Introduction

The origin and at the very core of lean enterprise lies the design of the Toyota production system (TPS) and its ability to flow products through a low buffered manufacturing process (Womack et al., 1990). On first encountering the approach to systematically designing a high-performance production system, it appears counter-intuitive to many and a long way away from the Western traditions that have been dominated by mass production thinking (Womack and Jones, 1996). However, the ‘system’ design combines a number of key features which support customer service and the compression of time between receiving goods and receiving payment for the conversion process (Mather, 1988). This chapter will examine the basic elements of the ‘pull’ systems of a lean enterprise and explore alternatives for businesses that do not conform to the ‘high volume–standard product’ environment of automotive component manufacturing and assembly.

Production scheduling

The history of production scheduling in the West began with the use of clerical workers to schedule manually the complex products and the manufacturing/assembly processes so that products were outputted into the finished good stores just as customer due dates for orders were reached. In essence these planners attempted to launch production in time for when the customer expected delivery, but there were many aspects of traditional and mass production approaches which complicated even the most simple of manufacturing processes. These features included a core belief that batch production was the answer to cost efficiency (and therefore profit maximisation).

Introduction

The ‘art’ of designing a fully effective lean production system requires attention to detail and a keen eye on the standardisation of processes in a manner that makes working life simpler and better for those who work in the factory (Grief, 1991). On first encounter with a system that has been implemented with full visual management practices, observers find it a contradiction, the almost-clinical approach to the design of the workplace seems to conflict with the high premium lean manufacturers place upon team autonomy. In reality, there is no contradiction because visual management creates a standard which allows ‘abnormality’, in whatever form, to be detected quickly and frees the worker from thinking about the basics of good management in favour of applying thought processes to more important matters of improvement. It looks simple in operation but visual management is an art in itself and a lesson that is well worth learning as it provides a path for problem-solving and improvement activities in a way that can be sustained due to its simplicity and ‘ease of doing’ on a daily basis.

Examples of good visual management surround us all – the red markings on the rev counter on the dashboard of your car and the level markings on the side of your kettle to avoid overfilling, and even the different colours of fire extinguishers are just a few.

Getting started

The first stage in the ‘hands-on’ element of the lean journey is to orientate people's thoughts and interest through awareness raising and promotional activities. The purpose of awareness-raising seminars is to provide key personnel with knowledge of what to expect from CANDO activities and to understand why these activities take place. The seminars consist of an outline of the principles of lean, a business game to illustrate lean principles and a review of CANDO activities. The lean business approach looks to change the system, but also to drive the change with the workforce by including them in the decision-making and change process. As a result, it is important that the whole organisation is aware of the lean business approach, and gradually the training in the application of lean principles will cascade down throughout the organisation and out into the supply chain (Dimancescu et al., 1996).

CANDO is the most common starting point for the beginning of all change aimed at creating a lean production organisation and commences with the promotion of visible change within the workplace. Years of failed initiatives have resulted from good ideas that had little in them for those that were the subjects of the changes – the shop-floor teams. To create a positive management–employee relationship requires a clear signal from management that they are seriously focusing on lean as a business approach and not as a short-term initiative.

We have addressed the subject of lean holistically, though our discussion has by no means been exhaustive. Indeed there are endless aspects of lean implementation we could have tackled: the application of lean into the new product process, supply chain management or translation of lean into a service environment, to name just a few. However, for the purposes of focus and keeping our target readership, we have limited our discussions to lean implementation in a manufacturing environment. In this chapter we do allow ourselves a little latitude, and cast our thoughts to what we believe are some of the major challenges facing our target readership today. An awareness of these issues is a sound starting point for solving them. Key to this is the prime driving force of lean – that of delivering value to customers. Before we continue, however, we offer the reader a brief summary of this journey through the book so far. For those that have read the book from end to end, this will act as a review and reminder; for those that have dipped in and out, this will offer a useful overview.

Brief review of the book

In our Introduction we present our research sponsors and dismiss the myth that lean is just an automotive or Japanese phenomenon. We identify our target readership and set our aims and objectives in writing this book.

Introduction

Working for a lean business has many advantages and attractions for every employee. Posing the question, ‘what's in it for me?’ reveals some interesting answers.

For business directors, the lean business offers a working environment within which there is lots of factual information about the business and its processes together with time, free from ‘fire-fighting’, to plan the future direction of the business. In the context of the traditional factory, managers are surrounded by ‘noise’, constant interruptions and chaos. This is not suited to effective thinking and ‘direction setting’ for the businesses (Dimancescu, 1992).

For middle managers, those who control business departments, lean benefits include working with other managers in groups to improve business processes in a more meaningful manner. This interaction is priceless and improves every managers' understanding of how the business works and of the pressures faced by each department. It is the time spent team working and the decisions of this management group which yield the largest of business improvements and financial savings.

For the operations teams, the lean environment creates stability and discipline within the workplace. It makes work more interesting and there is a lot more emphasis on Improvement, Development, Engagement and Autonomy (IDEA).

What has just been described cannot be achieved by an individual, it cannot be achieved quickly but it must be the goal of all lean businesses. For too many businesses though, what we have just described is somewhat distanced from current factory life.

Introduction

This final part of the book heralds something of a departure from what has preceded. Now that we have addressed the key elements of lean transformation we turn to slightly more reflective issues. In the last chapter we considered an organisation's ability to sustain change over time and this chapter addresses organisational learning, particularly in the context of a group. The final chapter outlines our reflections and deliberations at the end of the research programme and indeed at the end of the process of producing this book. Although slightly more cerebral in nature, we do try to present these matters in the down-to-earth and practically oriented style to which you have by now become accustomed.

Let us be absolutely clear at the outset about what we mean by learning and why it matters. The purpose of learning is not the accumulation of knowledge for its own sake, but rather to bring about behavioural change (Pedler et al., 2003). The ability to learn new skills, to apply them and to embed them into everyday behaviour is what sustainable change is all about. It all begins with learning. For a lean transformation to successfully take place, learning is required at the operational level of the organisation, at the level of the value stream and, most definitely, at the strategic level (Dimancescu et al., 1996). In the previous chapter you saw how learning determines the ability to achieve different degrees of sustainability.

Introduction

The market for manufactured products is getting more and more competitive. There is no such thing now as a safe product or a safe market. Even companies that previously had a monopoly position, such as telecommunications, gas or electricity corporations, have found themselves deregulated or the target of consumer groups. These changes add up to the new competitive world within which consumers and customers have greater power and increasingly demand higher levels of customer service and greater value (Womack and Jones, 1996). To compound these changes, Western manufacturers face a new threat ‘from the East’, as India, China and former soviet bloc countries, each with massive reserves and large numbers of manufacturing firms, increasingly look to sell products into Europe. These ‘exports’ drive up the levels of competition and therefore no Western firm can afford to stand still and not to become involved in factory-wide improvement activities. Failing to understand the new competitive environment is one way to lose market share and another is not to improve to protect customers and keep them loyal, as other businesses compete to trade with them.

These competitive conditions have generated a new ‘set of rules’ for Western manufacturers. These new rules include the provision of the highest level of customer service, the delivery of quality products in shorter and shorter lead times and product proliferation to offer variety to customers (McCarthy and Rich, 2004).

If you work in industry or commerce today, then the topic of ‘quality’ will be part of your business language. Quality is an order qualifier, something demanded and expected by customers and the cost of poor quality is quite often a measurement at the highest level of an organisation (Hill, 1985). This is not surprising when figures such as 40% of the total cost of doing business is attributed to avoidable activity due to rework, scrap and rejects. Known as the ‘hidden factory’, this describes the multitude of, mostly, small activities which make up a significant cost to business, but are unnecessary. A waste of resource, worse still, a source of frustration between employees and across the different levels of an organisation.

This chapter will briefly outline the role of quality in a lean transition and its place in supporting such a transition. We are aware that the concept of quality is discussed in many guises and often as ‘initiatives’ by management authors, and, for the most part, these initiatives are considered old and staid. Quotes, from line workers and managers, that ‘we did TQM in 1996’ are not uncommon and reinforce the idea that this type of approach is a ‘tick in the box’ exercise. However, ‘world class’ businesses, and those determined to become world class, know well that quality management lies at the heart of all improvement activity.

We know that to maintain performance we need to continue focusing on a task.

If this sounds familiar to you, then you are the person for whom this book has been written. Continually displacing what is important for what is urgent is endemic amongst western managers. We call it the ‘fire-fighting syndrome’, because we have an image of a manager with a fire hose who spends his time fending off the problems of the day. The trouble is, of course, if we never make time for what we know to be important, we may not have a business tomorrow!

This book addresses the messy subject of lean implementation. If you are involved in business improvement and have figured out that it is one thing to find out what to do but another to actually do it, then this book has been written with you in mind.

Let us address the meaning of lean first of all. If you are familiar with the car industry or even the manufacturing sector more widely, then you may have come across the term. The term ‘lean’, coined by a group of academics, concerns the ability of the Toyota Motor Corporation to achieve outstanding manufacturing performance levels in Japan. They wanted a word to capture what they saw – a system without ‘fat’. By fat we really mean waste and we'll come back to that later on.

Introduction

The maintenance function and its relationship with production operations is often a neglected area of lean production systems design, yet the skills of this department, when harnessed correctly, add a new dimension to the competitive arsenal of the firm (Willmott and McCarthy, 2000; McCarthy and Rich, 2004). In truth, maintenance engineering and its associated skills, has been neglected for many years. However, as early as 1970, the exemplar Just-In-Time (JIT) supplier companies to the ‘world class’ Toyota Motor Corporation had already spotted and were closing this ‘missing link’ of sustainable high productivity management and had begun to ‘blur the edges’ between the operations and maintenance functions so as to integrate both departmental improvement efforts. These businesses included the Aisin corporation and the world renowned Denso (then known as Nippondenso) and the approach was demonstrated to be so powerful that it has been promoted by the Japanese Institute of Plant Maintenance ever since (Nakajima, 1988). These early pioneers, Denso and Aisin, were quick to understand that with a lean production system of no stockpiles of inventory and shop floor problem-solving groups, the performance of the factory maintenance engineering needed to be improved. These businesses therefore set in process a chain of events which would later lead to the development of the total productive maintenance (TPM) approach to high performance manufacturing or total productive manufacturing as it is now more popularly known.

Despite including the term ‘maintenance’, TPM is far from a functionally driven maintenance improvement initiative (Rich, 1999).

Introduction

At LERC we frequently receive enquiries about sustainability of lean programmes. Specifically managers want to know what can be done to maintain the improvements already made and continue the drive to improve. What we would like to reply is, ‘Take these three simple steps and you will have guaranteed sustainability.’ Sadly all our experience and research shows that different organisations and even different activities within the same organisation have varying problems with sustainability and so a more contingent, less prescriptive approach has to be adopted.

This chapter will look at what we mean by sustainability, and how we know when we achieve it. At LERC we have also conducted some research in this area with the Society of Motor Manufacturers and Traders' (SMMT) Industry Forum (IF) and we will be outlining the findings of this research and some additional findings from our Learn 2 companies (Bateman, 2001). The Learn 2 companies were aware of the IF findings and had the opportunity to implement them. We conducted some research to see how effective they had been and explore the opinions of the change agents at each of the companies. The outcome of this research was less definitive and highlighted some of the difficulties with applying a formal model to sustainability of improvements. The chapter concludes by exploring how the research findings can be used by managers in their own organisations.

Box 9.1 shows some definitions used in this chapter.

Introduction

This chapter describes and assesses the new-product development (NPD) process, including organizational and leadership perspectives. Successful products are generally efficient in resource utilization (easy to produce), have effective product delivery mechanisms (easy to deliver), and are beneficial to customers (easy to use).

The “standardized” NPD process includes idea generation, concept development and selection, program definition, design and development, validation, pre-commercialization, and launch. Rapid product development requires close coordination, cooperation, and linkage between all of the participants, whether virtual or actual.

Innovation is difficult to mandate but it can be fostered. It is derived from dedicated people using creativity to discover new ways of thinking and solving problems. Cross-functional team integration is the organizational structure that allows collaborative behavior in a creative environment. It is essential for ensuring that the contributions of engineering, marketing, manufacturing, finance, and the other functions are in strategic alignment. The emphasis is on teamwork, information sharing, communication, and participation at all levels in the decision process. Creating a spirit of high performance is pivotal for success.

Management encourages, motivates, and inspires the organization to discover innovative solutions that lead to pre-emptive positions and outcomes with significant competitive advantages.

Chapter 3 includes the following topics and learning objectives:

• Understanding the management system (process management) for new-product development.

• Defining the “standardized” NPD process with its “phases and reviews” construct.

• Determining how to measure the potential risks and rewards of NPD programs using selected metrics.

• Describing the six phases of the NPD process.

• Understanding the organizational aspects of product innovation and how cross-functional teams are tailor-made for process management.