For many manufacturers, driving lean techniques throughout the organization is a lot like trying to push a large rock up a steep slope. But it doesn't have to be that hard. Manufacturers can succeed with lean -- if management gets its act together.
Toyota Motor Manufacturing Kentucky Inc.'s (Georgetown, KY) commitment to lean thinking goes far beyond manufacturing processes. Take the cafeteria, for example. The day's offerings are displayed in a glass case at the front so you can immediately see what looks good. The checkout lines are unusually speedy with few bottlenecks. After you eat, photos posted above recycling bins show exactly what type of waste goes where. If you hesitate, one of the 7,800 employees at the 7.5 million sq. ft. facility is sure to step in and help you get it right.
This cafeteria functions better than most because Toyota workers and managers have mapped out all the food-related processes, identifying and eliminating the ones that do not add value. This continuous refinement of a value stream is called kaizen in lean parlance. "I've seen them doing kaizens in the cafeteria," says Parker Shannon, project manager for manufacturing at Toyota's Georgetown location. "It's just part of our philosophy. We apply lean thinking to everything."
Toyota Motor Corp. (Toyota City, Japan) pioneered modern lean manufacturing beginning in the 1940s. "Toyota introduced a much more sophisticated way of thinking about processes," says Jim Womack, founder and president of the Lean Enterprise Institute, a lean-oriented nonprofit training, publishing and research center. "They believe the number one job of management is not to sustain a process, but to improve it." Womack is the author of numerous books on lean thinking.
Dating back to the 1970s, the famed Toyota Production System (TPS) specifies the way Toyota produces vehicles to provide the best quality, lowest cost, shortest lead time and least waste. Though $163 billion Toyota is ranked fourth in U.S. car and truck sales, it is by far the most profitable auto maker, with 2004 net earnings more than double the combined net earnings of General Motors, Ford Motor Co., DaimlerChrysler and Honda.
Toyota clearly enjoys the benefits of employing lean practices in every aspect of its operations. Running lean helps it withstand the pressures that nearly every manufacturer labors under -- namely, intense global competition and the need to do more with less. But lean has been slow to catch on in manufacturing in general. Companies start lean initiatives only to abandon them once another paradigm or strategy comes on the scene. Public companies face pressure for short-term cost reductions. Staying the lean course requires more intestinal fortitude than most companies can muster.
"Few companies attempt lean, and those that do struggle to make any significant improvement," says Art Smalley, an advisor to the Lean Enterprise Institute and one of the first Americans to work at Toyota in Japan. A variety of factors are holding back lean's progress in manufacturing, particularly among U.S. companies.
1. Lack of top-management commitment
Aligning practices around lean thinking requires massive cultural change. As such, it must be led and driven from the top of the corporation. "Senior management has to drive the adoption of lean. You don't become lean just by applying a bunch of techniques. You adopt it as a way of thinking. Part of good leadership is evolving a universally adopted lean value system. Without it, the real potential of lean will never be realized," says Mike Donovan, president and CEO of R. Michael Donovan & Co., a lean consulting firm.
The lack of commitment is not just the fault of short-sighted managers. Public companies are under such pressure to produce financial results that it is nearly impossible to get the breathing room necessary to nurture a lean environment. "There's so much pressure for profits on a quarterly basis. CEOs keep looking for quick fixes, and lean isn't a quick fix," says Pam Lopker, president of ERP software vendor QAD Inc. (Carpinteria, CA).
Anne Mulcahy, CEO of Xerox Corp. (Stamford, CT), by contrast, has been leading the lean charge at the $15.7 billion office technology maker for several years now. "When leadership drives it, everyone aligns around lean," says Bill Steenburgh, senior vice president of Xerox Services.