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Competitive Challenges: The Leadership Imperative

There is not a day that goes by that you can't find an article about a company somewhere in the world that has implemented lean manufacturing and achieved great success.

There is not a day that goes by that you can't find an article about a company somewhere in the world that has implemented lean manufacturing and achieved great success. Or conversely has not implemented lean and is moving operations to Southeast Asia. And it is true-implementation of lean manufacturing can generate huge savings and help companies reduce cost. However, after spending more than 20 years working as a manufacturing consultant primarily in the global automotive industry, what I have learned is that it's just not about only lean manufacturing

Many companies talk about how they've implemented kaizen, andons, 5's, standardized work, and other lean methodologies, and then say "We are lean." Then they file chapter 11 and we all think "I thought you were lean". The truth is that each of those elements is just a tool within the larger lean toolbox. And actually, lean manufacturing itself is really just a tool that is part of a larger operations improvement model. Everyone has tried to copy the Toyota Production System, and in doing this they focus on production, because the name leads you to believe that it is a production model rather than a total operations improvement model.

Best-in-class companies that have been able to survive the downturn in the industry and continue to grow are the ones that manage their business using a total operations system. And in today's North American economy, all businesses are feeling the pain of a highly competitive global economy. Companies can not sit back and wait for the economy to return to the way it was before. Now is the time to roll up our sleeves and fight to keep manufacturing jobs in this country.

In our operations improvement work we focus on the transformation of suppliers. How does a company transform itself to survive in this current environment? Well, to transform an operation really requires 4 fundamental steps, but each of those steps has numerous tentacles required for success and the time to implement depends on the company.

I. The first and probably most important step is the acknowledgement by company leadership that change has to occur and its commitment to make that happen. This is absolutely a prerequisite to begin a culture transformation. Operations improvement or lean manufacturing can never be successful without leadership commitment.

II. With leadership commitment in place, the real work begins at developing a business plan and gathering data to baseline the organization on its performance. Once the data is gathered, the team must work on the development of tools and systems to regularly track data to the business plan. When that is done, the issues begin to come to the surface. The tools developed must be consistently used to begin to see progress toward transformation. Leadership and middle management must utilize the tools to drive the business plan. It takes discipline and hard work to stay focused and not stray from the plan. Again, leadership commitment is critical to drive the team to the vision rather than towards the fire that needs extinguishing today.

III. Once that focus is engrained in the team and discipline is accomplished, companies can begin to implement tools of good process improvement. New ideas can be experimented with, low-hanging fruit can be picked, and savings will start to hit the bottom line. Whatever the situation, transformation can take place in any function. The key to transforming is training the workforce. Companies must invest in teaching and coaching people how to recognize improvement opportunities and how to solve problems effectively. Once people have the basic skill and are turned loose, you will be surprised at the savings that can be found. Leadership has to coach and allow for mistakes in this stage so that the lessons learned can be incorporated and operations transformed.

IV. The last part of the process is simple: continuous improvement. Many companies have said they are as good as they can be and can't do anything else to improve their operations. And then they move their business to China or India. But in most cases, you can find numerous areas of opportunity for further improvement. Companies get caught up in day-to-day fire fighting and can't see the real opportunity in their operations. Everyone from leadership to the shop floor must be trained and have a passion for continuous improvement in order to transform their company.

Again, it ties back to leadership. Leaders have to be constantly asking the question: How can we do it better? In order to constantly be competitive with the outside forces facing us today we have to push to transform every day. No company can be arrogant in today's environment. So lean manufacturing or operations transformation? Companies that react quickly and implement a total operations transformation are the ones that will be standing when the dust settles. And what is transformation? TRANSFORMATION = LEADERSHIP. It starts there and it ends there! 

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