Saturday, July 6, 2013

How can lean be sustained across a decentralized group geographically spread out?

Hello everyone,
This week's post is shared from, where  I participate monthly.   The question posed was:

How can lean be sustained across a decentralized group geographically spread out?-  A consumer-facing made-to-order manufacturing company has a significant service presence (sales associates, designers, customer service reps, logistics associates, installers) distributed across a wide geography in a somewhat decentralized organization structure. Each of the groups listed above is run by a different functional head. Sustaining Lean gains in a single plant is challenging enough -- doing so across several dozen groups spread across North America is tougher still. What advice do you have for the managers of this company?

My response:

When I internalize this question and visualize it, I see that infamous PowerPoint slide we all have used or seen that shows arrows moving in various directions with no rhyme or reason. We usually refer to it as rather chaotic or difficult to sustain any order when everyone is dancing to the beat of their own drum. I think its very important for organizations that are somewhat decentralized to understand the importance of “seeing through the same lens” or having a “guiding beacon” to always attempt to know which direction to point the arrow. I’m not saying this is the only answer, but its a start in the right direction-no pun intended :) . As my other colleagues have mentioned there are so many aspects of the recipe, from people development, leadership responsibilities, understanding the value stream, and how do all the functional silos work together the best way possible knowing that everyone is naturally silo’ed but how can we minimize the separation and bring in the common lens.
How I was taught was first understanding what are we trying to accomplish? How will we get there? And lastly, why is it important? I often share this as the WHAT-HOW-WHY model. Think of the “what” as expectations, ideal state as some have mentioned or leader standard work which cascades downward to processes. If people understand these aspects it begins to set the foundation to bring harmony to the arrows. I think the why is the most overlooked aspect of an organization. One of my favorite questions to ask – Why are you “doing” Lean? What problem(s) are you having that Lean is the answer to? Many use Lean and feel every tool “must” work or be force-fed because its part of the Lean tool box. I often share with folks even within Toyota not ALL the tools worked in certain areas. I experienced that first hand in Plastics where one piece flow wasn’t always an option with mold changes. As an organization we often forget to tell people the purpose behind Lean and how we mold it to fit best in our own business processes. Until that aspect understood it never gets past anything more than short-term gains. There has to be a certain level of consensus and buy-in vertically and horizontally per organization/plant or the arrows will always veer off on their own.

As I was taught at Toyota our values and principles were key in getting us to understand “the what-” internally it was a thin green book called “The Toyota Way 2001″, it gave us “tangible actions” as leaders to know what was expected of us. For example, Go and See, Respect for People, and Continuous Improvement were 3 of 5 of them. These were things we have to “live” daily, in other words it was our job not an option or choice to do. The Go and See facilitated some of the aspects Mike Rother brings up with the ideal state, current state and target conditions (gaps). As Jeff Liker mentions you break these aspects down into smaller pieces and manage through problem solving and identifying processes that aren’t meeting the expectations.

I feel the common thread that is often missing with organizations that are in a situation of decentralization (which are more than we think) is Hoshin Kanri or Strategy Deployment of the Key Performance Business Indicators. I believe this “thinking” along with solid values and principles allows us to move the arrows slowly in an upward direction towards a common goal which allows us to all see through that lens.

At Toyota they have plants scattered all over the U.S. (and world for that matter) which have different takt times for each, different products, standardized work and customer expectations. There is a North American head quarters that attempts to bring harmony across all those plants in the U.S. which make different product with various options depending on demand. The common thread I always experienced was expectations that were cascaded from headquarters to each plant. Here is how it would look:

Business vision or True North (from Japan) —->North America goals for all the plants—-> specific Plant goals—-> Department goals —-> Section goals —-> Team goals —-> individual process standard work (plant to process)

I’ve also described this as a Line of Sight. If we can have a guiding beacon (Hoshin) then we can begin to break down the barriers that keep the arrows in disarray versus in alignment. If we can create this common goal, change leaders actions to meet an expectation we have set ,and then align these with key performance business indicators that we can eventually make visual to everyone; then it begins to give a glimpse of hope to organizations that face this issue allowing them to work together for the common goal. As some have mentioned this can’t be an “add-on” mentality, it must be “the way we do business” or how we think as an organization. Similar to the dieting analogy or working out, its the process that gets you the results (weighing on the scales-lagging indicator). We are just as concerned with the leading indicators of your work processes that align with business goals from process to plant. I’ve often said its simple, its not easy!
 Until next time,
Tracey Richardson