Sunday, March 17, 2013

One More Time: Lean Is Not Just For High-Volume Producers

“If Toyota produced small quantities of specialty products and we produced cars, people would say that lean only applies to producing small quantities of specialty products.”

One of the most common arguments against the adoption of lean is that it applies only to high volume manufacturing operations.  Much of the literature available on the subject, as well as the close association with Toyota has created the misconception that lean is not applicable to organizations that deal with a small number of large projects or highly customized products or services.

There are three basic questions related to the application of lean that demonstrate that it is not dependent on the volume of product or services produced.

1.      How do your processes need to perform (i.e., what it the ideal condition)?
Answering this requires a clear understanding of the needs of the customer and the business.  It is not possible to define how processes must perform – or the ideal condition – without first understanding the value stream and how the individual processes and systems interact to produce the product or service that meets the needs of customers.

Knowing how a process needs to perform has no absolutely no relationship to the size of the organization, the volume produced, or the repetitiveness of the work.  Whether building an offshore platform, painting a house, or producing a pressure gage, every organization can benefit from knowing the ideal. 

2.      How do your processes perform?
Every organization needs to understand how its processes actually perform and the types of problems that interfere with meeting the ideal.  Are there delays?  Are costs higher than expected?  Do quality or safety problems occur?  Was the amount of work completed during the period less than expected?  This can be difficult for some organizations to understand because people become so accustomed to dealing with problems that they not longer recognized as problems.

The feedback regarding performance of a process also needs to be as close as possible to the time the work was actually performed.  Addressing a problem is much more effective when the facts about it are fresh in the minds of the people involved rather than months, weeks, or even days afterwards.  Because of this, the feedback should be provided at least daily so the information can be discussed on a rhythmic basis like a morning or end-of-shift meeting.

3.      How are you going to deal with the gaps between ideal and actual performance?
Whatever the volume of business or degree of customization, it is critical to continually work toward closing the gap between the way processes should operate and how they actually operate.  Doing this effectively requires effective problem-solving, the ability to learn, and standardized processes. 

As noted in question 2, closing the gap requires attacking problems as they happen while the facts are easier to remember.  Addressing problems as they happen can also help keep the number of process issues from building up and becoming overwhelming to the organization.

Improving performance or any type of organization requires continually moving the operation toward the ideal condition.  This can only be done when the ideal is clearly defined (question 1), the actual is understood (question 2), and problems are addressed rapidly and effectively (question 3).

Quantity Doesn’t Matter
Lean is just as applicable for a company constructing an office building, as it is to an automotive manufacturer.  The key is to compare how a process is expected to operate with how it actually operates.  If the plan was to install drywall in eight offices on the third floor today, for example, and the team was only able to complete five offices, understanding the reasons (e.g., missing tools, poor quality drywall, or poorly aligned studs) and taking appropriate actions should help tomorrow’s work flow more smoothly.

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