QUESTION: We are starting discussions about trying to start a lean initiative and are in disagreement about what is the actual number of experts we would need before we embark on such a journey. Somebody told us that it should be about 1% of total plant workers; for example for every 100 people, then 1 lean expert. I know this depends a lot on the type of plant and products we have, but management wants to know how much this would cost (probably a bad sign). Any suggestions?
ANSWER: The questions raised here provide important insights into the company.
- Apparently there is no top-down strategy that specifies achieving and sustaining excellence as one of the top three priorities for the business.
- The discussions about how many experts are needed and what they will cost are decisions that come after there’s a compelling operational strategy in place with an eye on the long term. As the reader recognized, this is a bad sign.
- The resources required for technical competency and for project managers assigned the top priority projects are already being viewed as an expense instead of as critical assets. Their cost per year should be de minimis compared to the improvements they will deliver. In many companies, these costs will be a rounding error on the income statement.
- Companies that start their journey with this kind thinking from the company’s leaders will fail.
The first step should be for the senior leaders to get themselves educated about the commitment that’s required before launching what is supposed to be a career-long commitment to achieve and sustain excellence. Certainly they should put their XL-sized ears on and listen to the people a couple of levels down to get their input. They may also need to seek some outside assistance with education and training before they are willing to make this commitment. Otherwise the folks at lower levels will have to cope with getting whatever improvements they can get with whatever modest funding they can count on.
This scenario is so common. When I do my workshops around the country and discuss the major barriers to change, one of the top three responses from attendees is always the lack of understanding and support from the top. This is obviously very frustrating, as well as limiting to what can actually be accomplished in the arena. These kinds of initiatives are DOA.
Step One: Quantify What You Want to Accomplish
As for the other questions by this reader, this is my experience. Trying to nail down exactly the number of resources is sometimes more art than science. It depends so much on whether or not the operation already has competent project managers, i.e. a lean/Six Sigma black belt, a green belt, etc. It also depends on the quantification of the opportunities for improvement and what skills are required to slay the largest dragons. So step one is to quantify what it is you want to accomplish for the next two to three years based on the size of improvement goals.
When deciding on the number of these scarce resources that is required, 1% of the labor force is commonly used but I’ve found 1.5% to 2.0% has much more impact if managed properly. If the calculations come out to include a fractional person I always rounded up. Why? Because every company has turnover and major improvement commitments are easily compromised if one of your key resources leaves. These jobs also are often filled by engineers who have good upside and are striving to sit down in a manager’s chair.
And finally, the major reason as I stated earlier, is that the right people’s cost will be a rounding error on the income statement compared to the value they add on productivity. They are assets not liabilities.
My experience also is that every operation (assuming sufficient size) should have a lean/Six Sigma black belt on staff. As you pick the low-hanging fruit you’ll get into more difficult process improvement projects that require the special skills of a black belt, e.g. process capability studies, design of experiments, regression analysis, etc.
Further, your certified black belt is a capable trainer of green belts for your internal needs now and in the future. For very small operations, you may opt to have a green belt on site and outsource a black belt when you need the more sophisticated tools; or, if you’re in a small plant with a large business, perhaps there’s a shared resource you can tap into.
Finally, the ratio I found to work very well over the years is a 3 to 1 ratio of the number of green belts to black belts. In the corporate world I kept a small cadre of black belts on staff whose job it was to support the small plants who couldn’t afford their own as well as to lead major corporate projects.
Larry Fast is founder and president of Pathways to Manufacturing Excellence and a veteran of 35 years in the wire and cable industry. He is the author of "The 12 Principles of Manufacturing Excellence: A Leader's Guide to Achieving and Sustaining Excellence." A second edition is planned for release in 2015. As Belden’s VP of manufacturing Fast led a transformation of Belden plants in the late '80s and early '90s that included cellularizing about 80% of the company’s equipment around common products and routing, and the use of what is now know as lean tools. Fast is retired from General Cable Corp., which he joined in 1997. As General Cable's senior vice president of operations, Fast launched a manufacturing excellence strategy in 1999. Since the launch of the strategy, there have been 34 General Cable IndustryWeek “Best Plants Finalist awards, including 12 IW Best Plants winners. Fast holds a bachelor's degree in management and administration from Indiana University and is a graduate from Earlham College’s Institute for Executive Growth. He also completed the program for management development at the Harvard University School of Business.