Why 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.