely to win given that we can’t reduce our costs or our prices to zero. But that’s what “lean as cost reduction” tries to do.

The better strategy, then, is to differentiate one’s own products and services in ways that it’s difficult for competitors to emulate. That’s exactly what lean does.  Let me make this clear:  lean doesn’t provide strategic advantage by allowing the manufacturer to lower costs.  It provides strategic advantage by creating organizational capabilities that allow the manufacturer to provide increased utility to the customer.

I once facilitated a value stream mapping team at a steel making company here in Ohio.  A team member asked me to provide a definition of lean.  He said: “I’ve been to all sorts of seminars and heard all sorts of definitions but I still don’t think I understand what it’s all about.”

I responded, “I don’t have a concise definition but here’s how lean works:  What’s the lead time that you quote when a prospective customer calls?”

“About twelve weeks,” replied the engineer.

“And I bet you hit that every time, right?”

The engineer chuckled, “It’s considered a success if we fulfill the order in sixteen weeks.  We’ve taken as long as 36 weeks to fulfill an order.”

So, I asked, “If we could hit that twelve week mark consistently, would that help the company, even if we didn’t reduce our costs by a nickel.”

“Without question, our sales would increase.”

I went on: “So, let me ask this…if we could consistently hit an eight week turnaround time and still not take a nickel out of our costs, would that benefit us?”

The engineer’s quick reply: “We would control the market.”

The conversation illustrates, in a nutshell, the true economic value of lean:  it differentiates the product and service on factors other than cost.  Though our price is the same, perhaps even a bit higher, than that of our competitors, the customer sees more utility, therefore, more value in our product.    In this case, the buyer’s decision looks like this:

Whence comes this superior value, even if the cost might be higher?  The truly lean organization provides, to customers, what they want, how they want it, when they want it consistently.  Customers don’t worry whether they’ll get their product on time (if at all), in the right quantity (if at all), or if it will meet their expectations and standards.  This reliability differentiates the lean manufacturer from its competitors.  Lean, then, is a top line strategy rather than a bottom line strategy.

“But,” you might reasonably ask, “doesn’t lean, in fact, reduce the manufacturers cost of goods by reducing waste in processes?”  The answer, of course, is yes.  We’ll address that in our next article.

 

 

 

 

 

 

 

This is the first in a series of short videos that will review my take on the goals of Lean.  Spoiler Alert (sort of): You’re not going to hear anything about cost cutting!