Abstract

After reading this article, you will learn about the challenges and opportunities in Lean Manufacturing initiatives for manufacturers seeking efficiency improvements. We emphasize the crucial role of Lean consultants and the responsibility of clients for initiative success. The main reason for failure is the client’s passive role and disengagement, which put consultants in challenging positions. The article provides insights for manufacturing executives, highlighting the strategic partnership potential and significant returns on investment from Lean initiatives. You will also learn about client responsibilities, emphasizing the need for direction, executive commitment, active participation, and support. The article concludes by stressing the importance of a committed client in overcoming challenges for sustained success.

In my experience, smart manufacturing executives are always looking for ways to improve efficiency and continuously improve their bottom line. Most manufacturers have embraced one or several improvement methodologies in the past decades—commonly Lean manufacturing. However, according to studies, the success rates for Lean Manufacturing initiatives hover around 24%. Considering that the same study revealed that over 70% of manufacturers are actively engaged in an improvement effort.

Did You Know?

• Success rates for Lean Manufacturing initiatives average around 24%.
• Over 70% of manufacturers are actively engaged in improvement efforts.
• Lean consultants often provide an average ROI close to 500%.
• Average engagement with Lean consultants is worth seven to eight figures in savings, both tangible and intangible.

Key Takeaways

DIMMENSION	TAKEAWAY
Relationship	Recognize Lean consultants as your strategic partners, not just hired hands.
Expectation	Provide clear direaction and expectations early in the initiative,emphasizing quantifiable business outcomes(i.e. higher quality, improved productivity, reduced turnover,etc.).
Commitment	Ensure executive commitment by eliminating the perception of Lean as a program and encouraging the entire executive team to embrace it as a management system.
Participation	Actively praticipate in Lean transformation efforts by attending updates,engaging with employees,and removing obstacles.
Education	Educate the organization on basic Lean priciples without overwhelming them,eliminating misconceptions,and strategically selecting employees to become advocates.
Strategy	Incorporate strategy deployment ealry in the process to align Lean initiatives with business strategy and set key performance indicators reflecting short-and long-tem goals.
Culture	Embed Lean manufacturing in the company culture,formalizing it as a part of the business’s operating system and integrating it into values, human systems(i.e.,screening, hiring, promotion, etc.)and daily rituals(i.e., daily meetings and gemba walks).
Development	Invest in employee development to cultivate leaders with a continous improvement mindsets, dicipline, and consistent results.
Obstacles	Overcome inivitable onstacles, including resistance to change and chnage fatigue, by persisting, maintaining leadership alignment,and balancing short-term gains with long-term sustainability.

In many cases, manufacturers will engage the services of a Lean consultant. While this partnership significantly improves the chances of success, the client still carries significant responsibility for the effort’s success. The lack of understanding of their role and execution, on the client’s part, is the most common reason why these initiatives fail. What ends up happening is that the client takes a passive role and becomes disengaged. This puts the Lean consultant in a tough position because they lead change without authority or support. Meanwhile, employees perceive their leader’s disengagement as a sign that this effort is unimportant and end up brushing it to the side. As time passes, the Lean consultant becomes frustrated, and the client questions the capabilities of the Lean consultant and wonders why the effort never got any traction.

If this sounds like you, understand that my intention is not to judge or point fingers but to create awareness about your role in creating a successful partnership. I encourage you to read this article with a receptive mind and ready to learn some things that will only benefit you and your business.

In this article, I want to help manufacturing executives understand their role in this partnership, hoping to improve success rates.

The Lean Manufacturing Consultant: A Strategic Partner.

Before I get into the client’s role, it’s critical to understand the importance of a Lean Manufacturing Consultant’s role. These professionals bring significant experience and knowledge in implementing Lean Manufacturing principles, facilitating change, and coaching employees on adopting Lean practices. In some engagements, clients see consultants as a pair of hands or merely hired help to perform a menial task. Manufacturing leaders, I’m here to tell you this is a mistake. Consider the impact this partnership could have on your business: Increased capacity, reduced costs, higher profits, faster response rates, and even for you personally: reduced stress, career growth, and recovered time to focus on strategic-level work.

“I want you to consider this briefly and ask yourself: Why would I neglect someone trying to help me solve my problems?”

In most cases, these are not small problems. To give you some perspective, our average engagement is worth seven and often eight figures in savings (tangible and intangible). Our return on investment (ROI) averages close to 500% and often more. Does it make sense to invest in something with that high a return and then ignore it? Of course not!

I respectfully encourage you to see this relationship for what it should be: a strategic partnership.

The Key to a Successful Partnership: Client’s Key Responsibilities.

1. Provide Direction and Clarify Expectations

This should happen early in the initiative. The senior leader must clearly articulate the direction he/she wants to take the organization and their expectations for the team. Everyone must understand their role and what is expected of them.  Additionally, the leader must emphasize the importance of the consultant’s role and how everyone should welcome his/her ideas and recommendations.

“I often see leaders overlook one small but very important detail; they fail to articulate their objectives as quantifiable business outcomes.”

We always strive to have clients articulate their objectives as follows: “Objective: [Verb] from [current state] to [future state] by [desired date] (i.e., Reduce rework costs from 9% of sales to 1% of sales by EOQ3). This ensures complete clarity, high ownership, and urgency and facilitates accountability.

2. Executive Commitment

I often hear Lean Manufacturing referred to as a program. This couldn’t be further from the truth. To be successful, the entire executive team must embrace Lean Manufacturing as a management system we are implementing to run the business more efficiently and profitably. Leading by example will send a clear message to the organization that this is not a fad and that we’re fully supporting this effort, especially when it comes to embracing change and actively working on removing obstacles, whether process, resources, or people-related.

“As the senior leader, you must confront and demand your executive leadership’s full support and commitment.”

Read this article we wrote that describes the consequences of implementing Lean without commitment.

3. Active Participation

Lean transformation success is amplified when leaders become active participants in the effort. The senior leader can participate in many ways: Attending project updates, being present during daily huddles, engaging in conversations with employees, providing guidance, and listening.

4. Providing Support

A Lean Manufacturing implementation requires support. This support can be resources, removing obstacles, time, and allocating personnel to participate in improvement activities. Many manufacturers fail to provide this support, and employees become frustrated and disengage from the process.

Setting Yourself Up for Success: Preparing for Lean Transformation

1. Educating the Organization

I wouldn’t recommend embarking on an extensive and deep training initiative. The most appropriate approach here is educational training on the basic Lean principles and practices. Avoid giving people so much information that they become overwhelmed and discouraged.

“Ensure you address misconceptions such as “Lean is about cutting jobs” or “Lean is for management or the shopfloor only.””

Be strategic in who you educate; you’re looking for employees who will embrace the lessons and become advocates of your vision. Read this article on five forms of ROI from teaching employees Lean Manufacturing principles.

2. Assemble a Steering Committee

I recommend the senior executive select his/her direct reports, the executive team, to oversee the Lean implementation effort.

“When this responsibility is delegated down, my experience is that it loses the perception of being a top priority for the organization.”

You have a much more focused effort if you maintain it as a shared responsibility and the executive is accountable. Always strive to incorporate the strategy deployment aspect of the process so the executive can actively decide where to focus improvement efforts.

3. Establishing the Baseline

One of the first steps to improvement is to understand where you are today. In a Lean Transformation, this is accomplished through completing a value stream mapping exercise. Ensure you involve a cross-functional team of leaders, managers, and workers. This process is designed to uncover opportunities for improvement within the business, including manufacturing operations and supply chain processes. We often complement this exercise by conducting a separate session focusing on the business’s back-office functions (i.e., HR, Engineering, Accounting, Quality, Customer Service, etc.)

 

The Lean Implementation: A Never-Ending Journey

1. Implementation Activities

During a Lean implementation, a long list of improvement activities will be identified. Some will be a simple task (Just-Do-It), a project (A3), or a focused rapid improvement event (kaizen events) where a cross-functional team will tackle a constraint from root cause analysis, solution development, and implementation in a very short period of time (3-5 days for execution).

“All of these are opportunities to develop your employees, identify future leaders, tap into your workforce’s talent and creativity, and reap the benefits of accelerated improvement.”

Ensure you seize every opportunity to engage as many people as you can. Create company-wide visibility for the progress of the projects to improve ownership and accountability. Also, genuinely ask questions to the folks engaged to uncover any obstacles and reduce their frustration.

Watch this video to learn guidelines for leading a Lean Manufacturing transformation:

2. Incorporating Strategy Deployment

As a management system, lean manufacturing provides a robust process for helping manufacturing executives realize their strategic vision.

“Ensure this process is installed early in the implementation so that the connection between business strategy and Lean is not lost.”

As part of this process, the client and the executive team should collaborate on identifying the business’s key performance indicators that reflect a balance between short- and long-term focus. The executive team should see Lean as a lever for enabling business strategy. For instance, if you are expanding to a new market and setting up a new manufacturing plant. There should be a plan to ensure the plant is set up as efficiently as possible using Lean principles. Finally, the annual strategic planning process should provide the direction for improvement activity and ensure there is a business case for every resource allocated. The cyclical nature of this process should maintain the focus on continuous improvement year after year. One word of caution here is to choose your strategic initiatives commensurate with your resources. In our experience, 3-5 strategic initiatives are plenty for most organizations. Be sure to make them challenging or lofty enough to force your team to make significant improvements rather than small tweaks to the business. Read this article to learn five ways strategy deployment helps improve your manufacturing business.

3. Lean Daily Management

In collaboration with the Lean consultant, the client should identify and assign leaders for each value stream. Once identified, these leaders must be trained in Lean Daily Management practices. The value stream managers will work with their teams, using visual management boards and the PDCA methodology, to manage and improve performance through daily smaller and incremental countermeasures. Similarly to the strategy deployment process, the client, the value stream leaders, and the consultant should collaborate on identifying the best KPIs and targets for the area that align with the business’s strategic goals. Once implemented, these practices should become mainstays to be expected from any subsequent leader.

Making it Stick: Sustainment Responsibilities

1. Embed the Management System in the Company Culture

Lean manufacturing should be formalized as part of the operating system of the business, should also be visible in the companies’ values, human systems (recruiting, hiring, onboarding, performance management, recognition, etc.), and observable in daily business rituals (Gemba walks, monthly reviews, employee awards, etc.).

“The client must push for this level of formality; in our experience, practices that are left to memory will only last as long as the advocates are motivated to enforce them or exit the organization.”

2. Investing in Employee Development

Ensure you are developing leaders who embody the spirit of continuous improvement, engage their teams, have the discipline to follow structured approaches and deliver consistent results. Creating a steady flow of high-potential leaders does not happen without a concerted effort to coach, mentor, and train leaders early in their careers. This is one of those long-term aspects of the client’s role. The returns may not be immediate, but the effort is worth it.

Read this article to learn some tips about sustaining your improvements.

Finding Success in the Face of Challenges: Overcoming Inevitable Obstacles

1. Overcoming Resistance and Change Fatigue

Expect resistance to change and be prepared to persist. Start by helping people understand why we are pursuing this strategy, what’s in it for them, and the benefits for the business and everyone involved. Listen to people, empathize, and validate their concerns. However, do not waver from your commitment. Be mindful of how much change your organization can absorb at one time, consider your current situation, plan on adjusting the pace of your efforts accordingly, and proactively anticipate ways to provide additional support to make the transition more manageable.

“Never accept pausing or stopping your efforts altogether.”

Be mindful that this suggestion often comes up as a solution to being too busy or not busy enough. Be ready to respond by saying, “This is exactly why we need this; our busy season becomes chaotic,” and “Slow times are the best times to work on improvement; this will help us be prepared for the busy season.”

Watch this video to learn ways to get buy-in from your team:

2. Ensure Leadership Alignment

The senior leader must ensure the executive team is fully behind the effort. Tread lightly in this arena;

“The higher the leader, the less time they should be given to buy in. This is one of the most important roles for the client; if you tolerate passive-aggressive or resisting behaviors, the effort will suffer.”

Remember, these leaders have the highest level of influence in the organization. I tell clients that if we have a leader resisting, even if it’s someone you respect and you’ve worked with for a long time, we must be able to overcome this.

3. Balancing Short-Term Gains with Long-Term Sustainability

Avoid falling prey to a short-term mentality. Quick fixes highlight this and are counter to sustainable solutions. The client should provide guidance considering short-term improvements but never sacrificing long-term goals. For instance, focusing solely on cost reduction and neglecting to invest in people development is a common occurrence. Additionally, long-term successful efforts often take a long time and require patience. Manage your own expectations and those of your team to avoid falling prey to becoming impatient and throwing in the towel.

Case Study: Lean Transformation of a Manufacturing Business

We worked with a manufacturing client struggling with low on-time deliveries, high inventory, high employee turnover, excessive equipment downtime, and a dysfunctional culture.

The client recognized they needed help, searched for a Lean Consultant, and asked us to help them turn around the business. We quickly educated the client on their role.

We completed a value stream map and developed an improvement. We then trained leaders in Lean principles and leadership skills.

We helped the client identify and develop a set of metrics to understand performance at a deeper level; we also helped install a process for reviewing performance and developing countermeasures regularly.

We quickly noticed a team member as the primary source of dysfunction. This was a highly regarded employee by the senior leader; we made him aware of the problem. After providing ample opportunity, this leader was removed from his role, and most of the dysfunction went with him.

The business also had high unplanned equipment downtime. We worked with the maintenance team to develop and implement an improvement plan for equipment maintenance.

Finally, we engaged the front-line leaders in leadership and Lean management training. We gave this group the tools to improve their operations management skills.

Among the results we helped this client achieve are:

• Improved on-time delivery by 58%.
• Reduced customer complaints by 53%.
• Reduced internal scrap by 69%.

The main reason this engagement was successful is because the owner was committed. I told him from the beginning that you needed to remain committed because we’ll rock the boat, and your people will resist. I know it was tough for him, but he persisted, and today, his business is much more profitable and stable. Another lesson worth sharing is that we helped implement company-wide incentives for the business’s collective performance. This slowly but surely created a sense of peer accountability and teamwork because people understood that everyone needed to perform for everyone to be successful.

Conclusion: Success Comes from a Strong Partnership

When engaging in a Lean transformation, I recommend you understand your role and act proactively, and when engaging a Lean Consultant, treat the relationship as a strategic partnership. The client’s embracement of this line of thinking is the single most important success factor in a Lean Transformation. The client should also muster the courage to overcome the abovementioned challenges and have tough conversations with those resisting. Finally, the client must have the psychological stamina to endure criticism, resistance, doubts, constant change, and adaptation.

Ensure you are clear on your objective and be crystal clear with your team that embracing these principles is not an option.

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