Senior Management: Key to Lean Success

By Russ Richardson, Partner, Witness Inspection, Inc.

It would be hard to find a complaint about nine-plus years of solid economic growth. But for those who care about continuous improvement and the imperative to become Lean in the manufacturing environment, the economic boom of the 1990s was no friend.

A booming economy can be a wonderful thing if you're interested in a promotion. And if the economy is booming enough, it might even provide you with the opportunity to get a promotion you haven't quite earned.

Over the past decade, the manufacturing sector saw an awful lot of that. Orders were flowing in so quickly, and manufacturers were growing so dramatically, that it became essential to put bodies into positions as quickly as they could be found. Skill and experience were welcome, but such commodities were hard to find. And when the orders just keep flowing in, regardless of your quality performance, why worry about it?

Find someone who will take the job. Give them the job. Keep filling the orders.

A good economy beats a bad one any day, but if good economies have drawbacks, one is certainly the opportunity they provide for mediocre-performing companies to nevertheless earn healthy profit margins, all while feeling no sense of urgency to improve operations or eliminate waste.

In that respect, our recent economic boom was no friend of the industry-wide imperative to embrace the principles of Lean manufacturing.

Lean is about better quality, lower cost and faster delivery. You achieve it by rooting waste out of your system at every turn. And as those who take this seriously are starting to realize, you cannot become truly Lean by treating it like a special program. It requires a fundamental, philosophical and cultural change of how your organization does business. It requires senior management and front-line leaders to insist - while leading by example - that Lean principles permeate every activity, every decision and every movement.

In most organizations - especially those who have not focused on this before - that is a major change that requires a huge undertaking to achieve. How many huge organizations seek to implement major changes when all indications are that everything is just fine? And if you define "just fine" as healthy profit margins, an awful lot of manufacturers spent the past decade doing very fine indeed.

But if you define it by an interest in continuous improvement, the current state of manufacturing is another story entirely. Some of my knowledge comes from my own business, and what my marketing efforts allow me to see. My company manufactures automation equipment that sorts parts without requiring hand sorting. It eliminates human error and saves time and money.

When marketing this technology, few question that it will work. What many do question, however, is whether they "need" this improvement when they are able to run an error rate of 50 parts per million - or more - and still make a profit. It speaks to a mindset. Some manufacturers recognize that they are never so good that they don't need improvement. Others figure that as long as the profits are rolling in, there's no need to change anything.

Until, of course, the economy slows, and newly fickle customers start demanding improvements at every turn.

Welcome to 2001 and the vaunted economic slowdown. With much of the manufacturing world suddenly hurting, those at the top of the food chain are making it clear that only those companies who can perform at a certain level are going to have a piece of the pie. Specifically, manufacturers are being expected like never before to provide high quality, low cost and fast delivery.

In other words, they have to become Lean.

This brings us back to those free-flowing promotions, endemic to the recently paused booming economy.

Many manufacturers who, for a decade, have enjoyed boom times with little attention to operational excellence are in serious trouble because the people they promoted into senior management have not the slightest clue how to even identify waste, let alone eliminate it.

Waste in the manufacturing setting, of course, takes many forms. It can take the form of wasted movement, wasted time, wasted scrap, wasted transportation and many other forms. Sometimes it takes the form of overproduction. Ultimately, it is about the throughput of the system, and eliminating the waste inherent therein.

There is no shortage of targets, but it takes a trained eye to spot them. And too many people in manufacturing management positions today did not bring such a trained eye to the job.

Some who find themselves in this position, to their credit, are willing to reach out and seek help. Lean consultants have more than enough to do these days. But overwhelmed senior managers who bring in consultants to help them sort out Lean need to understand that the consultants cannot do Lean. They can only help identify issues and steps. Lean is only real when it represents that cultural sea change within the company, and senior management must be the leader there.

The key is to have a committed core team that understands the business environment, and can strategically attack issues - focusing wisely on two or three at a time, the much talked about high leverage points, rather than 20 or 30.

Consultants can help, but senior management has to do it. That can be a pretty complicated task when you're 10 years behind the curve and your management team still needs to learn how to recognize waste. So it might be a good time to get started.

* Witness Inspection, Inc., based in Holland, Michigan, allows its customers to achieve an error rate of zero parts per million thought the use of its ZPPM technology. ZPPM technology applies vision automation to industrial sorting, eliminating human error, reduction costs and speeding delivery.