Lean Horizons Consulting

Lean Enterprise Transformation Since 2001

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Lean Horizons to Celebrate 10 Years of Consulting

Lean Horizons Consulting will be celebrating it’s 10th year of consulting in May, 2011!

Lean Horizons started in 2001 with just four consultants, who were led by the company’s President and CEO, Mark DeLuzio.  Today Lean Horizons is a global company serving markets in North and South America, Europe, China, and India.

One of our customer success stories comes out of Lean Horizons’ work with GE Money.  Lean Horizons was tasked with improving a non-manufacturing process, where a highly complex consumer finance dealer enrollment process was becoming a barrier to completing new transactions.  Lean Horizons deployed their proprietary suite of Lean assessment processes, diagnostics, and waste removal techniques in order to rapidly quantify dealer enrollment breakpoints and lost-profit sinkholes.

By deploying the complete suite of Lean tools, disciplines and practices, GE reaped a $200 million annual benefit and removed critical bottlenecks from their growth road map.

This is just one of the many success stories that Lean Horizons’ customers has been able to achieve over the past decade.  We look forward to helping many more customers build their own success stories.

 

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How Do You Apply Lean To Administrative Processes?

Mark DeLuzioAre your Lean efforts primarily shop floor focused? The late Dr. Deming stated that most customers do not leave an organization because of bad products; rather they leave due to bad processes. This would suggest that “back office” areas need to be transformed. Our experience tells us that the root cause of problems found on the shop floor lead us to processes that lie beyond the shop floor. For example, the root cause of late shipments may rest on a poorly engineered demand management process. Poor quality may lead us to flaws in the design process.

Utilizing Lean in administrative processes is usually a tougher assignment than applying Lean on the shop floor. First of all, administrative processes are typically invisible. Transactions may lie deep within a database. Determining the proper work sequence for each operator may be counter intuitive to many. Implementing flow may require a total re-engineering of the process, which is a tougher sell than the plant floor Lean.

Many companies attempt to use traditional shop floor tools within an administrative environment. This is usually met with resistance. Administrative Lean tools need to be customized to the office environment. For example, Value Stream Mapping may take on two forms: transactional vs. non-transactional. In the transactional environment you will find a “value object” (i.e. a document, application, purchase order, etc.).  Some administrative processes, such as closing the books or new product development, present challenges when trying to calculate lead time on a Value Stream Map, since there is no value object. Rather, non-transactional value streams reveal many activities and processes that occur simultaneously. It is important for companies to recognize this difference and use customized tools to fit the situation.

I would be interested in your approach to these issues. Are you applying Lean to the office? What have been your successes and challenges?

 

 

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Mark DeLuzio to Conduct Strategy Deployment Workshop

Lean Horizons Consulting President and CEO, Mark DeLuzio, along with Associate Partner Jorge Barron, will be conducting a workshop on Strategy Deployment at the 2011 Shingo Prize International Conference.  The workshop will be most beneficial to leaders who are concerned about how to achieve breakthrough performance by ensuring organizational alignment and maximizing the use of resources.

The workshop will focus on:

  • Introduction to strategy deployment
  • Link strategy deployment to Shingo model
  • How to develop strategy deployment through a practical case study
    • Top level matrix
    • Defining breakthrough objectives
    • Selecting Annual Improvement Priorities (AIPs)
    • Defining targets to improve and assigning resources
    • Next steps and action plans
    • Examples and other success stories

Benefits of Strategy Deployment include:

  • Reduces the speed to value cycle by aligning lean strategy to resources
  • Forces organizations to focus on the critical few strategic imperatives
  • Ensures standardized, sustainable, high performing business process
  • Ensures sustained breakthrough results
  • Provides a means towards strategic competitive advantage
  • Provides a means to communicate the strategic vision
  • Creates a common focus throughout the organization

Mark DeLuzio was also inducted into the Shingo Academy in 2007.

For anyone interested in attending the 2011 Shingo Prize International Conference, please register here.  Be sure to check the “Monday March 28 AM: Strategy Deployment – DeLuzio” box when registering.

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Does Your Company Have a Lean Culture?

Mark DeLuzioWhy do so many companies fail at lean transformations? I get this question quite frequently. I have had the opportunity in my career to literally work with hundreds of companies. Those that don’t make it usually have one thing in common: lack of top-level support from leadership. So many companies try to excel at the tool level of Lean, without regard for the culture. Lean culture is established by leadership. Many times, CEO’s are AWOL when it comes to Lean leadership. I once had a CEO introduce to me the top Lean executive in the company, only to say: “Please meet “Charlie”…he is responsible for driving Lean in our company.” When I hear this, a red flag goes up…Lean needs to be led at the top of the organization and not relegated to a staff position.

Many times, C-level executives drive un-lean behaviors by their policies and management style. For example, one client gave their customers favorable pricing at the end of the fiscal quarter. Customers quickly became educated, and 80% of the orders for the quarter were booked in the last two weeks of the quarter. This created chaos on the plant floor and it was nearly impossible for this client to do level-loading and one piece flow. In fact, this client would shut down their plant and move production personnel to the distribution center to ship products during the last week of the quarter.

Another client used machine efficiency as a key measure. This measure provided an incentive NOT to shut down the machines for TPM, and discouraged change-over’s on the equipment. As a result, excess and obsolete inventory was a huge problem with this client. I asked the CFO why he insisted on the machine efficiency measure, and his response was that the machines were expensive, and we have to optimize utilization. I then asked him if he drives his new car around the block just to get “utilization” from it. He said “NO”. It would cause wear and tear on the vehicle and it would be expensive to run for no reason. So, he instituted a behavior in the company that he would not do with his own personal situation.

Does your company suffer from measures that cause dysfunctional Lean? I would love to hear about it.