ARTICLE – LGN’s affiliate in India, Lean Management Institute of India, has recently tested the Lean Transformation Model. In this article, a number of interesting insights and reflections are shared.
By: Dhirendra Kumar Dubey, CEO, Lean Management Institute of India
In the past few months, we at Lean Management Institute of India have taken up for validation the five dimensional Lean Transformation Model, developed by the Lean Global Network. We decided to deploy it first in a manufacturing environment, where many interventions for quality improvements had either failed or could not be sustained after a number of initial successes.
For more on the Lean Transformation Model, click here
We approached an automotive parts manufacturer that was after improvements in the quality of their suppliers. We asked them to select the worst set of suppliers, those with chronic quality problems and whose performance, despite several attempts, could not be boosted.
The business problem the company was trying to solve was identified as PPM (parts per million) levels, with the goal of reducing the figure by 50% in four months. Together with the Lean Transformation Model, LMII put one of its main principles to the test: “The value of what we deliver is measured by what happens after we go away.” Sustainability of the improvements and people’s ability to drive the efforts going forward by setting new targets is the only real sign of success.
After launching our project with the parts manufacturer, we went on a gemba walk with its suppliers and coached them to develop effective teams comprising of people who would be able to manage the technical as well as the social aspects of the lean transformation. Coaching was also provided in the oobeya, to effectively visualize every element of project management.
We observed that the organizations that completed these activities achieved results faster and had more satisfied customers. Likewise, where organization leaders found excuses for not carrying out those activities or shied away from taking the role of coaches, the effect was a worsening of the overall situation rather than an improvement.
To help the parts manufacturer we deployed a two-pronged approach:
- Analysis of past data through multi-level Pareto to understand the generic and repetitive defects from the customer’s point of view. After carrying out an analysis of the problem the team quickly reached the point of cause, while gemba observation allowed them to see the defects as they occurred. This aligned the team, the root cause was agreed upon quickly, and various proposals for countermeasures came from almost everyone in the team.
- Development of a proper understanding of current defects from the customer’s viewpoint. Quality problems were documented on the same day they occurred by showcasing physical defective components or by using photographs shared using smartphone apps. Analysis of the issue would then take place every evening in the oobeya. The company decided to adopt a “customer first” approach, and to stop errors whenever and wherever they occurred.
A number of action points were identified and responsibility to fix each of them was assigned. PPM trends were carefully analyzed. About a month after the project kicked off, the head of supplier quality told me: “I don’t know if the project will meet its objective but one thing I can say for sure is that now, in our top management review meetings, we don’t discuss these suppliers any more, which we constantly did before.”
Two months after the lean activities were introduced, the list of defects had grown to around 150 on average for each supplier.
At one supplier in particular defects kept appearing. While management was dealing with our visits and giving priority to some unresolved issues with their customers, one of the supplier’s sub suppliers was suddenly replaced, resulting in instability in the extended supply chain. While technically advanced, the new sub-supplier was a competitor: at this firm, the project failed miserably.
The company LMII was working with analyzed large numbers of project improvement points using affinity diagrams. The information gathered using this technique was used to create an improvement team dedicated to systemic issues (a great learning considering the improvement efforts had only started a couple of moths before). New systems were designed based on these lessons learned, and implemented at three suppliers, which – this time things were different – exceeded their goals and even set new, more ambitious ones for themselves.
Two other suppliers, whose management teams had decided not to follow the company’s example and adopt lean principles, ended up in a much worse situation: their PPM levels went higher than they were at the starting point or remained at same level. After several discussions and persuasion attempts, these two leadership teams understood their mistakes. Once they started working on the inputs provided to them, both of these companies achieved fantastic results.
WHAT WE LEARNED
This experience proved that the Lean Transformation Model works. In particular, it works in situations where attempts through TQM had failed (in our case, TPM and six sigma had actually failed to make any difference at all). We found the model to be more effective when leaders act as coaches and less effective when they don’t. This is the core of the model, and LMII even managed to turn failure cases into success stories as these companies’ leaders turned into coaches.
Further proof that the model works came from the fact that, four months after the project closed, the customer selected a new set of 10 suppliers and engaged LMII again to reduce their PPM by 50% in the next four months. This also proves our principle of sustainability holds up.
Our challenge is now to confirm the consistency of the Lean Transformation Model to deliver results again and again. There is an extra opportunity for LMII in here: to prevent the failure of a project right first time. This encourages us to try out the model in different business environments.
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Dhirendra Kumar Dubey is CEO of the Lean Management Institute of India