Whether we are aware of it or not we live our lives, at work and at play, at different levels of consciousness. In the workplace, we graduate through 4 different levels of conscious lean management, at increasing levels of benefit to the organisation and its stakeholders, towards full lean enlightenment.
- Basic: The Lean Operations level
The operational level is concerned with the physical development, building and delivering products and services to our customers. It involves handling, storing and accounting for these goods and services. For many employees this is their primary day to day concern i.e. how effectively they manage the operational element of the business.
Many lean programmes start from the bottom up, and are concerned with improving processes at this level. Indeed, senior managers who may have a limited understanding of the lean approach to organisation management, often insist on a pilot project or proof of concept at the operational level. The advantage of running a lean programme at the operational level is that improvements in process performance can be readily seen, measured and understood by the sponsoring managers. The disadvantage is that outcomes are often confined to a series of relatively small areas e.g. the shop floor or an office. The benefit to the organization as a whole may plateau within a couple of years, if lean initiatives focus on the operational processes only. Many times, I have heard continuous improvement personnel complaining that they have addressed all the ‘low hanging fruit’ and are at a loss on where to progress to next.
2. Intermediate: The Lean Systems Level
The systems level is concerned with the interconnectedness of various operational activities, some of which are outside the four walls of the organization. For lean leaders working at the systems level, their concern is to improve systems performance in order to benefit the organization and its partners. Systems often involve external commercial and legal parties, such as suppliers, regulators and customers.
A good example of lean systems thinking is supply chain systems management. The manner whereby customers co-design with manufacturing companies; configure their own products and services; influence sales through feedback on social media outlets, and receive goods and services, will continue to evolve at a rapid pace. The former supply chain make-store-sell-move model is becoming increasingly redundant. Those who think of supply chain management at the operational level i.e. the physical handling and movement of goods and services, are doomed to be left behind.
In order to consider supply chain management at a system level, a lean organization will start with a concept of delivery service to the customer e.g. ‘We will deliver any product, to any customer, within a 10-day lead time’. After that the organization engages with its upstream and downstream partners to design a supply chain system that will most effectively deliver to that goal. By a supply chain system, I mean the model that will be used to achieve the goal e.g. design-to-order, build-to-order, build-to-stock and configure-to-order etc. On our lean journey, we are most concerned that we are flexible, responsive and reliable in our delivery service to our customer, and that we consistently meet our commitments. Increasingly, organisations compete, not on the basis of quality, but on the ability to delivery to the customer what he wants, how he wants it and when he wants it.
The advantage of running a lean programme at the system level is that the benefits, over time, cover a wider area, deliver higher level improvements, and help to enhance organisation productivity and competitiveness. Because of their scope, system improvements take longer and therefore provide a roadmap of improvement activities for those involved in continuous improvement. The approach deepens relationships with partners, establishing heretofore unthought of interdependencies that benefit all. It is a win-win arrangement of ideas and information system integration.
- Advanced: The Concept Level
It was Henry Ford’s ambition to make the motorcar affordable for the ordinary American. Thus, the concept of affordability was translated, in 1913, into the physical mass production of Model T Ford cars. His innovation reduced the time it took to build a car from more than 12 hours to two hours and 30 minutes. Lean organisations operating at the concept level are dedicated to developing the creative power of their employees and research partners. Lean organisations will regularly and relentlessly seek best practice outside their own organisation, even in unrelated sectors. They seek to understand how the concept of a smart design in one sector, can be adapted to benefit themselves, their customers and the community at large.
In a lean organisation, all levels of employees are engaged in contributing imaginative improvement ideas on a regular basis. At a micro level within the organisation, this is manifested in a dynamic 5S programme. During regular scheduled 5S meetings, teams of employees in each department or area are allowed the space and freedom to innovate in terms of area layout, fixture and tool design and process re-engineering. This lean 5S adventure in continuous improvement is a far cry from the pale imitation 5S programme that consist of a tidy work place with accompanying audit checklist. Such programmes often have the effect, after an initial flurry of change, of maintaining everything exactly as it as it is, forever.
The advantage incorporating the development of innovative capacity into the lean programme, is that organisation will, over time, develop unique products, services, and delivery methods that provide advantages to customers relative to the competition’s offerings. Some of these may be game changers, and bring about a complete technical and infrastructural revision in how products and services are designed and delivered to the customer.
- Pinnacle: The Ethos Level
The ethos level is concerned with guiding principles or values of the organization. We are all used to, and support, organization values such as equality of opportunity, parity of reward and recognition, and respect for diversity. Increasingly, organization guiding principles are broadening to include how the organization serves the customer, the community and the planet. At the Toyota Motor Company, which manufactures in 27 countries worldwide, the 2nd of their 7 guiding principles states “Respect the culture and customs of every country and region, and contribute to economic and social development through corporate activities in their respective communities.’ Since 1992, the Toyota Motors UK Charitable Trust, through the social contributions programme, has donated over £6.3 million to many local charities and organisations.
Senior management team members lead by example in implementing and living the principles on a daily basis. I deliberately cite the practice of leading by example, because if those at the helm do not live the principles, then they are not worth the extensive rage of posters and marketing give-aways they are written on.
When it comes under stress from market conditions such as new entrants, new technology or new legislation, the guiding principles provide a compass for the organization, If the organization can get it principles right in terms of service to the customer, employees and the community, then it is more likely that the management team will make the right decisions in terms of adjusting to changing market conditions, no matter how dramatic.
In an ideal world, the lean journey of an organization starts with the development of its concepts for products and services, and their translation into practical delivery to customers. The organization ethos is ideally defined and expressed as a set of principles or values, before it starts trading. We do not often think of lean as having any connection with these activities, however they are at the heart of the development of a lean organization. An organization founded on lean principles will from the get go, as Toyota espouses ‘foster a corporate culture that enhances both individual creativity and the value of teamwork’. If these higher levels of lean consciousness are not present, then the organization will struggle to maintain any gains earned at the operational and systems levels.
If you have any thoughts on the content of this blog, or have any contributing comments or useful examples to share, I would be very pleased to read them or to hear from you.