88A2F80C-39D6-4947-A637-2007E795CCB0-Honda Supply Network May 14 2009

8/6/2019 88A2F80C-39D6-4947-A637-2007E795CCB0-Honda Supply Network May 14 2009

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Lean Network Annual ConferenceCovington, KY

May 14, 2009

From Modern Management to

James P. Womack, Chairman, Lean Enterprise Institute


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Recessions Are Good Times for Lean ean t n ng was rst u y em race n t e apanese

financial crisis of 1950 and fully applied to supply basesafter the oil shock and recession of 1973-75.

The American auto firms only took lean seriously afterthe crisis of 1979-82.

American firms in many other industries embraced leanin the general recession of 1991 and the aerospacerecession of the earl 1990s.

(Healthcare will finally take lean seriously when afunding crisis fueled by the boomers threatens

surv va . When faced with doing something hard (lean) or

somethin harder bankru tc man or anizations will

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(finally) chose the easier path!


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A Great Question to Ask Now

Will you use this recession to become a better, strongerleaner supplier?

Or Will you simply reduce headcounts, delay new

programs, squeeze your supp ers, an e-con en yourgoods and services (hoping your customers wont

notice.)

Historic note: Honda and Toyota have put everyrecession since 1973 to good use, emerging stronger

every me s ea y ga n ng on compe ors.What does the lean path require you to do?

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Five Elements of a Lean Transformation

Fulfillment, from order to delivery.

Product and process development, concept to launch.

Supply management, back to raw materials.

Customer su ort, forward to the end customer throu hthe product life/use cycle.

Management, to determine your organizationspurpose, to install processes to achieve your purpose,and to align and engage your people in sustaining andcontinuousl im rovin our rocesses.

Lean management is the hardest element to implement& sustain but the most important.

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What Is the Work of Mana ement ? Determine your purpose, specifically what customer

.

Create value-creating processes to solve customerroblems.

Align and engage everyone touching the value-

creating processes to sustain and improve them.

Sum-up: Purpose, then process, then people, toeliminate muda, mura, and muri.

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Managers Today Have aFundamental Choice:

(The Conference Room School of Management)

versus

Lean mana ement

(The Gemba School of Management)

- -the principles of these schools.

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Modern vs. LeanManagement

r n f n h v r i l f n i n

& departments in the organization asm h ni m f imiz i n n r l.

Strong focus on the horizontal flow of,

raw materials to the end customer.

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Clear grants of managerial authorityby

delegation).

ear grants o manager a respons ty

from managers at the next higher level,part cu ar y to so ve cross- unct ona ,horizontal problems in vertical

organ za ons ase on ver ca au or y.

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Line managers judged on end-of-the-,

increasingly financial.

Line managers judged on the state of

their rocess, with ra id feedbackloops with next-level management.

right.

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Modern vs. LeanManagement Planning and direction from the top down:

Make your plan and/or explain the variances.

Planning & direction in circular feed-backloops, with bosses asking questions:

What do you think our problem is?

What do ou think the otential solutions(countermeasures) are?

What countermeasure do you think we should select?

o must o w at w en w ere to test t ecountermeasures?

Plannin is invaluable lans ra idl become worthless.

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Conviction from the top that a good plan,,

the desired results.

Conviction that all plans are experiments

and can only be evaluated through thescientific method in the form of PDCA.

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M rn v . L nM n m n

n r li m n r r fr n l

with weak process knowledge.

ne mangers on ex en e ass gnmen s,

with deep process knowledge.

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Managers developed through formal, . .,

management schools, consulting firms).

Managers developed through in-company

gemba learning through repetitive A3analysis.

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Modern vs. LeanMana ement Decisions made far from the point of

value creation, by analyzing data.

creation, by converting data into facts , , .

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Problem solving and improvement,

programs.

Problem solving and improvement

conducted by line managers responsiblefor cross-function teams, with staffsreserved for unique technical problems.

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Standardization of activities conducted,

interaction and little auditing.

Standardization of activities conducted

b line mana ers in collaboration withwork teams, with frequent auditing.

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Suppliers chosen on market criteria and

contracts.

Suppliers chosen on long-term alignment

of interests and managed throughcontinuous supplier/customerdevelopment of shared value-creating

processes.

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Customers identified by market criteria,

transaction basis.

Customers identified by categories of

problem to solve and managed in long-term, problem-solving collaborations.

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Modern vs. LeanManagement Go fast as a general mandate:

Jum to solutions with the conse uence of

going slow through the complete cycle ofproduct & process development, launch &.

Go slow as a general mandate:Start with the problem and pursue manypotential counter-measures in parallel (with

g er costs & more t me at t e eg nn ng,followed by lower costs, less time & happier

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.


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Strong emphasis on the vertical flow of, .

Performance usually evaluated at single points.

Strong emphasis on the horizontal flow of

value lookin toward customers.

Performance evaluated in terms of optimizing the

.Control reconciled with flexibility!

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Methods of Lean Management

If organizations wish to pursue leanmana ement what are the methods to

employ at what levels?

engage employees on the few critical .

Note: The transition from modern to lean

management might be an initial objectiveidentified b strate de lo ment!

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A3 analysis to deploy top-level

processes as they arise, and evaluate

organization the work of mid-level

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A3 Analysis

A process with a number of steps, in theform of uestions:

What is the background condition?

What is the root cause? (Hint: It lies

somewhere in the value creatin rocess.

What are the potential countermeasures?

Who will do what when where to test it?

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The Dual Nature of A3 Analysis

While the pupil solves a problem the boss

Lean management education is almosty y u

supervision of someone at a higher level

important job responsibility is to create

.

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n r m n m n f n r

work with continuous kaizen toiliz h r niz i n n rmi

improvement the work of front-line

mana ement.

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Special Challenge forOperational Management

To design, implement, sustain andimprove a lean process to achieveevery organizational purpose.

,process is right from Job 1.

Continuous improvement of the leanprocess once implemented.

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Whats A Process?

A value stream by another name.

A series of steps (actions) which must beerformed ro erl in the ro er

sequence at the proper time to create

value for some customer.

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Types of Processes

Primary:

Development of products with processes.

, .

Support, through the product/customeruse cycle.

, , ,purchasing, etc.

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Whats a Lean Process

Value is properly specified from the

Otherwise everything is muda!

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Whats a Lean Process?

Every step in the process is:

Capable Dr. Deming and 6 Sigma

Available Total Productive Maintenance

o e: apa y x ava a y = s a y(foundational)

Adequate Theory of Constraints & TPS

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The steps are connected and

Continuous flow wherever possible - TPS

Pull (not push) when flow is not possible

Leveling, to smooth demand from a

s ng e pacema er po n -

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To eliminate:

Muda (waste)

Muri (overburden on people andtechnologies)

create muda!

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The Power of Mapping

Any process in any organization in anyindustr can be ma ed on a sin le

page to make its current performancevisible to ever one.

Requires the participation of everyone

,responsible person.

data must be turned into facts.

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o see, as w y, s ow respec .


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Widget Current-State Value Stream

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2 Min 5 Min 10 Min 1 Min 1 Min

7 Days7 Days7 Days7 Days 28 Days

19 Min

9

1

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The Power of Envisioning

Any process can be substantially

that is leaner.

This map must be embedded in an A3!

to manufacture the authority for

scientific, Plan-Do-Check-Act process

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Wid F S V l S


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Widget Future-State Value Stream

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Insurance Claim Future-State VSMBeneficiaryFuneral Home

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claim verification &

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Adequate? Adequate? Adequate?

4 Hours

Adequate? Adequate?

4 Hours5 8.3 Hours

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2 Min 16 Min 1 Min 19 Min1


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Sample A3

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88A2F80C-39D6-4947-A637-2007E795CCB0-Honda Supply Network May 14 2009

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