Special Workshop with Art Byrne and Jim Womack!
Learn with two lean legends at the Lean Transformation Summit. Join Jim Womack and Art Byrne on Friday, March 15, for a hands-on workshop for senior leaders who want to create action plans for tackling their toughest lean transformation challenges. Read more about this special session.
The biggest, and most common, mistake that I see companies make is thinking that they can somehow move to a lean strategy while preserving a traditional organizational structure. This can happen only if you are okay with pretending to be lean. If you want to truly be lean and get all the benefits available from this, you can’t maintain your traditional structure.
Let me give you some examples. Lean strategy calls for making products (or providing services, as the case may be) in a one-piece flow, as this provides the best quality, lowest cost, and fastest response to the customer. Your current structure, however, has functional departments based on equipment type if you are a manufacturer, or based on some narrow skill set if you are a service company.
The only way to change to one-piece flow is to bust up the functional silos. In addition, the move to lean requires a pull system where you can connect the customer demand directly to the shop floor, thus drastically cutting lead times.
The traditional approach, on the other hand, uses a material resource planning (MRP 1) system and a forecasting system to push production through to the shelf in the hope that someone will buy it. This is true for distributors and retailers as well as for manufacturing companies.
Service companies don’t necessarily use MRP, but they often have some sort of batch process (like entering everything into the computer) that takes place before they release their incoming demand to the first functional silo. Push systems and pull systems are exactly opposite. In addition, in the traditional organization, the way we sell things, develop new products, and even do the accounting are all almost exactly opposite from the way we want to do the same things with lean.
Leading Lean Change
This notion that “everything has to change” is a big hurdle for most CEOs to get over. It’s one of the reasons that so few organizations have made the lean transformation. At the heart of a lean turnaround, you are really trying to transform your people. Lean requires that people change their thinking, including their most basic instincts about how to organize work. The more seniority and status a person has, the harder he will be to change. You can’t just one day say, “OK, everyone: now you have to change the way you think about how work is done” and have it happen. This approach will go nowhere. You have to lead the change.
Here’s a powerful idea for making this happen: recognize that switching to lean requires both the organization and the people to change. You can use one as a lever for the other. In other words, to change the people, change their environment. Remind yourself that structure drives behavior. So, get your people out of their silos as quickly as possible. I recommend doing this before the first kaizen (we did it that way at Wiremold, and it worked very well). Even if the restructuring is only on paper at first, make sure that everyone knows what is coming so that there are no surprises.
What to Do Next …
Download more excerpts from Art Byrne’s book The Lean Turnaround to keep learning from his 30 years of accumulated lean implementation experience.
