Visual Management: More than Just a Pretty Plant

By Charles Standard and Dale Davis

One of the most widely publicized elements of lean manufacturing is visual factory or "5S." The term "5S" is derived from five Japanese words that refer to cleanliness, order, and discipline. These concepts are the foundation of industrial housekeeping and workplace organization.

Twenty-five years ago when researchers began studying successful Japanese manufacturing companies, 5S was one of the most impressive "secrets" discovered. These factories were so well organized that abnormal situations were readily apparent. Equipment was so clean and well maintained that any problem such as a loose bolt or leaking oil could be easily seen. This fervent pursuit of cleanliness and orderliness became a hallmark of Japanese manufacturing.

In a landmark article in the Harvard Business Review entitled "Why Japanese Factories Work," Robert Hayes stated, "The modern Japanese factory is not, as many Americans believe, a prototype of the factory of the future . . . it is the factory of today running as it should." On this point we agree heartily! A clean, well-organized factory is definitely a sign of good management, but it is not necessarily an indicator of lean manufacturing.

As lean manufacturing became more popular in the 1990s, 5S was widely accepted as a cornerstone of lean thinking. It is often implemented as the first step in a lean transformation, and some companies make 5S the central theme in their "lean" production systems.

Why is 5S so readily accepted? The answer is both surprising and revealing. It so happens that good housekeeping and workplace organization are perfectly compatible with the mass production economies-of-scale paradigm. This implies that a company can fully endorse 5S without embracing any other aspect of lean thinking.

Regardless of the production philosophy, a clean and well-organized workplace provides tangible and undeniable financial rewards. For example, if tools and materials are conveniently located in uncluttered work areas, operators spend less time looking for items or stumbling around unneeded material and equipment. This leads immediately to higher workstation efficiency, a fundamental goal in mass production.

True visual management goes far beyond having a clean and well-organized factory. Visual management provides real-time information and feedback regarding the status of the plant. It is a company-wide "nervous system" that allows all employees to understand how they affect the factory's overall performance.

Consider the popular sport of baseball. Why do avid fans glance repeatedly at the scoreboard when the action is clearly on the field? The scoreboard answers important questions about the status of the game. It tells us how our team is doing in relation to the goal, namely to win the game!

  • What is being measured?
  • What does it mean to win?
  • What do we need to do to win?
  • Are we winning?
  • Do we even have a chance?
  • How many runs do we need?

The scoreboard also provides real-time information about other important game parameters:

  • What inning is it?
  • What is the count?
  • Was that a ball or a strike?
  • How many outs?
  • How many hits?
  • How many errors?

The scoreboard generates and maintains interest. It provides unambiguous feedback about performance. It presents the same information to everyone, whether owner, manager, player, or spectator. Most importantly, it keeps us focused on the measures that are important and lets us know what must be done to win the game.

By analogy, true visual management shares real-time information about the status of the factory:

  • What are our goals?
  • What are our key measures?
  • How is the factory performing in relation to those goals?
  • What is preventing us from reaching our goals?
  • Most importantly, how does my individual effort contribute toward success?

Visual management provides a clear and common understanding of goals and measures. It allows people to align their actions and decisions with the overall strategic direction of the company. It is also an open window to factory performance, and it provides the same unbiased information to everyone, whether owner, manager, operator, or visitor.

There is irrefutable evidence that "shared vision" is critical to the success of today's factory. Visual management communicates that shared vision along with an understanding of how each individual contributes toward that success.

By

Charles Standard and Dale Davis

Charles Standard and Dale Davis are the authors of Running Today's Factory, (www.runningtodaysfactory.com) which received the 2000 Shingo Prize for "outstanding contribution to the body of knowledge in the field of manufacturing excellence."

Charles and Dale are the principals of Maya Productivity Plus, a management consulting firm in Ann Arbor, Michigan. They can be reached at dale@lean-mfg.com.