Lean Lies | Wiegand’s Watch

This is a translation of the bulk of Bodo Wiegand’s latest newsletter, about Lean in Germany, followed by my comments:Bodo Wiegand

This year I’ve certainly visited 20 companies that have an American leadership or are managed by private equity companies.

With all the same phenomenon: Lean audit compliance 90% and above.

I visit every year at least 50 to 60 companies. Their degree of Leanness is in my estimation at best 70%, and at the companies mentioned above no higher than 50%. It’s not being mean or petty, but just that these companies have not understood it.

In  one of them, I walk with two managers into the shop. I remain standing there, while  both of them keep going. After 20 meters, they notice that I am not following,and return.  Then we need an hour to walk these 20 meters again because, in these 20 meters, we encounter an abundance of issues with order and cleanliness, the environmental, safety and quality, as well as waste.

Another company, with a Lean grade of 92% is highly automated, with an OEE supposedly of 73%. During the tour, 50% of the machines were idle, and then you had enough inventory over inventory to go crazy. At the given bottleneck – no SMED – no Lean Maintenance – nothing that would optimize the most critical point in the production process – and then a Lean grade of  92%?

“Wonderful, the Germans!”

Again, another company pursues excellence in Lean, TPM and CI.  It has assigned members to the CI process, organized to push it through, and provided everything you must have to be successful. And … all activities fizzle out almost entirely … Lean is processed, there is no steering of CI and everything stops  at department boundaries, and there is therefore no interface cross-optimization.  And  worst of all… it is not measured.

As you know – if I do not measure, I have no success.

It reminds me of a project. There were 5 employees in quality management who did nothing but accompany audits, prepare for them, and post-processed them.

What nonsense! I closed this department immediately and transferred the responsibility to manufacturing and department heads. It took 4 audits with terrible results until all had heard that it is YOUR process that needs to be experienced.

Then something unexpected happened – yet actually predictable.

Suddenly, the audits were not a matter of quality, but the leadership, the champion and team leader. Suddenly quality was in their heads, because they have been responsible for the quality itself and suddenly there were YOUR quality processes.

Auditors came to me and told me something they had never experienced. Although one could forget the quality manuals confidently, the external auditors have not let them fall through, but were thrilled – the processes were well visualized and followed.

Lean audit compliance 90% and better means, for example, that all employees know what Lean is, detect and eliminate waste, adhere to good housekeeping, Lean thinking and strive for improvement.

Done correctly, the Lean audit helps maintain the set standards, identify problem areas, describe areas of activity and measure progress. If the Lean audit is seen as an obligation – as a kind of show for the owners – it does not really help the company – it is just another scam or metrics game, done for its own sake, and with nothing to do with Lean

Michel Baudin‘s comments:

For many reasons, management tends to overstate achievements, and I could add to Wiegand’s examples. I remember being stunned when the plant manager told me that they had started their Lean implementation 8 years earlier, when I had not seen any trace of it on the shop floor.

Or my guide in another plant telling me about an assembly line “We have already optimized this, now we are working on scheduling,” while it was obvious that much of the improvement potential had been left on the table. That encounter was one reason I banned the word “optimization” from my vocabulary, as I had found it used primarily to justify not pursuing continuous improvement.

But I part company with Wiegand when he seems to agree that there can be such a thing as a meaningful Lean score, and that “Leanness” can be measured by audit compliance. To me, Lean never has been about having a list of practices in place that an auditor can check off on a form. No matter what the list is, a “Lean score” belongs with IQs, food calories and other pseud0-scientific, misleading bad metrics.

Such scoring methods push managers to make their plants look Lean for the benefit of auditors. This is what you need to do to become certified as a “Lean supplier” or to win prizes. It is not what you need to do to improve quality, productivity, delivery, safety, or morale. It leads to place andon lights on each machine in a row to quickly score more points, instead of pursuing SMED.  You really need SMED to support your customers, but it would not immediately boost your audit score, and it therefore goes on the back burner.

What is “Operational Excellence”?

Who would not want something called “Operational Excellence”? “Excellence” is superlative goodness, and “Operational” suggests a scope that includes not only production, logistics, and maintenance in Manufacturing, but also administrative transaction processing like issuing car rental contracts or marriage licenses. The boundaries are fuzzy, but Marketing and R&D are not usually considered part of Operations.

Hearing “Operational Excellence” for the first time, everybody takes it to mean whatever they think is the best way to run operations, which makes it unlikely that any two people will have the same perception. If marketers of consulting services can prevail upon a profession to accept such a vague and generic term as a brand, they can sell pretty much anything under this label. By contrast, the Toyota Production System (TPS) specifically refers to the principles, approaches, methods, and tools that Toyota uses to make cars. When you first hear it, you may not know what those are, but you know that you don’t know. Another difference between “Operational Excellence” — also known as “OpEx’ or “OE” — and TPS, is that the first is a goal, while the second one is a means to achieve the unmentioned but obvious goal of thriving in the car industry.

Chevron OE

OE at Chevron

It is an increasingly popular term, perhaps because of its very lack of precision. Google it, and you find, for example, that, Chevron “has spent more than 20 years expanding systems that support a culture of safety and environmental stewardship that strives to achieve world-class performance and prevent all incidents. We call this Operational Excellence (OE),…”  So, at Chevron, OE is about avoiding accidents that directly hurt people and oil spills that ruin the environment.

It is certainly not what it means to the  Institute for Operational Excellence. Its website has a glossary that contains exclusively terms from TPS or Lean, like Andon, Cell, Chaku-Chaku, 5S, Kanban,…, which strongly suggests that Operational Excellence is just the latest avatar of TPS when applied outside of Toyota. For 25 years, “Lean” has reigned supreme in this role but may finally be getting stale after so many botched implementations.

Shingo Prize for OpExThe Utah State University website, on its Jon M. Huntsman School of Business page, has a directory entry for The Shingo Prize for Operational Excellence. The Shingo Prize site itself, however, while using “excellence” in almost every sentence, does not refer to operational excellence. The theme of this year’s Shingo Prize conference, in Sandusky, OH in May, was “Enterprise Excellence,” which sounds like a further generalization. But, digging deeper, you find that the Shingo Model Handbook contains “operational excellence” 31 times, “Lean” 7 times,  “Toyota”  twice, and “TPS” never.


Shigeo Shingo

Shigeo Shingo


Stuck gears on the Shingo Prize page

The Shingo Prize page uses as a banner a picture of three gears with the teeth enmeshed in such a way that they can’t move, a picture that would have seemed odd to an engineer like  Shigeo Shingo. His legacy is primarily contributions to production engineering like SMED, Poka-Yoke, and line/work station design. On these subjects, you cannot see daylight between Shingo’s work and the Toyota Production System (TPS). Therefore, when you see a document called “Shingo Model Handbook” that refers repeatedly to Operational Excellence and never to TPS, you can’t help but conclude that Operational Excellence is just another name for TPS.

UC Berkeley OE Program Office Team

UC Berkeley OE Program Office Team

UC Berkeley has an Operational Excellence (OE) Program Office. Based on the family picture in its Spring 2014 Progress Report, it has 12 members. UC Berkeley has a total workforce of 29,000, of which 2,000 are full and part-time faculty members, and about 36,000 students. It works out to 1 member of the OE Program Office for every 2,417 members of the work force and 3,000 students. They present themselves as  internal consultants, with access to funding and expertise in “project management, change management, strategic planning, campus engagement, financial analysis and planning, business and data analysis, and communications.” The director of the office has been on the administrative staff for 13 years and reports to the university’s chief administrative officer. This is yet another take on it.

Do the proponents of Operational Excellence do a better job of capturing the essence of TPS than their predecessors in Lean, World-Class Manufacturing,  Synchronous Manufacturing, or Agile Manufacturing? The above-mentioned institute has a page defining Operational Excellence as “the point at which ‘Each and every employee can see the flow of value to the customer, and fix that flow before it breaks down.’” 

At first, it sounds like another version of True North, as explained by Art Smalley. Taking a closer look, as a general statement, it does not make much sense. It implies that every employee of every organization is involved in something that can, at least metaphorically, by described as a “flow of value” to customers. It is no stretch to see how this applies to a hot dog street vendor, but how does it work for, say, a firefighter? A firefighter serves the public by putting out fires, but the value of a firefighter resides in the ability to put out fires when they occur, not in the number of fires put out. A firefighter “seeing a flow of value to customers” is a head scratcher. As for “fixing the flow before it breaks down,” it conjures up the image of a plumber repairing a pipe that doesn’t leak.

Even Wikipedia editors are uncomfortable with their article on Operational Excellence. They denounce it as “promoting the subject in a subjective manner without imparting real information.” The definition is indeed short and confused:

Operational Excellence is an element of organizational leadership that stresses the application of a variety of principles, systems, and tools toward the sustainable improvement of key performance metrics.

Much of this management philosophy is based on earlier continuous improvement methodologies, such as Lean Manufacturing, Six Sigma, and Scientific Management. The focus of Operational Excellence goes beyond the traditional event-based model of improvement toward a long-term change in organizational culture.

It says what Operational Excellence is an element of, what it is based on, and what it goes beyond, but not what it is. And much of what these few words say raises eyebrows:

  1. The emphasis on metrics is a throwback to Management-By-Objectives, an approach that has historically not led to excellence at anything but gaming metrics.
  2. Lean Manufacturing, Six Sigma, and Scientific Management are emphatically not continuous improvement methodologies. Continuous improvement is a component of Lean but by no means all of it. Six Sigma is not continuous improvement at all, and Taylor’s “scientific” management was about preventing operators from colluding to curtail output, not improving processes.
  3. Continuous improvement is not event-based.  Contrary to what the name suggests, “Kaizen events” don’t do continuous improvement. This format was actually developed in the AME in the 1990s based on the realization that just continuous improvement could not accomplish changes of the scope that was needed.
  4. TPS/Lean, when correctly implemented, has always been about a long-term change in organizational culture.

Enterprise Ireland and Lean | Irish Times

See on Scoop.itlean manufacturing

“The Japanese are renowned worldwide for their car production where the concept of the management philosophy Lean derives from. It all began at Toyota when the car manufacturers discovered a new, more efficient method of producing cars valued by customers all over the world. The principles learned at Toyota became known as Lean which is claimed can be applied to almost any business. The core principle is creating value by reducing waste and unnecessary risk.”

Michel Baudin‘s insight:

While informing us that the Irish government has an agency promoting Lean, this article reflects common misconceptions.

No, it’s not a “Japanese management philosophy.” it is an approach developed by individuals who happened to be Japanese, which is not the same. Most Japanese today do not know or practice it, and quite a few non-Japanese do.

And this emphasis on “creating value” is an American talking point, not the Toyota Production System.

According to the article “Toyota benchmark themselves constantly,” which is news to me. While it is clear that Toyota is on the lookout for new ideas, I had not heard of Toyota doing benchmarking surveys of competitors. My understanding is that Toyota’s management considers such surveys to be a waste of time.

The article equates Lean with Continuous Improvement, giving the impression that it’s all there is to it.

And finally, the article repeats the Business Week claim that the Shingo Prize is “the Nobel Prize for operational excellence.”

See on www.irishtimes.com