To find out how lean can be leveraged across an organization, MA Senior Editor Stephanie Neil e-mailed with John Shook, a senior adviser to the nonprofit Lean Enterprise Institute, where he writes a weekly column, “Lean Management.” Shook learned about lean management while working for Toyota for nearly 11 years, helping it transfer production, engineering, and management systems from Japan to North America. His most recent book is Managing to Learn: Using the A3 management process to solve problems, gain agreement, mentor, and lead.
Q: What is the state of lean in the manufacturing community?
A: Many manufacturers have adopted or at least tried to implement lean in their direct production operations. Fewer have adopted lean thinking in critical areas, such as engineering, R&D, sales and marketing, or support functions, such as finance, IT, or human resources. Companies that have not yet adopted lean thinking in those areas tend to struggle eventually. Companies that embrace lean thinking throughout are showing progress even in these tough times.
Q: What are the top three business drivers influencing the adoption of lean programs?
A: Of course, cost pressures tend to be the first driver to send a company to explore adopting a lean program. Another common path comes when customers suggest or even require their supplier companies to adopt lean. Especially over the past year or two, companies with cash flow as a key driver have flocked to explore adopting lean, since lean companies always see immediate and usually dramatic benefit in terms of cash flow.
Finally, more mature companies have leveraged current economic rough seas to return to basics and seek longer-term business objectives, rejecting short-term roller-coasters of quick growth followed by bankruptcy. Many companies are turning to lean thinking as a means of providing long-term, steady prosperity. More and more companies are turning to lean as a vehicle for deep and long-lasting change in their corporate culture.
Q: Which technology and applications make the most sense to complement lean initiatives?
A: Many applications can fit, but the key here is to apply applications after waste has been identified and removed from a process. Otherwise, technology is automating waste, such as steps that shouldn’t be in the process. For example, ERP systems can help a large company coordinate areas such as HR and supply chain operations, but lean companies will still rely on pull to schedule the shop floor, rather than ERP’s push model.
Q: Are there risks associated with lean?
A: The biggest risk associated with lean is that senior management will not understand the true, deep nature of the transformation involved. Allowing lean to be seen as just another program of the month leads to disillusionment among the parts of the company that adopted it. From a purely business performance standpoint, lean provides an extraordinarily risk-free approach to sustainable success.