How Will Lean Make My Company More Competitive?
Reviews the primary benefits of adapting lean, especially its impact on employee engagement and the resulting advantages. It is through an unrelenting focus on driving higher levels of employee engagement (the heart of Lean) that Lean work processes (aka The Toyota Production System) become strongly embedded in the culture of the company and, as a result, drive very significant and sustained increases in both productivity and profitability.
The single most important question that any organization considering the implementation of Lean should ask itself before embarking on the Lean journey is, "Okay, if we go Lean, will it really make us more competitive?"
The answer to this question is an unequivocal "Yes." But don't my word for this, let's look at the proof.
The next question that would be reasonably asked is, "Okay, if it is going to make us more competitive, how's that going to happen?"
I'll answer that question by saying, "Monday" is a problem. You're undoubtedly thinking, what in world does that mean. Let me explain. Early in 1986 I headed up a group of consultants that did team-building training at the New United Motors Plant, also referred to as NUMMI, in Fremont, CA. NUMMI was a joint venture of General Motors and Toyota. Toyota entered into this joint venture because they wanted to jump start their manufacturing capabilities in the United States; for GM this plant gave them an opportunity to learn Lean manufacturing; aka The Toyota Production System.
But back to "Monday is a problem." It seems that the word "Monday" sounds very much like the Japanese word for "no problem." When NUMMI opened, many of the supervisors, in response to the question from their managers, "Are there any problems?" would answer with "Monday," a typical response that would still be heard in many workplaces. Managers ask "Any problem?" and the typical response from supervisors is, "No problem."
After hearing "Monday" for several weeks, the management team at NUMMI brought the supervisors together and told them, "'Monday' is a problem," in other words, "No problem is a problem."
Why would they say this? For one simple reason. If one accepts a central premise of Lean manufacturing and that is that all work processes, without exception, are imperfect, than there have to be problems. And NUMMI's supervisors were expected to know what a number of these problems were. If they didn't, they wouldn't be meeting their primary job responsibility which was to drive the continual improvement of all work processes, drawing on the expertise of line workers.
So the short answer to the question, "how's Lean going to make my organization more competitive?" is this: It's going to increase the degree to which your employees are fully engaged in their work, becoming problem-finders and problem-solvers. And what drives full engagement? It all starts with managers and supervisors who never say "no problem" in response to the question, "Any problems?" And it starts with supervisors and managers who continually ask the question, "What do you think?"
What does full engagement look like? Let's start with what it doesn't look like. Several months ago I was walking through a manufacturing plant asking line workers if they could think of any ways in which their workspaces might be reconfigured so their work would be easier and also more productive. At one work station, I noticed a simple change that would obviously improve work flow and asked the fellow who worked in the area what he thought about it. He looked straight at me and said, "George, nothing makes any difference as long as I get to work until 3:30." I thought, what an incredibly sad commentary on this person's life and work. I also thought about the fact that this worker was simply saying what many workers think: I just want to get through the day.
But this worker passivity and disengaged can be turned around and turned around with dramatic results. It takes full engagement.
Here's an example of what full engagement looks like. In another plant in which I worked, the company was having problems with a product which, after being stamped in a large press, was sliding down a conveyor belt rather than being carried up by the conveyor to a packing station. When first purchased, these belts had small rubber ribs that carried the product but, over time, the surface of the conveyor became smooth and the product no longer adhered to its surface. One obvious fix would be to replace the conveyor but that was relatively expensive. A line worker came up with a much less expensive fix. As he told the story in a 5S team meeting, "When I was taking a shower last night, I thought about hair spray." Other team members said, "What?" He responded, "I thought about the characteristics of hair spray, it's sticky and it can be washed off." (This product was sent from the plant to be chrome plated so whatever residual hair spray might be on it would be washed off during the chrome plating process.) He continued, "It occurred to me that if we applied a small amount of hair spray to the surface of the conveyor belt that it would be sticky enough to carry the product." Kevin's idea was tried and it worked.
Now what's the really important part of this story? It's that Kevin was thinking about work while he was at home taking a shower. In other words he was actively engaged in his work. And he was actively engaged in identifying and solving problems. No "Monday" for Kevin.
Here's another example. In the worldwide distribution center of a major manufacturer, the folks in the shipping department were frustrated by having to constantly search for shipping labels ... labels that were scattered, haphazardly, on the bottom shelf of small carts. One of workers, let's call her Molly, decided to take direct action. She went home, described the problem to her husband, and on their own time, they designed and built holders for the labels that could be attached to the shipping area carts and would hold the them and make them easily retrievable. A simple solution. Time and money saved as a result of the work of an employee who was fully engaged in her work. No "Monday" for Molly.
As "Kevin's" and "Molly's" multiply throughout your workforce, their creativity and knowledge, their engagement with work, will have a very substantial and continuing impact on your company's productivity.
What kind of impact should you anticipate as a result of the work of highly engaged employees?
There will be two types of impact.
Let me describe the first one by sharing a couple of stories with you. The first one happened about eight years ago when I was facilitating the implementation of the 5S System in a large manufacturer of parts for the automotive industry. After one of our team meetings, a member of the team by the name of Bill approached me and, with tears in his eyes, said, "This is the first time in my twenty-five years with this company that anyone has ever asked me "What do you think?" I thought to myself, what a tremendous waste of talent, because Bill obviously knew a lot about his job and ways to make his work more productive. And his knowledge had never been tapped.
The second story is quite similar. In my last podcast, I mentioned hearing the CEO of a major St. Louis corporation talk about the impact of 5S and other Lean tools in his company. He spoke about visiting a plant in Wisconsin and asking a line worker what kind of an impact 5S had had on his work. The workers answer was, "When I go home, I talk with my wife." He followed up by saying, just as the worker in my 5S team had said, "Until now no one has ever asked me 'What do you think?' He added, 'Most of the time over my twenty years with the company, I went home mad and frustrated and mad and frustrated folks don't make good conversation with anyone, including their wives.'"
The first type of impact will be the development of a workforce with high degrees of energy, motivation, and focus, filled with Kevin's and Molly's and Bill's who are continually looking for problems and, with their fellow workers and supervisors, crafting solutions to these problems, solutions that will increase the productivity and profitability of your organization.
Okay, you ask, what's the bottom line impact of higher degrees of employee engagement? Here are just some examples:
- 49% increase in productivity
- 83% reduction in work-in-progress inventory
- 50% reduction in overtime
- 5,638 square feet of manufacturing space recovered, valued at approximately $845,700
- 520,000 non-value added steps saved each year, the equivalent of 270 miles of wasted motion
- 20 minutes of walk time saved per day equal to one extra week of production
- 23,000 square feet of reclaimed space with a value of $805,000
- 35% increase in productivity
One last anecdote. In just one hour, in a team meeting, a group of employees I was working with identified nine time wasters and crafted solutions which when implemented are conservatively estimated to have a value of over $180,000. Unusual. Yes. Why? Far too many employees aren't asked "What do you think?" and far too many supervisors have been programmed over the years to respond to the question, "How are things going?" with "No problem" or, in the NUMMI plant during its first months of operation, with "Monday."
Kevin's and Molly's and Bill's can be found throughout any workforce. But all too often their knowledge and creativity haven't been tapped. We can help you release the knowledge and creativity of your Kevin's and Molly's and Bill's and we can do it now.
We have resources your organization can use right now to trigger and stimulate the knowledge and creativity of your Kevin's and Molly's and Bill's and, through the focused application of their ingenuity, to develop work process improvements that will drive results like those I've just cited.
I'd like to talk with you about these resources. You can reach me anytime at 314-303-0612. Let's meet and review the ways in which our resources, including the St. Louis Community College Lean Leadership Certificate program, can be put to work for you. Have a great day and I hope you also enjoy the next podcast in this series entitled, "Okay, we're ready to go Lean, How do we start?"