Oct 6 2013
Predicting the benefits of “Lean Actions”
In the TPS + 1 ENGINEERING group on LinkedIn, Hela Hassine asked “How can we predict and quantify the profit of lean actions before implementing them?”
I see three types of what Hela Hassine call “actions”:
- For some, you can do a complete discounted cash flow analysis before implementing. Cellularizing a job-shop falls into this category.
- For others, you cannot calculate the benefits ahead of time, but you can measure them afterwards. When you improve quality, first you can’t tell ahead of time by how much it will actually improve, and second, you can’t tell how much good this improvement will do to your business. After you have improved quality, you know by how much, and you can also measure the market impact of the improved quality, which is its dominant benefit. There is no way you can justify quality improvement ahead of time through cost-of-quality analysis.
- For the rest, the benefits are too diffuse to be measurable. 5S falls is in this category.
This has obvious consequences on implementation sequencing, that are often overlooked. Projects that lend themselves to a-priori justification are easiest to sell to management, and success in such projects gives you the credibility you need to undertake others with less tangible benefits. In other words, you are better off starting with cells than with 5S.
Oct 12 2013
Silos, “Value Streams,” and Lean Implementation
The on-line chatter about Lean is all about how you need to break down functional departments — or silos — and organize the company around “Value Streams” that encompass all the resources needed to fulfill orders for a product or product family, and are close cousins of BPR’s business processes and Wickham Skinner’s focused factories. When discussing implementation, however, the same value stream boosters/silo busters recommend that you start by setting up a “Kaizen Promotion Office” or “Lean Department.” This reminds me of the 1980s BBC series Yes Minister, in which an effort to streamline government starts with the creation of a new “Ministry of Administrative Affairs” and the hiring of 25,000 more civil servants to do the streamlining.
While it is ironic to create a new functional department while talking value streams, it reflects a reality: the notion of organizing everything by value stream is simplistic. As discussed in my comments on Deming’s exhortation to break down barriers between departments, there are many activities in a manufacturing organization that we cannot or should not distribute among value streams, including the following:
As for the Kaizen Promotion Office or Lean Department, mission creep all too often takes it from a feasible facilitation and communication role to a direct implementation role, which is hopeless because:
For the changes to happen and to stick, there is no alternative to leadership from within the organizations responsible for the target operations and participation by individuals who are directly affected.
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By Michel Baudin • Asenta selection, Organization structure • 2 • Tags: kaizen promotion, Lean, Silo, Value Stream