by Greg Moran

Why think Lean?

The quandary that lean poses for many organizations is that if the core lean concepts of value and waste are fully embraced many activities (process steps) that currently absorb much of the time, effort and resources in an organization get called into question (even in excellent organizations - see Porsche later).

More activities than we’d expect fall into the non-value added (waste) side of the equation as opposed to the value added side.

This can make subscribing to lean thinking a powerful but somewhat chastening experience. Even the terminology (“waste”) leaves no room for ambiguity.

In some ways being fully open to lean thinking is a bit like being completely honest with your GP about how healthy your diet and lifestyle actually is or the real number of units of alcohol you consume a week!

Somewhat sobering (sic) but there’s big potential pay off for leadership in not shying away from the provocative thinking and discussions that lean can provoke:

  1. Lean thinking can shift organizational thinking away from  “we need more resources” type thinking that afflicts many organizations  towards far more valuable - “we need less waste” type discussions and initiatives;
  2. Lean thinking - specifically shared understanding of value and waste  opens up a host of previously unseen improvement (waste reduction) opportunities;
  3. Lean thinking can robustly challenge and sharpen the thinking behind major  investment proposals IT  & other (what waste will be reduced, what value will be added?).

Lean Thinking & Porsche -"Opening eyes in the kingdom of the blind"

It may seem surprising that a world class like  Porsche could ever be guilty of carrying tremendous amounts of waste  but Porsche staged a remarkable recovery in its manufacturing performance through the determined application of lean thinking and waste elimination over a 6 year period.

Porsche’s lean journey as detailed in “Lean Thinking v German Technik” in Lean Thinking – Womack & Jones (Simon & Schuster) is still a classic illustration of how lean thinking turned a renowned company’s fortunes around in the early 1990s and is well worth a read.

In 2016 there are still many facets of the Porsche lean journey that are relevant both for manufacturing and non-manufacturing organizations and for successful organizational transformation in general.

Porsche’s sales had declined by over 70%  over a 8 year period to 1994 by which time the company was on the brink of bankruptcy.

The company recruited Wendelin Wiedeking - a former manager of Porsche’s Paint & Body shop (who subsequently rose to become CEO & President) to help resuscitate the company’s fortunes.

Early in his tenure Wiedeking exposed Porsche employees to real lean thinking in action by undertaking a number study tours to Japan that exposed Porsche management and staff to Japanese lean manufacturers first hand.

No doubt these study tours were sobering eye openers for many Porsche participants– but they marked the beginning of Porsche’s 6 year lean journey that yielded the outstanding results below and set the company up for the success it is today.

Among the many improvements made during Porsche’s lean journey (see highlights table below) the most remarkable was the reduction in the production cycle time for a Porsche from 6 weeks to 3 days!

Porsche management and employees began to fully understand and embrace the distinction between waste and value added activities in their organization – an essential component of lean thinking and success.

 

Porsche's  Lean Transition - Key Results

1991

1997

Production Cycle Time - Welding to Finished Car

6 weeks

3 days

Inventories (Avge days stock per part)

17 days

3 days

Effort - Assembly Hours per Car

120 hours

45 hours

Quality (Defects per million (bought parts)

10,000

100

Quality (Defects per car post assembly)

100

25

Concept to New Model Launch

7 years

3 years

Source:  “Lean Thinking v German Technik”  - Lean Thinking – Womack & Jones

Lean thinking and continuous improvement success requires leaders to open the collective eyes of their organization’s people to the core lean concepts of waste & value (be they in healthcare, manufacturing, financial services, construction, professional services or other sectors).

While this can be a somewhat chastening and challenging exercise (as it was for Porsche) it can provide the basis for dramatic and sustained continuous improvement and change.

Even highly successful organisations sometimes fail to fully grasp these fundamental elements of lean thinking and continue to reside "in the kingdom of the blind".

All organizations that are truly committed to excellence and continuous improvement need to develop their own waste identification skills through training in the concepts of value and waste and  the use of direct observation and value stream mapping in particular.

If you’d like to find out more about how lean thinking, tools and training can drive organisational performance in your organisation, please contact Greg Moran at +353 86 2208532 or email This email address is being protected from spambots. You need JavaScript enabled to view it..

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