Lean Lessons

A look at the current state of lean manufacturing in North America—or maybe that should be a look at the lack of lean...

Section I: In which we learn that when it comes to lean manufacturing, a greater number talk the talk than walk the walk. If they're out of breath, it's the talking, not the walking.

"Two percent".

Not very much in any estimation of the number of facilities doing something.

Two out of 100. Almost trivial.

Two percent.

That's the number of plants that Jeff Liker thinks can be defined as "lean."

As in exhibiting the activities that are done on an on-going basis at Toyota plants. The Toyota Production System (TPS) is the touchstone of lean so far as Liker is concerned.

Two percent?

I'd be willing to bet that the top manufacturing people at the companies formally known as the Big Three would be aghast at such a figure: haven't they all been spending years "getting" lean? Does rhetoric trump reality?

"Yes."

That's Liker's simple response. He adds, "I'm not sure why they're kidding themselves. They've all been through Toyota and Toyota supplier plants. They've all seen a good example of lean someplace or another. It's not like they don't understand what lean is."

Understanding notwithstanding, it surely sounds better to proclaim one's operations to be lean than to be otherwise. That's probably why there may be some self-fooling.

Liker says that he's often called upon to take people from industry on tours of lean facilities. "If I can come up with a dozen plants in Michigan, I'm doing well," he explains. When pressed—after all, there are lots of factories in Michigan—he admits that maybe he could get up to 20 or 30 plants—but he also admits that he doesn't know where these plants are.

 

Becoming Lean Book
Although Jeff Liker didn't write the book on becoming lean...he edited it.

First, it is worthwhile to get a brief description of what Liker defines as "lean," lest you begin to think that he is a man with completely unrealistic expectations of what it is really all about (Two percent!). I ask him to pare it down to the essence, the proverbial 25 words: "Reducing the timeline from customer order to building and delivering a product by eliminating waste." As you can see, Liker does it in 15 words. No waste. And although it isn't included in his pithy definition, he suggests that this is the movement of good quality parts, not a situation where there is low inventory (a characteristic of lean) yet bad product being produced.

Liker points out that he's talking lean in the context of plants, of production operations, which may seem somewhat limited, given the wide range of automotive activities, but he points out that by and large, "I don't think we've seriously gotten as far as lean enterprises."

Second, it is worthwhile to get an understanding of who this guy is, given that he's making such an outrageous claim (outrageous if you don't believe him...more outrageous if you do). Liker is professor of Industrial and Operations Engineering and director of the Japan Technology Management Program at the University of Michigan. Arguably, his job is to know about things, and one of the things he's decided to concentrate his gray matter on is lean manufacturing. Liker edited Becoming Lean: Inside Stories of U.S. Manufacturers (Productivity Press), a compendium of articles by people who have been there and done that on the factory floor. Liker is the recipient of several Shingo Prizes, named after Shigeo Shingo, a legendary Japanese industrial engineer whose work gave rise to many of the elements that are part of TPS. Finally, he is the director and senior consultant at Optiprise, a consultancy dedicated to helping companies get lean.

Section II: In which a simple method for determining the level of lean is explained. (Hint: Take a walk)

While there may be more sophisticated ways of performing a lean assessment (or, perhaps based on the perspective of the two percent it is more properly considered a "fat assessment"), Liker says, "The best single measure is to follow a piece of material from the start, through the manufacturing processes, through the assembly, into a product, then ready for delivery to the customer: see how long it takes, how much of the time it is being processed and how much time it's just sitting around waiting." Although some people have followed material from mining to a store shelf (e.g., in Lean Thinking by Womack and Jones), Liker adds to his statement about tracking: "This is done inside the four walls of the plant." The factory is the place that he thinks people in organizations should concentrate their efforts.

Section III: In which the busyness of business inhibited lean and why there is, perhaps, a reason why the two percent will multiply.

So what happened? Or, perhaps more appropriately stated, What didn't happen? The Toyota Production System has been around for 50 years (and as lean thinkers at Ford Motor have often pointed out, back in 1914 Henry Ford was essentially the original lean thinker [and the people who developed TPS do credit Henry, too]). It hasn't exactly been a secret. And it's not like people in North America haven't been almost inundated with things lean.

Liker provides an analogy as he diagnoses a reason for why there is a dearth of lean operations: a funnel into which massive amounts of lean training, consulting, tools, concepts, speeches, seminars, books, magazine articles... have been poured: a veritable Niagara of lean know-how.

 

Yet what comes out the spout is but a tiny trickle.

What gets implemented is very little: maybe two percent.

Why? Well, up until the end of 2000, the time, energy, effort, and initiative necessary to make the changes on the factory floor have been otherwise applied. "Everyone was busy. Everyone was trying to get product out the door at a frenetic pace. Changing, transforming, and improving had a lower priority," Liker suggests.

In addition to which, there has tended to be what might be described as a "cherry-picking" mentality: using a method or two—teams, preventive maintenance, design of experiments, statistical quality control—or transforming a limited area within a plant. When people at the firms doing that did benchmarking against Toyota, they discovered that Toyota continued to have the advantage. That's because, Liker says, "The Toyota Production System is a total, holistic system of manufacturing." It isn't a piece-meal approach.

Liker is somewhat optimistic that things will improve, that the percentage of lean operations will increase. The reason why is simple: there are more and more people exposed to the Toyota Production System. People who have worked for Toyota in the U.S. have moved on to other places. There are people who have worked at the GM-Toyota NUMMI plant. There are numerous people who have worked at supplier companies to Toyota. People who have been trained at the Toyota Supplier Support Center. Consultants who have specialized in lean, probably having worked with one of the aforementioned. ("The closer you get to Toyota," Liker says, "the more likely you'll see real lean.")

 

Second Wind

Jeff Liker is a believer in people—or trends—catching second winds. For example, he thinks that auto is going to become leaner (or that some companies will finally start working to become lean) thanks to a cadre of individuals who have been associated with Toyota in some way and who are now in various companies throughout industry. They will have an effect in these other places.

When Liker talks lean, he means in the factory. But what of other parts of the organization?

In 1997, a book co-authored by Liker and Mitchell Fleischer was published: Concurrent Engineering Effectiveness: Integrating Product Development Across Organizations (Hanser Gardner; Cincinnati; 506 pp; $49.95). The book is among the most comprehensive guides to and analyses of the why and how of integrated product development. It reviews a variety of methods used at numerous companies—automotive and non—and provides a recommended approach for those who are interested in such things as improving quality and reducing time to market, engineering changes, warranty costs, scrap, and late deliveries. (And if your organizations isn't interested in all that, then it is hard to imagine that you have any customers...or that you are in business.)

Given when the book was written, it is not surprising that the platform teams of Chrysler Corp.—which were certainly most effective—are held up as an example of a best practice. Given the current situation of the Chrysler Group, it could be argued that perhaps some of the best practices have gone out of practice there.

Liker says that now may be the time when people need to kick up their concurrent engineering efforts—efforts which may have become exhausted...or efforts that were never really initiated back in the day when people were talking about it. Back when CE was the buzz.

With the demand for margin reductions throughout the supply chain and the impatience of consumers with products that aren't appealing or those that spend plenty of time in dealer garages because of recalls, Liker is probably right. It may not be trendy today, but Chapter 11 has been the mode.

Liker believes that with this increase in people that there is a greater likelihood that they'll be in positions to make it happen.

Section IV: In which the time of implementation is both deleted and contracted.

Becoming lean and staying that way takes a long time. As long as 10 years. For many people in industry, their time horizon may stretch as long as next week. So this whole notion of a long time can be troubling. So there is a search for a silver bullet, a quick solution. So they move from one methodology to the next. So nothing really sticks.

The whole concept of "lean" certainly lends itself to being thought of in relation to someone trying to (a) lose weight and (b) keep that lost weight off. There is an unending cascade of diet books and plans, each proclaiming to be the one that permits the most painless, satisfying means of shedding pounds. And so some people go from one plan to another because the only thing that seems to stay constant is the return of excess weight.

Those persons who choose a sensible diet and exercise program and who unstintingly maintain it are the ones who, in the long run, accomplish the weight loss.

And so it is with achieving lean manufacturing.

Even though becoming lean takes a long time, there are a couple of things that need to be understood about the time requirement for implementation. Although many people in North America have short attention spans that lead them to look for the next better way to work, there is another characteristic that Liker thinks leads to an excessive delay when it comes to lean in a working sense. He explains that one counterproductive tendency exhibited is that managers who undertake a lean initiative spend a lot of time—as in years—doing planning, analysis, training, PowerPoint presentations, further planning... such that they don't actually do anything substantial when it comes to becoming lean. He has discovered situations wherein the transition to lean has taken 10 years because the first five were spent doing this preparatory work. (He also points out that one of the ways that lean happens in a plant is when there is a plant manager who really supports the program, and nowadays, not too many people stay in one position for 10 years, so time can't be wasted.)

Liker points out that when a lean sensei comes into a plant and insists that the changeover time for a machine must be cut in half, an answer like, "We can have that done in about six months" is completely unacceptable. The sensei is likely to dismiss that with a "Do it in a day."

Action must happen, pronto. People must see change quickly. Liker says that although he is a sociologist and so might be thought to think otherwise, he believes that the way lean needs to get started is through technical action, not interpersonal consensus. Or, in other words, move the machine in a week, don't worry about performing all of that analysis and PowerPoint creation. Getting lean is an active endeavor.

Section V: In which it is explained that now may be the time to start lean.

Here it is, 2001. The frenetic pace has come to a crawl for many companies (although Liker points out: "I know of a lot of suppliers that are doing great"—those among the two percent).

Many managers are facing exceedingly dire conditions. Shutdowns. Layoffs. Perhaps now is the time for lean? Liker says that there are at least two ways to react: "Companies can take the downturn as an opportunity to improve, to get more competitive, or they can throw everything overboard, cut every cost they can—including the cost associated with improvement."

Let's say that some plant manager faced with the need to cut costs by, oh, 5%, decides that it is time now for the plant to get lean. Now. And so there is a series of radical kaizen events. Things are, in effect, turned upside down. Lines give way to U-shaped cells. Poka-yoke devices are put in place. And so on. There will be some cost benefits gained in the short run by undertaking these activities. But there may be a cost.

Even though Liker is a proponent of action, even though he says that lean is "driven by physical, visible changes," he also stresses, "That's not enough. You can't simply rearrange the furniture and expect the plant to change. You've got to change the culture, too." The people matter. They must be brought along, not force fit. They must accept lean, not have it pushed upon them.

Changing the culture means that lean practices are part of the environment, fundamental to the way things are done. These are places that have an active, effective total productive maintenance program. An effective andon program, or a program for signaling quality problems and immediately solving them. A strong program for standardized work. An effective pull system. There's mistake proofing...

Liker provides a real differentiator between a lean plant and one that is said to be so: "The real tough part: Do they have a culture of continuous improvement?"

You don't change the culture overnight. But you have to start sometime. Perhaps now.