Lean Management, Lean Manufacturing or Lean Leadership?

Tim Akerman
Tim Akerman
Categories:   Leadership   Lean   Process Improvement  
Consulting

Wherever you look in the world of Lean, people are talking about Lean Manufacturing. Lean manufacturing is going to revolutionise your business, even if you don’t manufacture anything, all you must do is apply the tools and you will see improvement. Is it really that simple? Did Toyota just wake up one day and say we will apply these tools and everything will be brilliant, or is there a little more to it?

Anyone who thinks it is just about the tools really hasn’t heard the lean message. You see, Lean is not a set of tools or just about the application of certain techniques, it is an approach to business and way of thinking that is very different to the normal thought processes present in modern business. Given that so many businesses are trying to replicate the work done by Toyota, it is worth taking a few minutes to consider how Toyota apply the concepts that are known as Lean in western manufacturing.

The original work on manufacturing as a process was done by Henry Ford when he moved the product through the production steps instead of moving the process steps to the product, and became the blueprint for automotive manufacturing. At the end of the second world war Ohno Taiichi was tasked by the head of the Toyoda family with changing the manufacturing basis of Toyota from weaving looms to car manufacturing. It was recognised that the existing automotive model of high stock would not work for Toyota, hence Taiichi was tasked with developing a manufacturing process that could deliver the variety of features required without holding massive stock levels. One aspect of this that is often missed is that Ohno Taiichi was tasked with creating a uniquely Japanese model of manufacturing.

This is entirely consistent with the aims of the Meiji restoration, where the Japanese industrial revolution sought to adopt modern thinking, technology and methods that were aligned with Japanese values. In the author’s opinion, this is a vital consideration when trying to understand the Toyota phenomenon. At the end of the second world war, the Japanese had to rebuild their manufacturing base and industrial experts including Deming, Juran and Fiegenbaum went to Japan to help restore their economy, all at the time that Toyota were looking to develop their manufacturing process. This amounts to a powerful opportunity with unprecedented drive for change.

In 2001 Fujio Cho was president of Toyota and he launched ‘The Toyota Way’, which built on the previous work and created a clear structure to explain the concepts and provide a framework for success.

The five core values employed by The Toyota Way are as follows

1. Challenge : to maintain a long term vision and strive to meet all challenges with the courage and creativity needed to realise that vision

2. Kaizen : to strive for continuous improvement. As no process can ever be declared perfect, there is always room for improvement.

3. Genchi Genbutsu : to go to the source to find the facts to make correct decisions, build consensus and achieve goals

4. Respect : to make every effort to understand others, accepts responsibility and does its best to build mutual trust

5. Teamwork : to share opportunities for development and maximise individual and team performance

Is this lean manufacturing? It doesn’t sound like it to me, it sounds more like a management philosophy than a set of process tools, so perhaps we should be thinking more about management than simply manufacturing. The Toyota Way seeks to deploy the thinking well beyond manufacturing, applying the thinking to the whole organisation.

Taking a moment to consider the implications of these values we find that there are certain elements that must be recognised for Toyota’s success to be replicated.

Toyota are looking at a long-term goal with long-term planning. That doesn’t mean that short term needs are ignored, just that there is a difference between short-term or tactical activities and the long-term strategic changes that must be made. Throughout the organisation there is a recognition that long-term improvements are of higher value than short term benefits.

Similarly, there is a focus on continuous improvement of all processes, however the prioritisation of projects is based on a rational assessment of the business needs. The focus of Kaizen is to recognise the opportunity for improvement at both the tactical and strategic level, embracing new ways of thinking and working to achieve long-term benefit for the business.

going to see the problem at source, to find the facts to enable correct decisions to be made. It has been suggested that lean does not encompass systems thinking, however I believe it is clear from the first three values that systems thinking must be at work to enable the values to blend effectively.

Respect is an interesting topic. To whom should we show respect? It seems that often respect is confused with ill-discipline. I disagree with that view, lean teaches respect for the individual, for the supply chain including both customers and suppliers, governmental bodies, and the communities within which we work and live. If someone’s performance is unacceptable, you show them respect by telling them of the fact, not by ignoring their behaviour.

Teamwork does not mean silo behaviour. Teamwork means all aspects of the organisation collaborating to deliver the customer’s needs. I use the word collaborating deliberately. Co-operation results in each party yielding the minimum it can to gain agreement from another party to enable its needs to be delivered. In co-operation, I win you lose. Collaboration on the other hand requires all parties to be open with their needs and then for the team to work together to deliver as many of those requirements as possible.

Spear and Bowen proposed the 4 rules of the Toyota Production System in their Harvard Business Review Article.

Rule 1 : All work shall be highly specified as to content, sequence, timing, and outcome.

Rule 2 : Every customer-supplier connection must be direct, and there must be an unambiguous yes-or-no way to send requests and receive responses

Rule 3 : The pathway for every product and service must be simple and direct

Rule 4 : Any improvement must be made in accordance with the scientific method under the guidance of a teacher, at the lowest possible level of the organisation.

Now we are starting to see the errors in western implementation. Too often organisations seek to implement so called lean to achieve a reduction in costs and headcount, without a long-term vision of what the organisation wants to achieve.

Organisations then seek to implement lean exactly as the Japanese have done, without recognising the cultural differences, much less addressing them in line with long-term objectives.

The approach is reduced to the application of a series of disconnected tools without a coherent strategy for learning and developing knowledge.

The consequence is a confused piecemeal implementation with no coherent strategy. When this fails, the organisation will often blame the employees who have been diligently trying to implement a series of tools without a recognisable framework or set of common goals. Competition and conflict are commonplace in this environment and everyone strives to deliver disparate objectives and sometimes conflicting requirements all with short-term goals and often under immense pressure to succeed.

There is also intolerance of failure, and no recognition that lean aims to fail better next time rather than to be perfect next time. Implementations are often required in under two years to achieve that which Toyota have taken 50 years to achieve and are still working on.

Six sigma is treated as a different discipline to lean, with its origins in Motorola. It is worth noting Spear and Bowen’s rule 4 above. You cannot implement lean without embracing the scientific method. Scientific method requires data and evidence, to demonstrate improvement there must be clear evidence of a change, to clearly evidence a change one must employ statistical methods to demonstrate a significant change. Why then is there so much animosity between lean and six sigma? They are different approaches to the same objective. Scientific method also requires recognition of the system within which the process operates.

Lean manufacturing then, would seem to be a recipe for disaster, lean management is a vast improvement, however to achieve the most significant benefits from a lean deployment it is necessary to use lean leadership to succeed. Lean leadership also needs to recognise that the culture of both the organisation and the wider society within which it operates is relevant to how lean is developed, implemented and managed. Are you developing a lean implementation which is based on uniquely Japanese cultural values, or are you developing a lean implementation based on the relevant social values for your organisation and location?

In summary, the message for lean leadership seems to be don’t try to copy. Instead, understand the principles upon which Toyota succeeded and adapt them to your social, cultural and business situation. Understand your long-term vision for your organisation, then develop the strategies and make choices that are rigorously aligned with your strategy. Then you have a chance of succeeding if you stay true to your principles and work very hard at adapting the principles to your application.

As Deming has said, you don’t have to change, survival is not compulsory.