Sunday, February 5, 2012

Lean: It's More than Kaizen

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I have noticed recently that there is a common misconception about the true meaning of lean.  Even among some improvement consultants, what is often referred to as lean is really nothing more than kaizen.  This is unfortunate because many organizations are missing out on the benefits associated with a true lean deployment.

Lean = Kaizen Plus Production Control

Too often, people learn about value stream mapping or the categories of waste and think they understand lean.  Although true that lean includes identifying and reducing waste, this type of activity is only one component of lean.  Changes to improve a process or system – whether through value stream mapping to reduce waste or an independent project to address a quality issue, is kaizen.

What many people do not seem to understand is that a focus on production control is what differentiates lean from a kaizen or 6-sigma process.  Without an emphasis on production control, companies miss an important component to align improvement efforts with business objectives and, more importantly, transform the organization and gain buy-in at all levels.  In the most basic sense, lean is about production control and kaizen is one way to help gain control over the production process.

Aligning Improvement With Business Results

The purpose of a business is to continually improve the value it provides its customers.  A company’s processes are critical to achieving this purpose.  Whether providing a product, service, or both, there is an optimal pace at which processes need to operate in order to meet objectives and, therefore, the needs of customers.  Lean thinking requires clearly understanding this pace (referred to as takt time) and focusing efforts on eliminating or reducing the effects of anything that interferes with synchronizing the overall system to operate at this pace.

Whenever I visit an operation that claims to be lean (a problem in itself because an operation is never truly lean), I ask questions about takt time.  All to often, I get blank looks or comments that takt time does not apply because the company does not have manufacturing operations or that they produce a highly customized product.  By ignoring takt time, however, these companies are focusing their efforts on general process improvement (e.g., 6-sigma or kaizen) rather than lean.  The problem with deploying a kaizen – rather than a lean – approach is that it becomes more difficult to directly tie improvement to business results, making it tougher to gain (and sustain) buy-in throughout the organization.

Takt Time:  Not Limited to Manufacturing

As written in a previous post, takt time can be calculated for virtually any process.  Whether the process produces invoices, maintenance services, gas wells, or sandwiches, there is an optimal pace at which it must operate to meet objectives.  Understanding and striving to consistently operate at this pace is a vital part of running the business. Note:  it should be inherently obvious that success also requires that the process must provide - and continually improve - its product or service at a level of quality that customers expect.

Although a kaizen or 6-sigma process is commendable (and a valuable component of lean thinking), a company that stops there is missing out on a critical improvement opportunity.  Focusing on takt time makes the connection between improvement and business objectives much clearer.  As a result, it becomes much easier to get people throughout the company to buy into the process.  In fact, once people understand – and are held accountable for – takt time, they will begin to look for ways to reduce the waste that interferes with the throughput of their process.  Improvement efforts become seen as part of, rather than interfering with, meeting objectives.  And when this happens, transformation can truly begin to take place.

Determining Takt Time

Takt time can be determined for virtually any type of process.  Examples include:
  • Number of invoices processed within a given timeframe to keep up with demand;
  • Number of gas wells to be drilled over a period of time to meet production objectives;
  • Number of bags handled at an airport to keep airplanes and passengers moving;
  • The pace of filling prescriptions at a hospital to keep staff from waiting, and assuring patients don’t experience medication delays;
  • Making coffee and specialty drinks in order to meet customer preferences while keeping waiting lines relatively short.
With this in mind, a basic process for implementing lean should include:
  1. Clarifying business objectives (including clearly understanding the customer’s needs);
  2. Determining the optimal pace (takt time) for critical (and eventually, all) processes to meet objectives;
  3. Implementing visual measures for throughput (to enable process leaders to understand how well they are keeping up with takt time);
  4. Standardizing processes and systems (i.e., the value stream);
  5. Continually identifying those things that are preventing the value stream from meeting takt time (which can involve shortening or reducing variation in cycle times).
Improving processes in order to meet takt time is where kaizen or 6-sigma enters the picture.  These approaches provide a framework for improving the throughput of processes in order to meet objectives.  Without creating energy around takt time, however, a 6-sigma implementation can easily lose focus and miss an opportunity to gain full buy-in of the improvement process by leaders.

Introducing takt time gives perspective to people to help them better understand why the organization is pursuing lean.  It provides the business context that is so critical for successful transformation and commitment, and helps reduce debate regarding the importance of spending time on improvement projects.

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