Industry Week magazine reports that 74% of American organizations using Lean as their business improvement process are reporting little or no progress (see chart below). Toyota purportedly says they believe 70% of American companies fail at Lean.
Why? There is one main reason.
First, organizations that fail at Lean see Lean as a set of "waste" elimination tools (5S, for example) instead of a "system" by which they can run and improve their business. These companies jump to the Lean Tools and start doing Kaizen Events based on the tools. While these events can immediately have some success, these successes do not grow and are not even sustainable.
Lean as a system contains four components (one of which is Lean Tools) that must be implemented simultaneously in parallel. These components are shown below.
Lean Planning is the reason we want to implement Lean - to create a safe organization that makes money. We make money because it is the "reward" we receive from customers when we create value for them. We grow our business when we create more value for customers than our competition does.
We create value in our businesses when we find out what types of waste prevents/stops the flow of the "information product" and the "physical product" (Lean Concepts) in our business. We then use the Lean Tools to eliminate the identified waste.
All of these components - Planning, Concepts, and Tools - require a Lean Culture
as the foundation to give the organization guidance on implementing Lean as a system.
Lean Planning includes Policy Deployment. Policy Deployment is the simultaneous deployment of the organization's goals (or policies) throughout the company and their linking with the Lean activities that will achieve those goals. Policy Deployment is not something you do in addition to your current budgeting and strategic planning processes, rather it should be integrated into or replace these current processes.
The 10 step Policy Deployment process is:
1. Establish a Mission and Guiding Principles/Behavioral Expectations
2. Reiterate/Develop Top Level Business Goals (Safety, Operating Income, Cash Flow, Revenue, ROIC, etc.)
3. Team Brainstorm for Opportunities to Achieve Business Goals
4. Define Parameters to Value Opportunities
5. Establish Weighting Requirements, Rate Opportunities, and Prioritize
6. Conduct a Reality Check
7. Develop Lean Implementation Plan
8. Develop Bowling Chart
10. Conducting Monthly Business Reviews
(Note that Steps #4 and #5 are methods to objectively evaluate the brainstormed ideas. Step #6 determines that if the selected brainstormed ideas are implemented, will the Step #2 goals be achieved? Step #8 measures the results of Step #7 and their impact on the Step #2 goals. Step #10 reviews that all activities are on-track.)
More information (available on Amazon):
Policy Deployment and Lean Implementation Planning .... 10 Step Roadmap to Successful Policy Deployment Using Lean as a System
Fayad and Rubrich