by Larry Rubrich
Measurements are powerful aids in your Lean journey. You can only improve those things you measure, but too many measurements, or measures that are used incorrectly, will turn that power against your Lean efforts.
When organizations start the journey to become World Class (the Lean journey), everyone, especially management, gets all excited about the opportunity Lean presents to improve the morale and culture, to solve problems, and make improvements.
Unfortunately, this excitement flys in the face of the fact that all organizations have hundreds of problems and processes that need to be improved. Combine this with a group of supervisors and managers who all have different agendas and ideas of what should be fixed or improved, and you end up 15-20, or more, Key Performance Indicators (KPIs) in most areas of the organization.
For most associates in these organizations, who are just now being exposed to an empowering environment and the accountability that comes with it, this is empowerment, accountability, and information overload.
Since the associates cannot solve all problems at once, the initial excitement over Lean is exchanged for frustration and improvement paralysis. The organization's Leadership Team is frustrated because a lot of money was spent on starting the Lean implementation and it appears to have produced few results. The results as viewed by the Leadership Team are actually less than what actually has been achieved. This is because the Leadership Team views the results by their impact on the "system," bottom line, or the organization's goals. Since there is no common improvement agenda, many of the improvements are "spot" or departmental improvements which may result in no system improvement.
The net result is everyone blames the Lean process as being much less powerful than advertised.
Here is why Policy Deployment and Lean Implementation Planning is the most powerful Lean activity any organization can accomplish!
It starts with the Leadership Team choosing 3-5 organization goals for the upcoming fiscal year (one of these is always safety). These goals, in general, are targeted at what the organization needs to look like 3 to 5 to 7 years in the future so the organization will be competitive and growing. These goals set the Lean improvement agenda. In general, there are no Lean activities allowed that do not support these goals.
Next, the Leadership Team, along with as many other members of the organization as possible, brainstorm ideas to achieve the goals. Using normal brainstorming rules, a list of improvement ideas is developed.
After the ideas are prioritized, a Lean Implementation Plan is developed. This plan lays out who is responsible and accountable for the idea implementation and its timing.
It should be noted that the actual measurement for the deployed Lean improvement ideas will vary by areas of the organization. For example, if one of the organizational goals is to improve profitability, the deployed idea (from the brainstormed list) supporting this in accounting may be to reduce the days to "close" the financials from 5 days to 1 day. Their measurement sheet would chart "days/close." In maintenance, their deployed idea, supporting improving profitability, may be to reduce unplanned equipment downtime. Their measurement sheet would chart "% or minutes of unplanned downtime per day." For the office order entry cell, their deployed idea may be to reduce order entry lead-time. Their chart tracks "days or minutes of lead-time.
Some additional thoughts on measurements:
- Do not measure anything you do not plan on doing something about
- Do not use measurements as a weapon to beat up another person or department
- Operational and administrative measures are cascaded down from the top level organization goals using Policy Deployment. The top level organizational goals are generally financial.
- Most people in the organization would not know how to deal with a financial goal such as improving Cash Flow, but they may know how to manage inventory levels if given the opportunity
- Most people in the organization would not know how to deal with Operating Income, but they may know how to improve up-time on their machines if given the opportunity
Remember, no improvement team should ever meet without a clear and concise goal that is linked to the goals of the organization.
Put the proper measurements and goals in place and then empower your people. People are naturally goal oriented and they generally like a challenge. They will achieve these goals if you let them.