LEARN MORE

Zones



Iscar Metals
Standardized Lean

Although there are countless books and even more consultants out there with their own spin on what "Lean" means, SAE International, working with some of the most knowledgeable people in the industry, have developed a standard that provides not only a definition of lean, but tools that can help companies profitably transform their operations for competitve advantage—or survival.

The objective was a simple one: Determine the processes that will most influence the profitability of the automotive industry during the next three to five years. And so, Roy Trent, director, Automotive Manufacturing Initiative, SAE International, explains, an extensive assessment was made starting in February, 1999. Meetings were held with vice presidents of Manufacturing and/or Engineering ofGeneral Motors, Ford, DaimlerChrysler,Toyota, Honda, and Nissan. Experts were consulted.

The conclusion: Lean operation. This is thought to be what can provide the biggest boost to the bottom line of a company.

So then it was a matter of determining what "lean," is, what the best practices are that constitute lean. Here there were an array of sources brought to bear—industry personnel, academicians, SAE research, and published literature. And once those practices were codified, a groups consisting of SAE Best Manufacturing Practices representatives, university personnel, and people from automotive OEMs went to work finding actual examples of those practices in action by assessing activities at Donnelly Corp., Freudenberg-NOK,Johnson Controls, Lockheed Martin*, Raytheon*, and The Timken Co.

And from that, there are three deliverables:

1. SAE J4000, Identification and Measurement of Best Practice in Implementation of Lean Operation
2. SAE J4001, Implementation of Lean Operation User Manual
3. RR003, Automotive Lean Enterprise Conversion Best Practice Examples

Trent emphasizes that SAE J4000 is a performance standard, not an attribute standard that people may be more familiar with (e.g., the characteristics of lubricating oils). Instead of what to do (e.g., have a particular viscosity for a specific type of motor oil), this performance standard helps define how to do it.

What has been created has many facets. For one thing, it may stand as something of an analogue to QS9000. QS9000 was developed in order to provide a common quality program in an industry where each of the customers has its own quality program. When it comes to lean systems, each of the customers has its own approach. SAE J4000 can be the common one. (And like QS9000, there is a third party organization, the SAE-affiliated Performance Review Institute, that is providing certification and auditor training in SAE J4000.)

For another thing, the documents provide a yardstick for companies to measure themselves with, one that will allow them to determine just how lean they really are—objectively. Trent says they’ve found that no company they looked at—even the ones that are way ahead of others in lean—is the best in all of the 52 areas that SAE J4000 encompasses.

And RR003 allows people to see precisely what other companies—the companies that were benchmarked to be the best in the specific categories—are doing. Theory is nice, but practice makes things much more tangible.

The End Is Never Near

One of the notable aspects of SAE J4000 is that it is not static. That is, oftentimes a standard represents a level: reach that point and you have met the standard. Then the goal is to stay at that level, to continue to "meet the standard." A differentiator of SAE J4000 reflects the reality of that oft-heard remark about how lean—like quality—is a journey with no end: You’re always going toward it; it isn’t an endpoint, a position at which you remain (as is the case with other standards).

For each of the 52 component statements describing particular aspects of lean operation, there are generally four states that define ifor how well an organization is doing vis-a-vis that aspect. The four levels, from 0 to 3, describe a continuum, one with a fixed starting point but one with no end. That is, Level 0 is defined as: "The component is not in place at all or there are major inconsistencies in the implementation." That’s fairly binary, on-off: the company doesn’t have that component of lean and even if it does, it isn’t worth talking about, it doesn’t make the cut of consideration. That’s the fixed starting point.

The endlessness is described by the definition of Level 3, which has two parts. The first part of the definition states: "The component is fully in place, effectively implemented". That is essentially the same working found in the definition of Level 2: "The component is fully in place and effectively implemented." The definition for Level 3 continues: "and exhibits improvement in execution over the past 12 months." It is the open-endedness of that clause that indicates lean is not a static state of being because "the past 12 months" is ever changing. The organizations that are truly lean are continually striving for "improvement in execution."

Lean is not some sort of instant fix, but a continuous commitment, one that may fly in the face of what might seem to be expedient. In fact, one of the 52 component statements recognizes that the short-term and the long-run may be in conflict but that the management of the lean organization must hew to the latter, regardless of the force of the former:

4.13 Management has chosen to adhere to lean principles in the face of short term operating objectives inconsistent with lean progress.

One of the reasons why the reengineering proposed by Michael Hammer and James Champy in the mid-‘90s rarely worked at companies was, the two consultants later realized, because few people were willing (or able) to effect the thoroughgoing organizational change that was called for in the implementation of reengineering (remember, they were talking about metaphorically "blowing things up," radically altering the status quo). Presumably, a similar problem can—and does—occur in companies undertaking a move toward lean operations: there is a tendency to back-slide, to return to the comforting familiarity of the way things were. After all, the mass model is what most people are familiar with and have been doing for a long time; lean is a new behavior. As people who have gone on diets know, even after the best efforts to become trim, there is a seemingly natural tendency to succumb to the siren’s song of the chocolate cake.

People at lean organizations recognize that even though there are all manner of good consequences, there is never the opportunity to take things for granted, to have the feeling of "Whew! We’ve arrived. Glad that’s over." It’s never over—or if it is, then the slide to Level 0 is an expeditious one.

Trent relates a surprise that they had when making assessments: "A lot more first-tier suppliers are further along in becoming lean than we’d thought."

There are plenty of companies, he says, that are working on becoming lean. But there is an interesting aspect that emerges: "The ones that are furthest along are the first to say that they have far more left to accomplish. Some others seem to think they’re already lean." It isn’t hard to determine which ones understand the commitment.

Doing, Not Buying

Lean is a behavior. It is not a product. Although you can, say, buy a machine that lends itself to quick changeovers for one-piece flow operations, buy a piece of equipment that may be described in the promotional literature as being a "lean machine," it is how the machine is used that will determine its degree of leanness within an operation. It is the structure that management puts in place and the way that the workers function in that structure that determines whether the machine is, in fact and practice, lean.

Simply put: If management insists on having long runs that lead to banked inventory, then the workers are not going to be taking advantage of the quick changeover feature provided by the machine. Consequently, the machine—its potential leanness notwithstanding—is operating like a mass production unit.

Think of it this way: Put someone’s myopic grandmother behind the wheel of Jeff Gordon’s NASCAR Monte Carlo. She is unlikely to get the same thing out of the machine that Gordon will. It is how Gordon uses the car—and the infrastructure in which he uses it (e.g., there probably isn’t a foot of pavement in Detroit as smooth as the surface of the track in Daytona)—that makes the difference. It is the behavior of both Gordon and the management of NASCAR that contribute to speed. This is not to say that the machinery is unimportant, but to note that the people part is fundamental.

And the same is true of lean.

Within SAE J4001, which provides the instructions for evaluating an organization’s compliance to SAE J4000, there are six implementation elements:

• Management/Trust
• People
• Information
• Supplier/Organization/Customer
• Product
• Process/Flow

These six elements are weighted by percentage. But it isn’t an equal division, not 16.6% each. Rather, the first two—Management/Trust and People—which might be characterized as the "soft side"—account for 50%, which underlines the importance of the individual. One could argue that lean is primarily about management, workers and the trust that binds the two. Or perhaps more accurately stated: "the trust that should bind the two." E.g.,

4.5 The organization’s senior managers are actively leading the deployment of lean practices. 
4.10 There is regular, direct personal involvement by senior managers with the operating workforce concerning lean practices. 
4.12 No employee has reason to perceive their livelihood to be jeopardized by contributing to organizational lean progress. 
5.6 Labor and employment policies and agreements are in place which allow lean progress within the organization. 
5.11 Management does not supersede team decisions and actions when within the team’s authority.

Even though this may sound like something uttered by Star Wars’ Yoda, the point is: You can’t buy lean. You must be lean.

Sequence Matters

The order of the implementation elements is not random:

• Management/Trust
• People
• Information
• Supplier/Organization/Customer
• Product
• Process/Flow

Trent points out that it reflects a sequence that people should follow in their development of a lean system—and that what many companies do is the opposite: "One surprise that we had was the that first thing that people tend to do is perform kaizens, which is about Process/Flow, and they didn’t deal with the other elements."

Yet looked at from another way, he points out, this isn’t entirely surprising, because the Toyota Production System (TPS), at least as it was originally developed, was largely about Process/Flow, Trent says. Quick die change, 5S, TPM, kanbans—these are Process/Flow-related subjects. Although, he explains, TPS has evolved to include Management/Trust and People, chances are, when people consult the literature on TPS, they see the Process/Flow related things, and so they set about to do them. It’s not that there is anything wrong with these things, but the issue is to sustain lean operations. Unless other aspects of the organization are addressed, then there may be problems. For example, Trent observes that traditional accounting systems tend to reward inventories, so unless that has been reconfigured, anyone who is pursuing lean will be penalized, not rewarded for getting rid of inventory. Or say there is someone who determines that by reconfiguring a line, it is possible to eliminate 10 workers from the line—and then those 10 workers are laid off. Lean will not work under those circumstances.

There is another aspect to the sequence: Speed of implementation. Lean is not a silver bullet. (Or if it is a bullet, it is like one from one of the slo-mo sequences in the movie The Matrix.) Trent estimates that it can ordinarily take a company five years to become lean. But following SAE J4000 can make it happen in as little as two years. Two years: Any wonder that Management is the first word in the first element? It takes on-going commitment to be lean.

Any More Questions?

The why? of lean has several answers. One is that customers are forcing suppliers to deliver products on a just-in-time basis, which is facilitated in a lean system. (To be sure, it is conceivable that a supplier could deliver just-in-time from a built-up inventory, but not only is this exceedingly expensive, but also what happens in the event that there is something wrong with a part or assembly delivered to a customer: it could be that the inventory contains an abundance of defective stock). A second reason is that customers are asking/demanding year-to-year cost-downs, which means that it is important to get processes as efficient as possible on an on-going basis so as to accommodate the demands for these cost reductions. A third reason is that the nature of the market simply demands better quality and greater efficiency.

Trent puts it much more specifically: "There are plenty of people out there who will eat your lunch if you don’t do it." He believes that those who don’t get lean simply won’t survive. It doesn’t get any more basic than that.

*In addition to SAE J4000, with the "J" signifying "surface vehicle," there is also AS4000, which is for the aerospace industry. The U.S. military is interested in having lean suppliers. For example, personnel from the U.S. Navy’s Best Manufacturing Practices Center of Excellence worked with SAE on determining lean best practices.