9.21.2007

What Should You Expect From a Lean Initiative?

The latest Industry Week survey of U.S. manufacturers causes me to raise this interesting question, particularly since lean has made significant gains in popularity.


            The article about the survey, written by David Blanchard, notes that


 


nearly 70% (69.6%) of all plants have adopted lean manufacturing as an improvement methodology)... What's more, lean is more than twice as popular as the next closest improvement method, Total Quality Management (34.2%).


 


            Similarly, the article includes a table of “strategic practices,” with Continuous Improvement at the top of the list, cited by 76.9 percent of respondents. It is followed, in order, by Recycling/Reuse Program, Quality Certifications (e.g., ISO), Customer Satisfaction Surveys, Value Stream Mapping, Kaizen Events/Blitzes, Environmental Management, Benchmarking, and so on.


            (Environmental Management showed the biggest increase from last year, and the category of Recycling/Reuse Program was new this year.)


            However, Blanchard notes that


 


…just because something is popular doesn't necessarily mean it's working according to plan, and part of the reason is that manufacturers have a wide variety of expectations when it comes to lean. Most companies believe that lean's main benefits come from cutting costs, but that's a mistaken perception, observes James Womack, founder of the Lean Enterprise Institute. 'Lean management is not a quick solution for cost reduction,' he points out. 'It's a fundamentally different system than traditional management for organizing and managing employees, suppliers, customer relationships, product development, production and the overall enterprise.'


Be that as it may, cost reduction strategies are on the rise, with the number of companies focusing on 'low cost' up 1.9% from last year. The only other area seeing a bigger gain is 'high quality.' Conversely, product development strategies are somewhat on the wane, with focus on 'product variety' down 2.8%, 'customization' off 2.3% and 'innovation' down 0.3%.


            I’m sure Blanchard is correct when talks about a wide variety of expectations. So I ask, what can we, or should we, expect from lean?


            I don’t mean at the kaizen level. Most people understand that a specific improvement project will have a specific goal, such as reducing cycle time by X percent.


            I’m speaking more broadly. Should a CEO expect that adopting a lean strategy will reduce costs? Improve time to market? Increase capacity? All of the above, and more?


            All of the above is the easy answer, but it is too vague and general to satisfy a CEO. What is a more satisfying answer? And should the answer focus on quantity as well as quality, meaning the amount or percentage that time to market is typically reduced or capacity is typically increased?


            Or to put it another way, how do you make a case for lean to the CEO?


            I suspect many of you have thoughts on this subject. Post them below.


 

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