Build a Lean Enterprise on a Stable Foundation

It’s interesting how things come in threes. Recently the issue of stability and how it affects successful Lean implementation came up three times in rapid succession.
Following up with a client of ours who is a candy factory (very seasonal), we learned that they were plagued by material outages, unplanned staffing shortages, shipping errors, and over 130 minor stops on their main line during peak season this winter. Part of this was that their efforts to go Lean had “exposed the rocks” by lowering inventory and excess staff, and part of it was that they were now measuring these losses and can put a finger on what is preventing flow and on-time delivery.
Now that these sources of instability (losses in manpower, machine uptime, and materials) have become clear, they can address these and continue to build their Lean enterprise.
I spoke with another one of our clients in the automotive industry is facing the challenge of delivering products to customers in the face of instability. Their orders are 60% higher than even their most optimistic forecast. Their main assembly plant is in a low unemployment county and it is demanding, physical work. This results in their absenteeism and turnover accounting for 10% to 15% manpower shortage on any given day. They have long lead-time raw materials and schedule changes that happen daily due to a lack of methods and standards in customer service.
While there are Lean tools (OEE, Takt & cycle time balancing, Kanban, Standard Work) to remedy these situations, once you are caught with a backlog and one or more of the elements of manpower, machinery, methods, or materials missing, it can be very hard to find the time to do what’s needed to catch up.
In sharing our experiences about applying Lean in hospitals with Cindy Jimmerson of Lean Healthcare West, she tells me that “No hospital unit is stable”. Cindy brings 25 years of experience as a nurse and has important perspective on what it takes to make Lean work in a hospital. She means that turnover of staff, spikes in patient census (what we would call an inability to level the load), and a lack of standards in among physicians in methods of patient care the also in information flow processes supporting patient care requires a Lean implementation approach that is tailored to healthcare.
I learned a lot from a VP at a client of ours named Paul. Years ago Paul taught me an important lesson. Our client’s management team was struggling to embrace the changes we were introducing via Lean, because their behaviors and habits had not changed. While they saw the benefits of flow and pull, when absenteeism spiked up, or there was a supplier delivery problem, they went back to what they knew, traditional batch & queue.
Paul said “Jon, you have to practice. You can’t just play.” We all want to scrimmage and play ball rather than practice the drills over and over again when we’re on the field. Yet if we don’t have the fundamentals of throwing, running, catching, and blocking, we’ll lose on game day against a team that has been practicing all week rather than just playing. Paul was right, we were “playing” by focusing on implementing the Lean tools, rather than creating a foundation of stability first. Practice is less glamorous, and less fun perhaps, but vitally important.
A simple assessment of stability for a manager or a Lean consultant is 滴ow often do I have enough resources (manpower, materials, equipment availability, and stable and repeatable processes) needed to fulfill the request of my customer?” Most organizations measure on-time delivery, absenteeism, uptime (or OEE), and process capability. These are all good measures to answer that question.
Once you identify what “enough resources” means to fulfill customer requests (volume, mix, promised lead-times) then you will be able to manage and improve these metrics through Gemba Kaizen. Ten more laps before the game.