I recently read Lonnie Wilson’s article on IndustryWeek.com and now I’m looking forward to reading his book, “How to Implement Lean Manufacturing”. Mr. Wilson is correct, of course, leadership commitment is essential for cultural changing initiatives, and transitioning from forecast-driven pull to demand-driven pull is a cultural changing initiative. It is imperative for an organization’s leadership to be committed to the change, and to have the discipline to produce only when more inventory is needed.
Mr. Wilson has devised a series of questions to help an organization evaluate if they have management commitment for a culture-changing initiative.
The Five Tests of Management Commitment to Lean Manufacturing
1. Are you actively studying about and working at making your facility leaner and hence more flexible, more responsive and more competitive?
2. Are you willing to listen to critiques of your facility and then understand and change the areas in your facility that are not lean?
3. Do you honestly and accurately assess your responsiveness and competitiveness on a global basis?
4. Are you totally engaged in the lean transition with your:
- your presence
- management attention
- support, including manpower, capital, and emotional support.
5. Are you willing to ask, answer to, and act on, “How can I make this facility more flexible, more responsive, and more competitive?
A ‘yes’ to all five questions means you have passed the commitment tests. Any ‘no’ means there is an opportunity for management improvement. (Adapted from “How to Implement Lean Manufacturing” Lonnie Wilson, McGraw-Hill, 2009)
Based on my experience, I respectfully suggest two additional “tests” that might indicate an opportunity to improve leadership commitment:
6. Are you willing to invent new metrics to line up with the new definition of success?
Inconsistent Metrics: Too often, manufacturing leadership is measured and rewarded by executives who using long-standing but inappropriate metrics. Existing metrics often emphasize short-term, cost-driven, local productivity (e.g. unit costs) while ignoring long-term, customer value-driven, holistic profitability (e.g. cycle times, value-added throughput, and market share). Unless all levels of management utilize broader metrics that are consistent with lean principles, manufacturing leadership will be torn between what they know is right and what measures they or their superiors use to motivate.
7. Are you engaging and educating the entire organization on the lean journey?
Discordant Strategy: Sometimes manufacturing leadership is fully committed to lean. But, other functional areas are pursuing strategies that are inconsistent with lean. For example, finance might be unwilling to invest in training or process improvement. Or sales & marketing might be unwilling to collaborate with manufacturing on projects to implement demand-driven pull.
Is pull going to fail if either of these are the case? In my experience, they will make the journey much harder. Manufacturing management will need to address these challenges by investing time in two preliminary steps:
1. Piloting the use of pull on one product family or within one small manufacturing group. Best practice: Run a pilot for 3-4 months, measure the results that proves the business case, publicize how the results lead to overall business improvements (even if the out-of-date, short-term, cost-driven metrics would of indicated otherwise), and then use these results and new metrics to (a) win support both to expand pull and (b) update the metrics to support the lean initiative.
2. Build consensus on why and how pull will work. Best practice: bring together a cross-functional management team with a Pull Design Workshop to build the business case (with a compelling ROI) for pull, and to design the best methods to implement pull in your organization, across all functional areas.
Taking these two steps can make the difference in achieving the sustained, demand-driven pull culture.
Posted by Tom Knight