The success of an organization’s lean strategy depends on thorough planning, a commitment to the process and engaged leadership.
Lean is by necessity a holistic enterprise—it affects the entire organization. That’s why it’s crucial to use a systematic, step-by-step approach to planning the effort in order to achieve operational excellence.
Regardless of industry, lean planning consists of three fundamental steps:
- Getting management buy-in
- Assessing the current state
- Building an action plan
Each of these phases comes with specific challenges that may vary from industry to industry, yet retain common themes. Here we will expand on some of the commonly faced obstacles you will likely encounter in each step.
Getting management buy-in
Without a doubt, operational excellence is a worthwhile undertaking, but it can be met with skepticism. The first challenge you may face is company management’s hesitation to approve such the initiative for a number of reasons. Some common reasons include:
1. Historical failures
Chances are some type of process improvement initiative has been attempted in the past. It was most likely a small-scale effort that failed to realize the expected company-wide gains resulting in lean being deemed “more trouble than it is worth.” That’s because true operational excellence cannot be isolated to a single area of the organization— instead, it comes through efficient performance and interaction on all fronts. But with historical failure new endeavors are often extremely difficult to get off the ground.
By taking a holistic approach to lean implementation, you ensure that your organizational goals are tightly connected to your improvement projects and ‘baked’ into daily work thus eliminating the potential for working on the wrong projects or creating pockets of excellence which don’t help the organization to achieve its objectives.
2. Initial cost
Leaders are concerned chiefly with the bottom line, and rightfully so. Any initiative that requires a substantial initial investment in time, training or financial cost will be met with skepticism. Let’s remember, leaders have to balance investor satisfaction with long-term benefits. While operational excellence yields positive results fiscally and operationally when implemented correctly, it does come with a cost that can intimidate those looking for short-term or immediate results.
By using your organization’s own data, it is possible to glean a decent estimate of the cost-benefit from your lean implementation. Ultimately, by translating conceptual ideas into hard figures, lean advocates will overcome this initial challenge.
“Lean management is a top-down effort”
3. Lack of commitment
Operational excellence isn’t something leaders can simply put on autopilot—they must be actively engaged with the implementation from the get-go. More importantly, they have to continue that leadership until the new processes and behaviors are entrenched across the business. Some leaders are present for the rollout phase but lose interest or motivation to see it through to the end. Leaders need to create a “pull” culture—to build a case for change and be the leaders for that change. Lean management is a top-down effort.
Understanding the up-front and continual commitment necessary to make the effort a success coupled with the hard figures showing ROI and a timeline for achieving returns, will set a solid foundation for your initiative and help secure buy-in for the effort.
Assessing the current state
Any company considering a lean strategy needs to be able to examine its weaknesses objectively. To do so, it needs to ask itself the hard questions:
What kind of problems do we need to solve?
It can be difficult to recognize internal or operational flaws—ideally, if you know your problems, you address them. Leaders and management might approach this question by first identifying their goals and then listing the obstacles that keep them from getting there. It’s also important to call out areas of the business that are suspect to inefficiency—sometimes entire processes must be eliminated, merged or fundamentally changed.
“Operational excellence is holistic.”
Do we have the right people on board?
One of the hardest elements of change management has to do with the people. Lean is all about building capabilities. Remember, an effective lean strategy is defined by capabilities developed and deployed. Build people, then build process. Some things to consider when evaluating whether you have the right people would be:
- Do they share the leader’s vision?
- Do they understand the necessity for disciplined routines?
- Are they good “teachers”?
Again, operational excellence is holistic—everyone has to be pulling in the same direction and committed to achieving sustained improvement.
Can our infrastructure support this kind of change?
The bigger the organization, the more difficult it can be to implement a lean strategy. But that doesn’t mean it won’t work—it simply requires management to rethink their infrastructure. Key to continuous improvement is finding ways to bring people closer to managing their own work. That can be at odds with organizational hierarchy, but if company architecture is hampering productivity, leaders should consider how that can be remedied. Big or small, organizations are human inventions—we designed them so we can change them.
Lean strategy requires a willingness to embrace change—which, in turn, calls for a clearheaded assessment of the company’s current state. When an organization is deeply entrenched in a certain way of doing things, it takes disciplined leadership, and maybe even outside counsel, to bring about meaningful change.
Building an action plan
When management is on board and the organization has a good understanding of current state, it’s time to build an action plan to close identified gaps. Here, the industry, company size and other organizationally specific factors will play a major role in how to proceed, but there are common threads that every organization should consider.
“Getting started is the hardest part.”
The first steps
Getting started is the hardest part—and the period during which management will be most tempted to cut its losses and drop the initiative. Change is hard, so it’s important that leaders set the proper expectations, establish interim milestones, focus on long-term results and, as we noted earlier, continue to lead for the duration of the implementation.
Management should measure the success of their lean implementation by comparing key measurements from before, during and after the rollout, bearing in mind the necessary adjustment period. Again, leaders need to guard against the expectation for immediate results, or even demonstrating quarterly growth for their shareholders. The charting of your lean implementation will likely resemble a J-curve: a dip in earnings or productivity at the onset of the strategy with a multifold return on investment over time.
Operational excellence is different from other organizational goals in that there isn’t really an “end” to the strategy. The implementation continuously seeks to build capabilities and more efficient and productive processes wherein new challenges and obstacles are handled through the lean method and not through a legacy response. It’s an entire shift in behavior.
Achieving lean or operational excellence is a challenging process. Understanding those challenges in the planning stage will help you to remain focused and steadfast in the face of the obstacles you will encounter. Lean is a worthwhile endeavor, but it is not necessarily an easy one. If leadership is able to understand the significant value proposition inherent in becoming Lean and recognize the obstacles within their organization, then they’ll find they have both the incentive and the tools necessary to launch a successful lean rollout.
Ask The Consultants
How do we know when we are ready for Autonomous Maintenance Step 4?
Q: We’ve been implementing Autonomous Maintenance steps 1-3 for the past nine months and are thinking about expanding the effort to include Step 4. How do we know if we are ready?
A: It’s not a secret that any Continuous Improvement effort is 80% Change Management and 20% toolkits. Autonomous Maintenance is at the core of Change Management as it touches the biggest population in any plant. It’s like a mass movement.
With Autonomous Maintenance, we are attempting to influence “button pushers” to become “process owners”, which drives equipment ownership and teamwork so the improvements made are sustainable.
The first 3 steps of Autonomous Maintenance not only carry the bulk of this turnaround effort but also deliver the majority of the initial value proposition. It is the “low hanging fruit”. So, how do you know when your AM program is mature enough for you to incorporate Step 4? Well, a successful AM Step 3 initiative must deliver as much as 50-60% reduction in unplanned downtime, micro stops and waste. There should be evidence of standard work and shift to shift consistency in output. Maintenance should no longer be spending the bulk of their day firefighting, and operators should be operating equipment, not clearing jams or making adjustments. With successful implementation of Autonomous Maintenance Steps 1-3, employee engagement scores are typically through the roof and should be expected to fall within the top quartile of the industry subset!!
Those who have embarked and succeeded in the implementation of AM Step 3 will testify that its execution is very hard work but necessary for sustainability. ~90% of such efforts fail to fully reach Step 3’s true spirit in its entirety. One reason is the effort is not given the time it needs to mature.
Ensuring that both the social and technical metrics for Step 3 are well thought out and executed is key to success. A state of stable and predictable operations combined with highly engaged employees then provides fertile ground for more mature steps of Autonomous Maintenance.