Next Generation Lean: Lean Processes Need to Continuously Improve

Oct. 9, 2016
Lean needs to expand beyond its current emphasis on waste elimination to one of total business performance.

Over the years I have presented at a fair number of industry-related events. In 2010 I spoke about manufacturing effectiveness to an audience of several dozen small- to medium-sized manufacturers who were part of a Department of Defense-sponsored supply chain initiative I was managing. I began my talk by asking two questions. The first was, “How many of you have conducted Lean activities within your operation?”

All but a few of the audience raised their hands.

The second was, “How many of you who just raised your hands are satisfied with their impact?”

Only a few hands went up.

I’ve seen this type of response a lot. Sure, there are a slew of articles touting highly successful Lean transformations, but overall my impression is that the vast majority of manufacturers who have tried Lean have been underwhelmed by the results. In talking to managers of the firms present at this specific event I heard a common refrain along the lines that “Lean over-promises and under-delivers.”

But again, there are many valid success stories about Lean positively transforming companies. How can this disconnect between successful Lean transformations and disappointment in Lean impacts be explained? And from a national economic development point-of-view, wouldn’t you expect that with all of the money and manpower invested in Lean over the last two decades, the efficiency of U.S. manufacturing would be more of a competitive advantage than it is?

I’ve discussed this disconnect issue with several well-established Lean consultants, i.e., the ones responsible for some of those big-time success stories. In doing so I’ve found that even bringing it up with them elicited a significant defensive reaction along the lines of “there’s nothing wrong with Lean.” Once we got through those initial emotions, though, they acknowledged the disconnect and offered what I consider a pretty a good explanation about what causes it, as follows.

A lot of Lean consultants really aren’t up-to-the-task of managing comprehensive business transformations. In other words, there are two classes of Lean practitioner—expert and all-the-rest—and only those from the former category are capable of consistently delivering Lean impact to their organizations while those from the latter tend to deliver Lean as a series of unrelated, individual activities. When asked what the practitioner ratio was between the two categories, the answers gravitated along the lines of 10:1—ten all-the-rest for every one expert.

(By the way, the guys I’ve talked to don’t give much credit to the various Lean practitioner certifications, feeling that a certificate alone doesn’t assure that its holders possess the manufacturing savvy necessary to effectively manage Lean implementations.)

Even when conducted by expert Lean practitioners, the percentage of successful business transformations isn’t very high, coming in at about 50%. They clarify this point by explaining that in process—in other words, during the actual conduct of an ongoing project—many clients back away from their original multi-year financial and resource commitment. When I ask “Why?” their explanation is that the critical mass of Lean impact needed to justify the client investment rarely accumulates until towards the end of the entire project. For instance, while 5S might be the right thing to do early on in a Lean transformation, it will be difficult to tie completed 5S projects to improved bottom-line performance. So companies, in essence, “blink” when they don’t see quantifiable improvements to their financial exhibits in the early- to mid-stages of a transformation.

These two points ring true to me. I’ve observed many Lean practitioners—working with suppliers I was responsible for managing—who, while they may have mastered the necessary Lean “book learning,” had what otherwise would be considered a very shallow understanding of manufacturing. As a consequence, most of these projects did not have meaningful impact.

In addition—having been an executive—I can vouch that there are not many U.S. manufacturing managers who seem to be willing to stick-out-their-necks in support of initiatives that won’t deliver respectable short- and/or (at least) medium-term ROIs. Why? Because their performance metrics are short- and/or medium-term and most people I know are NOT in the habit of making career impacting decisions based on leaps-of-faith, i.e., having to wait until the end of a project to see if an investment was indeed a good one.

Back when I was heavily involved in Supplier Development I gave a lot of thought to the Lean impact disconnect. Here are my conclusions. First, I believe that Lean thinking is sound, at least as far as it goes. Second, I believe that Lean needs to evolve to address issues like the two outlined above. Specifically, I am convinced that for Lean to remain relevant as a strategy for improving manufacturing effectiveness it needs to evolve to the point where expert practitioners are NOT needed for most typical Lean transformations. Lean shouldn’t be a mystery or black art that is only successfully conducted by an elite group of practitioners. For this to happen, additional Lean concepts, strategies, metrics, processes and tools need to be developed.

Early Lean activity impact on executive-level metrics needs to be easier to quantify. To facilitate this, the focus of Lean needs to expand beyond its current emphasis on waste elimination to one of total business performance, i.e., revenue.

Unfortunately, except for some tweaking around the edges, Lean has seen little fundamental change since its initial launch. For instance, Value Stream Mapping remains the primary Lean tool employed by practitioners today, yet it was first introduced almost two decades ago. And though there have been many additions to the original Learning-to-See approach first defined by Rother and Shook, they have been marginal such that the tool remains fundamentally unchanged. Given the Lean impact disconnect we’ve identified in this article, wouldn’t it seem reasonable for Lean practitioners to have been experimenting with and developing more such tools? This point raises the question, “Why has Lean failed to evolve?” Another story may help shed light on this.

In 2012 I had the opportunity to present what I referred to as a Next Generation Lean Supply Chain Performance continuous improvement program to a group of supply management executives at a Standard & Poor’s 100 original equipment manufacturer (OEM). The proposal was received by them with extreme interest to the point that I was asked to repeat the same presentation at the company’s annual Lean Leadership Conference—which just so happened to be meeting that week at the same company facility I had just presented at! When my first Next Generation Lean overhead went up with the company’s Lean Leadership Group the atmosphere in the room immediately became noticeably cooler! Frigid, in fact. The audience response was initially very defensive, along the lines of,

“There’s no need for a Next Generation—the current practice of Lean is in and of itself entirely sufficient!”

Through the detail of my presentation I was able to eventually dissipate much of this emotion and later, consulted with the OEM on a very successful three-year Next Generation Lean Supplier Development pilot.

Note: The results from this pilot actually came to the attention of the U.S. Department of Commerce and, as a result, representatives from my OEM client were invited as primary presenters at a White House Supply Chain Innovation Round Table in July 2015. In addition, the OEM initiated changes in its Supplier Development process to incorporate the key lessons learned through the pilot.

Unfortunately, defensive responses to change from current practitioners of Lean are normal, almost to the point that a basic tenet of a religious faith is being questioned! This is difficult to understand. Every strategy and practice—manufacturing or not—needs to evolve over time to stay relevant. There is no such thing as a final answer when it comes to manufacturing improvement. Rather than resisting change, today’s Lean practitioners should be building upon the good work of the previous generation of practitioners to enhance Lean’s impacts by complementing and supplementing—not replacing—existing practice. This would further solidify—not undercut—Lean as a primary manufacturing improvement technique.

The next several articles will focus on flushing out the detail of what I have learned relative to concepts, strategies, metrics, processes and tools that will improve—and simplify—the practice of Lean. And likely, I will also have to use those columns to respond to feedback from current Lean practitioners to what I’ve written here!

About the Author

Paul Ericksen | Executive Level Consultant; IndustryWeek Supply Chain Advisor

Paul D. Ericksen has 40 years of experience in industry, primarily in supply management at two large original equipment manufacturers. At the second he was chief procurement officer. He then went on to head up a large multi-year supply chain flexibility initiative funded by the U.S. Department of Defense. He presently is an executive level consultant in both manufacturing and supply chain, counting Fortune 100 companies among his clientele. His articles on supply management issues have been published in Industrial Engineering, APICS, Purchasing Today, Target and other periodicals. 

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