To most of us the term Lean would suggest no

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1 The Lean Enterprise

2 Oliver Wight The Lean Enterprise Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime... Oliver Wight Oliver Wight are leading business improvement specialists who educate, coach and mentor people to lead and sustain change on the journey to business excellence and outstanding business performance. The largest worldwide consultancy of our type, we have offices throughout Europe, North and South America and the Asia Pacific region. Sustainable Business Improvement through Knowledge Transfer Sustainable business improvement can only be delivered by your own people. And we can help by transferring our knowledge to your organisation; knowledge that comes from many years of working with some of the world s best-known companies. +44 (0) @oliverwight-eame.com Oliver Wight EAME LLP The Willows, The Steadings Business Centre, Maisemore, Gloucester GL2 8EY, United Kingdom The Lean Enterprise Les Brookes looks at Lean from a strategic level and shows how to approach implementation across the whole of the business. To most of us the term Lean would suggest no fat or minimum fat. To become lean in business, we must remove fat or waste to leave just those activities that add value to either the external or internal customer. However, understanding what is of value and what is not, and then applying this knowledge to all aspects of a business is difficult. Often the answers do not lie within the grasp of management, but with the people who are closest to the process and better placed to see value and waste. One key lean tool is that of Value Stream Mapping. When used correctly, this tool enables us to create a map of both value and waste within a process and then to understand the waste and its causes before going on to remove it. Whilst value stream mapping is a key tool, it is not just the tools of Lean which need to be understood and used, but the implementation approach and the issues that arise whilst implementing Lean. This can be achieved in a series of five steps. 1 2

3 Les Brookes Managing Partner Oliver Wight 1 Lean Business Philosophy For senior members of an organisation to support a business improvement methodology, there needs to be a vision of what the business will look like after that change. This is no different for Lean but one of the first pitfalls to avoid is jumping onto the Lean bandwagon through fear of being left behind. First, the senior board must grasp what is meant by Lean, where the opportunities and the dangers are, what level of commitment will be required, how the management of the business should support implementation and, finally what the benefits will be. This first step needs to take senior members and key decision makers through the issues in detail, so they gain a good understanding of how to create Lean and this is best done through an action-based learning simulation to give them first-hand experience of the key issues. The purpose of this first step is to: a) decide whether Lean is an approach that can be supported by them and the business b) define a vision of lean for the business c) create an implementation plan d) decide on the key sponsor e) ensure that Lean will deliver the business s strategic objectives f) fully understand the management and culture change that needs to take place in order to deliver a truly Lean business g) assign a budget and analyse the benefits h) create a top level value stream map of the business Then we have to prioritise the implementation. It is often assumed that the biggest area for improvement is in the manufacturing/processing areas but the opposite can be true. As most businesses have been focused on manufacturing for some years, improving the support parts of the process may unlock more potential in manufacturing. Clearly, the vision and plans then need to be communicated to the workforce. 2 Culture and Organisational Change As with all philosophies which require business change, we have to take great care of our most important assets people. With Lean, the people who can most easily get to grips with value-adding and non-value adding activities are the workforce. So we need to adopt a bottom-up approach, which is led and supported by a visionary senior group and facilitated by middle management. The main reason for this is that waste is easier to understand and remove at the point in the process where it is created. Therefore, to make this approach work we need to enable the process operators to work in process-related teams, rather than their current functional ones. To develop Lean correctly, teams should become truly self-directed, so that the people required to solve a problem are defined by the team and not by management. In conjunction, middle management need to become facilitators and motivators to help create the passion and relentlessness required in the pursuit of Lean. There are a couple of other key changes for middle management. The first is to move away from strong functional ownership to ownership of the process. This is essential if we are to unlock the waste, which is a function of the process or which has been caused by the existence of functional boundaries. The second is one of understanding and behaviour. Over years, management has focused improvement activity around the value-adding areas in the process and the people in it. These people are sometimes seen as being responsible for the waste when the reality is that the value-add often represents between one per cent and five per cent of the total process. This approach has led to a poor relationship between the workforce and management with the workforce tending to be wary of change due to feeling victims of it. At this stage it is essential to have a co-ordinated people and teams programme, which runs alongside One of the first pitfalls to avoid is jumping onto the Lean bandwagon through fear of being left behind. 3 4

4 As with all philosophies which require business change, we have to take great care of our most important assets people. the lean activity, and education to ensure all members of staff are correctly coached. This avoids conflict and delivers a management group that can facilitate change with the teams working for them. The people and change programme can be co-ordinated by the HR director at the senior level but should be part of the deliverable learning activity of Lean to ensure that education can be followed directly by application to the work environment. 3 Applying Lean to Your Business This stage is an essential factor in success and involves educating middle management and the change agents in the Lean business philosophy to create an understanding of how Lean can be applied and to re-focus them to move from a hands-on role to a facilitation role. At this stage we begin to deal with the cultural and behavioural issues that exist between management and workforce to encourage management to release some of its ownership. The other key issue for this group is that Lean will cut across functional/departmental boundaries leading to a restructuring of responsibility for the major business processes. 4 Transformation to Lean The transformation process can now begin. We will have set up a steering group, created a vision, selected and trained change agents and middle management, agreed an implementation path, defined the core business processes and identified the process owners, which may have taken away some of the traditional functional responsibility. We are now ready to move onto application and at this stage, we can focus on the higher level issues of People, Education, Support and Approach. We need at this point to form teams of about 12 people, some of whom will come from the process to be used for the initial education and training, with the minority (2) coming from outside of the process. The Oliver Wight Approach is to run an action-based learning event to both educate the team in Lean and how to apply it to a process. The team is asked to create value stream maps of the current process, goals are set and the team creates a new Lean process, an implementation plan and budget. It is important that the education given at this stage is directly applied and, when the team is ready to move forward to the next level of detail, further education on additional tools is given. Support at this stage will come in the form of middle management facilitation, to ensure that the team is able to deliver on time against their implementation plan. The key here is not to take ownership of the plan but to provide conditions in which the team can implement. The aim of this approach is to create a nucleus of people who are trained in the Lean tools and techniques, who have experienced Lean through hands-on application and who can then, with some external support, move on to help others create lean processes by transferring their knowledge. 5 Sustainability Sustainability is a common problem with any business philosophy. Often this comes about as a result of lack of senior commitment, no goal alignment throughout the organisation, lack of understanding and no alignment to strategy. This is why step 1 is of great importance. The words relentless and passion have been used earlier in this article. These words suggest ongoing commitment, desire and pursuit, which are all long term and can only be achieved through behavioural and cultural change to a business where waste is not acceptable to anyone. The other important aspect of sustainability is to have a system for both result-based and process-based performance measurement, including measures for velocity of the overall business process and the individual business processes. Performance monitoring should be encompassed within the sales and operations planning (S&OP) process, which should be being used to drive all aspects of the business at the senior group level. Lean can deliver huge benefits to any business, whether in manufacturing, service, repair or government sectors. Success can be achieved providing the commitment is there at senior level and the company recognises the need for some external support. 5 6

5 Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime... Chinese proverb Sustainable Business Improvement through Knowledge Transfer Sustainable business improvement can only be delivered by your own people. But we can help by transferring our knowledge to your organisation; knowledge that comes from many years of working with some of the world s best-known companies. We will help you define your vision of the future, and educate and inspire your people to drive change throughout your business. It s a proven, integrated approach which delivers results straight to the bottom line. Setting the standard The Oliver Wight Class A Checklist is a comprehensive guide for your journey to business excellence. Call Veronica Jones on