Lean Daily Management: How Manufacturers Increase Operational Execution & Profitability.
After reading this article, you will learn about the leadership gap in middle management within manufacturing and the resulting challenges, such as poor execution, customer complaints, and lower profitability. You will also learn how Lean Daily Management enables your team to break free from operational challenges and facilitate profitable growth. The essence of Lean Daily Management involves a shift from reactive to proactive management, emphasizing anticipation of issues and root cause elimination. I also share the pillars of Lean Daily Management, the components, and the mechanics of a successful implementation. I also share challenges to expect so you can prepare accordingly. Finally, we share a Lean Daily Management success story from a medical device manufacturer to display the methodology’s impact on execution and profitability.
Did You Know?
- Manufacturing leaders spend between 30-50% of their time fighting fires.
- Poor leadership is attributed to 32% of an organization’s voluntary turnover.
- Two in five Americans rate their boss as “bad.”
|Leadership Gap Impact
|Many manufacturers face challenges such as poor execution, customer complaints, and lower profitability due to a leadership gap in middle management. This gap can lead to reactive management, missed commitments, and a lack of solutions to recurring problems.
|Lean Daily Management represents a shift in management approach from reactive to proactive. Instead of waiting for problems to occur, leaders, using this methodology, anticipate issues, address root causes, and prevent problems from escalating. This approach emphasizes continuous improvement and problem-solving.
|Repetition & Standardization
|Emphasis on standardizing processes and daily routines.
|Successful implementation depends on active leadership participation in daily meetings and the demonstration of commitment to fostering a culture of continuous improvement.
|Shifts from a functional reporting structure to a direct reporting structure to a value stream manager, promoting agility in resolving abnormalities.
|Training and Education
|Employees need education on how the Lean Daily Management system works, the metrics used, the purpose of daily meetings, and their role in improving performance.
|Key Performance Indicators (KPIs)
|Establishing KPIs focused on safety, quality, delivery, cost, and people, driving daily behaviors and decisions.
Almost every manufacturer I interact with is chasing precision, efficiency, and continuous improvement in some shape or form. Do you know what else they have in common? Most have a leadership gap in their middle management. So what? Well, when you have a leadership gap in middle management, you need to be ready to deal with:
- Poor execution
- Being dragged down into the weeds
- Explaining missed commitments to customers
- Customer complaints
- Listening to excuses but no solutions
- Lower profitability
- Watching people firefighting all day long
You get my drift. I decided to write this article to give manufacturing executives an understanding of a methodology, Lean Daily Management, to help their business get out of the hamster wheel and get ready to grow profitably.
1: The Essence of Lean Daily Management
1.1 Understanding the Core Concept
Lean Daily Management, at its core, is a fundamental change in how leaders manage their operations. Instead of watching and waiting for problems, a reactive way of management, leaders anticipate issues, drive to root causes, and eradicate issues before they become too severe, a proactive way of management. How can we see the difference? In a reactive environment, leaders’ days are spent chasing orders; they don’t know their factory or department metrics, and the same problems repeatedly come back. In a proactive environment, leaders spend their days problem-solving and function using metrics, and you don’t repeatedly see the same problems.
1.2 The Pillars of Lean Daily Management
The Lean Daily Management pillars include:
- Visibility and Awareness: Daily team meetings create visibility and awareness of results for all KPIs, trends over time, reasons for issues, identified countermeasures, countermeasure owners, target completion dates, and status.
- Accountability: Each team member has clear responsibilities to the team, which fosters accountability.
- Problem-Solving: Part of the daily team meetings is dedicated to identifying and addressing issues. This creates a culture of proactive problem-solving.
- Continuous Improvement: The meetings are structured around the Plan, Do, Check, Act (PDCA) continuous improvement cycle.
- Repetition & Standardization: The team’s focus on standardizing their day and processes becomes more pronounced.
2: The Mechanics of Lean Daily Management
2.1 Daily Team Meeting Structure
Lean Daily Management typically involves a daily meeting to focus on continuous improvement. The typical agenda includes:
- Review of Key Metrics: Teams discuss performance against key metrics, emphasizing visual displays for quick understanding.
- Problem Identification: Team members share any challenges or obstacles faced, focusing on immediate problem-solving.
- Action Items: Action items are developed to address issues, and owners are assigned for resolution.
- Reflection and Feedback: A brief reflection on the previous day’s performance and feedback for continuous improvement.
2.2 Visual Management
Visual management is a cornerstone of Lean Daily Management. Several standard practices include Production Control Boards to understand performance by time interval or production unit and visual Controls that rapidly convey information visually (i.e., status, product, inventory levels, procedures, quality criteria, etc.) so leaders can detect abnormalities.
2.3 Standardized Work
Standardized work is the development and documentation of reliable and consistent processes. In Lean Daily Management, standardized work ensures that daily meetings follow a structured format, enabling efficiency, consistency, and the establishment of a baseline for continuous improvement.
2.4 Gemba Walks
The Gemba, or the actual place where work is done, is a focal point in Lean Daily Management. Regular Gemba walks involve leaders and team members physically visiting the workplace to observe processes, ask questions, and gain insights.
“The idea here is to show respect for the people who do the work by supporting them and removing the obstacles they find every day.”
This hands-on approach fosters a deeper understanding of the work and encourages continuous improvement at the source.
3: How to Implement Lean Daily Management in Manufacturing
3.1 Leadership Commitment
The successful implementation of Lean Daily Management hinges on leadership commitment. Leaders must actively participate in daily team meetings, demonstrate the importance of the practice, and use it as a tool for fostering a culture of continuous improvement.
“When leadership is committed, teams are more likely to embrace the daily rhythm.”
Read this article we wrote that describes the consequences of implementing Lean without commitment.
Watch this video to learn guidelines for leading a Lean Manufacturing transformation:
3.2 Team Structure
The team structure is one of the most critical changes in Lean Daily Management. Instead of having leads, supervisors, quality, planners, engineers, and purchasers report to functional leaders, Lean Daily Management takes the team of operations professionals just mentioned and has them report directly to a value stream manager.
“The thinking behind this structure is to remove functional walls and red tape, allowing the team to become more agile at resolving abnormalities.”
3.3 Training and Education
Embracing Lean Daily Management requires training and education for your employees. The topics the team should be educated on include how the system works, the metrics used, the purpose of daily meetings, and their role in improving performance. This knowledge will give them the tools and the mindset to be successful.
Read this article to learn more about 5 Ways of ROI for Training Employees on Lean Manufacturing Principles.
3.4 Establishing Key Performance Indicators (KPIs)
This is one of the most important steps because it will drive the team’s daily behavior. Using KPI’s the team will assess how they did against their targets, what went well, identify trends, and decide where to focus their efforts. The KPIs should fall under the categories of safety, quality, delivery, cost, and people. The results for these metrics are the focus of daily meetings.
Read this Infographic to learn about recommended key performance indicators for manufacturers.
3.5 Visual management / SQDC boards and Technology
Visual management / SQDC boards are a critical tool for facilitating daily meetings for the teams. The visual management / SQDC boards will contain a visual representation of the target and results for all metrics, trends, and action item tracking. Most companies assign an owner for each board and often delegate the updating of the metrics to a team member. These boards can be updated manually by each owner or auto-generated by a visual tool such as MS Excel, Tableau, or Power BI.
“I recommend you keep charts and calculations simple; that way, we can benefit from the power of manual charts.”
Studies show that when we create manual charts, we remember things better because we process the information on a deeper level. The reason is that we process this information in three ways: visually, kinesthetically, and semantically. Furthermore, drawing requires a mental interpretation of the information and then translating it into a visual form.
Watch this video, where I explain how a visual management board is covered during a daily meeting:
3.6 Shared ownership
Once you have established KPIs, you are ready to take the next step, which is to give the team shared responsibility for the results. This is a major departure from having each functional role have separate and often conflicting goals.
“In Lean Daily Management, everyone is accountable for the same goals”
For instance, Quality is no longer the quality department’s only goal; they also become accountable to other metrics such as on-time deliveries, efficiency, etc. This will make sure everyone is supporting each other because they are pulling in the same direction.
3.7 Incorporating Gemba Walks
Gemba walks are a good way to understand what is happening on the floor and connect with the people doing the work.
“The goal is to empathize, show respect, collaborate, and support those who add value most directly to the product.”
The Gemba walk typically happens right after the visual management / SQDC boards are reviewed. The team, depending on size, may go to one or several areas to engage the employees, understand their challenges, and collaborate on solutions.
4: Overcoming Challenges in Lean Daily Management
4.1 Resistance to Daily Meetings
Often team members push back on the idea of having daily meetings. Employees previously unexposed to this methodology will see these meetings as disruptive to their day and time-consuming. In other words, they see it as an additional task they need to complete. Overcome this by explaining that these meetings are the way we work and the value of having them is they foster problem-solving, collaboration, continuous improvement, team alignment, and accountability.
Watch this video to learn ways to get buy-in from your team:
4.2 Lack of Follow-Through on Action Items
Lack of follow-through on action items is the worst thing for Lean Daily Management. Work with your team to develop a process for documenting, assigning, and tracking progress and completion for every action item. Part of the daily meeting’s agenda should be to cover action item status to create visibility and accountability.
“Encourage team members to support and hold each other accountable when struggling to complete action items.”
4.3 Lack of Training and Understanding
When team members lack understanding or have not been properly trained in Lean Daily Management, there is a big chance they will question its value. Ensure training that emphasizes the purpose of these practices and the benefits for them, such as faster resolutions to their problems; also, hands-on coaching so they learn how to execute the process and are active participants.
4.4 No Visual Displays
When visual displays such as visual management / SQDC boards are missing, the process is severely diminished. These tools provide a platform for transparency, accountability, and collaboration. I recommend you designate a meeting location for daily meetings for each department and invest in boards or displays that are inviting and provide ample space to have productive discussions.
When Lean Daily Management has been in place for some time, teams become complacent in some cases. Team members start to skip daily meetings; action items drag on without resolution, progress, or updates. Some team members begin to question the process or suggest reducing the frequency.
“This is when you, as the leader, have to raise the expectations and stick to your guns in holding daily meetings.”
Watch this video to learn more about the difference between a traditional leader and a Lean leader:
5: Change Management Considerations for Lean Daily Management
5.1 Enabling Open Communication and Transparency
When rolling out Lean Daily Management, make sure the team understands that this is not about judging anyone on their results but about finding solutions to our everyday problems. This will happen if we openly share our challenges, make recommendations, and are present and engaged in daily discussions.
5.2 Building Trust and Collaboration
The Lean Daily Management process forces the team to rely on each other to bring issues and take ownership of action items that will bring solutions. Emphasize that we must learn to trust each other with these responsibilities and to be accountable for actions and deadlines. The team must also let go of the functional structure that creates silos and embrace the new structure that embraces shared goals.
5.3 Recognizing and Celebrating Success
“I have observed manufacturers that only focus on missed targets and often neglect and ignore them when the team gets a win. This can be very deflating to the team.”
Make sure you are a cheerleader for the team, and even on small wins, show them you noticed and that you care. Complement them on their efforts and help them create a sense of pride and accomplishment.
5.4 Empowering Teams
Teams adopting the Lean Daily Management process can often take time to embrace it. Assure them that they have your full support and trust. Let them know that they are part of this team because of their abilities and potential. Give them the mindset that they should be functioning as if they are managing a business within the business. Another way to put it is that they are responsible for running the business and improving the business.
Read this article to learn more about encouraging your team to make improvements.
6: Lean Daily Management Success Story
6.1 Lean Daily Management at a Medical Device Manufacturer
We implemented Lean Daily Management at a Medical Device Manufacturer. We had metrics at each area for safety and quality, delivery, cost, and employee. We assembled a team of production managers, manufacturing engineers, maintenance, and quality to discuss daily results.
We then moved on to the warehouse, where we developed metrics for inventory accuracy, shipment errors, supplier performance, and on-time shipments.
Finally, we implemented plant-level metrics for safety, quality, inventory, purchasing, and new product development. Lean daily management was key in reducing equipment downtime, and quality defects, improved on-time deliveries, inventory reduction, and employee cross-training.
Conclusion: Lean Daily Management is critical for improved Execution and Profitability in Manufacturing.
I tell clients that to have good years; we need good quarters; to have good quarters, we need good months, and so on, until we get to the smallest increment, which usually is hours or produced units.
“The most powerful lever manufacturers have to affect their execution is the discipline to identify and eliminate the daily challenges they find.”
I always say that I’ve never walked into a manufacturing business that doesn’t have any problems, and this is the reason there should always be a place for Lean Daily Management in manufacturing.
Lean daily management should not be a choice or a practice for some manufacturers. I feel is so fundamental and critical that every manufacturer should embrace this practice. Remember, this is not a process you implement and abandon; this is a practice that becomes how you conduct business going forward until you find a better way.