Returning from a visit to Germany I was struck how far ahead we are in the UK. There is now little argument that lean is the way forward and most large manufacturers in the UK and the USA are now running a lean initiatives. In Germany the auto industry is still reeling from wasted years trying to grow by acquisition and to compete by stuffing their cars with every conceivable technology. Neither worked.
Indeed Daimler Chrysler is now trying desperately to simplify the technology in the next generation vehicles and it’s chairman recently warned that Toyota was about to make another assault on the European market. They now recognise that Toyota’s brilliant processes have given it a decisive edge in world markets and that it is the benchmark they need to follow.
We have lived with Toyota in our midst for well over a decade and there is a growing pool of people with hands on experience of TPS in the UK. Add to this the success of the Manufacturing Advisory Service in alerting smaller manufacturers to lean and you have a good foundation for increased competitiveness in the UK. However there is no room for complacency – we now need to step up a gear in implementing lean.
Going round the UK I still find that most of the lean initiatives are led from the bottom up by operations people. And most of the training courses run by in-company Lean Academies are still about lean tools. Almost all the focus is on the shop floor – when many of the impediments to lean are now to be found in the support processes in the office. While I see lots of current state value stream maps, there are too few future state maps with Value Stream Plans to implement them. I have not yet seen Value Stream Plans, rather than departmental budgets, being used as the key building block for allocating resources in the business as a whole.
In my view lean now needs to be led from the top and driven by business objectives enshrined in Value Stream Plans for every primary and supporting process in the organisation. The in-house Lean Academies ought to be teaching product line (or value stream) managers a second layer of knowledge about how to reconfigure the entire order-to-delivery-to-cash system for every product line and how to redesign the next generation product and process in the light of the lean lessons learnt.
System and Flow Kaizen starts by asking the right questions of the current state revealed in the value stream map, in order to design a future state. The objective is to see what has to be done to be able to produce exactly in line with customer demand and to trigger production on the basis of levelled demand directly from the customer’s point of use. This in turn depends on choosing the right place to locate the pacemaker process with the right amount of standard inventory. This in turn depends on achieving operational stability (capability, availability and flexibility) in each step in the process. When this is assured you can combine operations into cells and pull just what you need from every upstream step.
Only by asking these system level questions can you drive actions and select the right tools to get you closer to a Toyota-level future state. This is also the only way to be able to disconnect your MRP system as a production instruction tool, keeping it only for capacity and materials planning as demand trends change.
Once the Value Stream Plans are in place it becomes clear what level of resources are required to achieve them from across the business – from production control, operations, engineering, maintenance, material handling, logistics, purchasing, finance, human resources and the lean promotion office. It is top management’s job to lead a policy deployment process to prioritise the resources to implement the Value Stream Plans and to align them with the overall needs of the business.
We may have been talking about lean a lot longer than the German manufacturers. However they are now in deeper economic trouble than we are and the rise of Toyota in Europe will erode their remium price position in the car market. They are beginning to realise drastic action is called for. We can not rest on our laurels. It is time to move beyond lean as a box of tools and Point Kaizen to the next level of lean – to Flow and System Kaizen. We now have the complete set of action learning workbooks (and workshops) to teach System Kaizen in production. This is what every company spiring to be lean should be doing and teaching right now.