lean, take two! reflections from the second attempt at lean implementation
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Lean, take two! Reflections from the secondattempt at lean implementation
Maike Scherrer-Rathje a, Todd A. Boyle b,*, Patricia Deflorin a
a Institute of Technology Management, University of St. Gallen, Dufourstrasse 40a, 9000 St. Gallen,Switzerlandb Schwartz School of Business & IS, St. Francis Xavier University, Antigonish, Nova Scotia, Canada B2G 2W5
1. It’s not easy being lean
Given recent increases in global competition, scarceresources, and fluctuating economies, it is not sur-prising that lean production has become critical tothe long-term survival of today’s manufacturingorganizations. Lean is a management philosophy
focused on identifying and eliminating wastethroughout a product’s entire value stream, extend-ing not onlywithin theorganization but also along thecompany’s supply chain network. Lean is achievedthrough a set of mutually reinforcing practices,including just-in-time (JIT), total quality manage-ment (TQM), total productive maintenance (TPM),continuous improvement, design for manufacturingand assembly (DFMA), supplier management, andeffective human resource management (de Treville& Antonakis, 2006; Narasimhan, Swink, & Kim, 2006;Shah & Ward, 2003, 2007).
Business Horizons (2009) 52, 79—88
www.elsevier.com/locate/bushor
KEYWORDSLean production;Case study;Best managementpractices
Abstract It’s not easy being lean. And for many companies, getting lean right thefirst time does not always happen. Lean is a management philosophy focused onidentifying and eliminating waste throughout a product’s entire value stream,extending not only within the organization but also along the company’s supply chainnetwork. Lean promises significant benefits in terms of waste reduction, and in-creased organizational and supply chain communication and integration. Implement-ing lean, however, and achieving the levels of organizational commitment, employeeautonomy, and information transparency needed to ensure its success is a dauntingtask. This article describes in detail two lean implementation projects within thesame company: a global manufacturer of food processing machines and equipment.The first project was a failure, while the second is viewed as a success. Examiningthese projects in detail, the major criteria and conditions that led to either leanfailure or lean success are identified. Based on these conditions, we highlight anumber of lessons learned, all of which may help other organizations ensure thesuccess of their own lean implementation and improvement efforts.# 2008 Kelley School of Business, Indiana University. All rights reserved.
* Corresponding author.E-mail addresses: [email protected]
(M. Scherrer-Rathje), [email protected] (T.A. Boyle),[email protected] (P. Deflorin).
0007-6813/$ — see front matter # 2008 Kelley School of Business, Indiana University. All rights reserved.doi:10.1016/j.bushor.2008.08.004
Author's personal copy
Despite the significant benefits lean offers interms of waste reduction and increased organiza-tional and supply chain communication and integra-tion, implementing lean and achieving the levels oforganizational commitment, employee autonomy,and information transparency needed to ensureits success is a daunting task. Not every companywill be successful in its first attempt to get lean. Theresearch featured herein presents lessons learnedfrom two lean implementation projects within aleading European manufacturer of food processingequipment. The first project, attempted in 1997,was a failure. The second project, launched in 2006,is currently viewed to be a success as measured interms of management commitment, employee au-tonomy, information transparency, cultural fit,short-term performance improvement, and long-term sustainability of lean efforts.
To identify the criteria and conditions that led tolean failure and lean success (respectively), as wellas the lessons learned, detailed interviews wereconducted with 20 members of the company repre-senting a wide variety of functional areas and hier-archical levels, ranging from shop floor employeesto senior management. This article provides insightto managers regarding what may lead to a successful(and, also, an unsuccessful) lean outcome, as well aswhich practices and activities to consider (or stayclear of) to ensure the success of their own leanefforts.
2. What is lean?
When examining studies addressing lean, it is im-portant to distinguish between those consideringlean from a philosophical perspective related toguiding principles or overarching goals, and thoseanalyzing the concept from a practical perspectiveas a set of management practices, tools, or techni-ques that can be observed directly (Shah & Ward,2007). Lean from a practical or operational perspec-tive involves implementing a set of shop floor toolsand techniques aimed at reducing waste within theplant and along the supply chain (de Treville &Antonakis, 2006; Hopp & Spearman, 2004; Liker,2004; Narasimhan et al., 2006; Shah & Ward,2003, 2007). Such tools and techniques include,for example, setup time reduction, kaizen (i.e.,continuous improvement), six-sigma quality, visualdisplays (e.g., 5S), kanban, just-in-time supply sys-tems, and preventative maintenance (Shah & Ward,2003; White & Prybutok, 2001). Lean as a philoso-phy, however, considers the interrelationship andsynergistic effect of these practices in order toimprove overall levels of productivity and product
quality, waste reduction outside of traditionalmanufacturing (e.g., R&D, accounting), integrationand interaction across functional departments, andimproved work force autonomy. As articulated byLiker (2004, p. 7):
To be a lean manufacturer requires a way ofthinking that focuses on making the productflow through value adding processes withoutinterruption (one piece flow), a ‘‘pull’’ systemthat cascades back from customer demand byreplenishing only what the next operation takesaway at short intervals, and a culture to im-prove.
Similarly, Shah and Ward (2007, p. 791) definelean production as ‘‘an integrated socio-technicalsystem whose main objective is to eliminate wasteby concurrently reducing or minimizing supplier,customer, and internal variability.’’
The large volume of lean research literature,combined with its international adoption across amultitude of industries, testifies that this productionsystem–—originally developed by Taiichi Ohno for theJapanese auto industry–—has proven its value farbeyond its original geographic region and industrialsector.Given that lean is amulti-faceted concept andrequires organizations to exert considerable effortalong several dimensions simultaneously, it is notsurprising that successfully implementing lean is acomplex task. Based on the extant literature (e.g.,Achanga, Shehab, Roy, & Nelder, 2006; de Treville &Antonakis, 2006; Liker & Meier, 2006; Shah & Ward,2003, 2007), we consider lean success to occur if acompanyachieves themajor strategic components oflean (management commitment, employee autono-my, information transparency, and cultural fit), suc-cessfully implements a number of practices tosupport the operational and tactical aspects of lean(e.g., JIT, one-piecework flows, continuous improve-ment, training programs), and provides evidence ofperformance improvements and sustainability of thelean program in the long-term. The research pre-sented herein traces the challenges and accomplish-ments that a large, global organization faced on itsjourney to achieving a vibrant and sustained leanprogram, so to better understand the conditions thatmay lead to such success.
3. Machinery Inc.
To identify lean success criteria, as well as lessonslearned which should be considered by other compa-nies, this research explores two lean implementationprojects within one large, global organization. Thecompany chosen for analysis, hereafter referred to as
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Machinery Inc., is a leading European manufacturerof food processing machines and equipment. For thepast several years, Machinery Inc. has generatedannual sales of over s 1 billion (U.S. $1.44 billion).The company employs approximately 6,200 peopleworldwide, 3,000 of whom are located at the headoffice in Switzerland. During the course of our re-search, 20 interviewswere conductedwithmanagersand employees representing different functionalareas of the firm. All interviewees were selectedbased on their involvement with the current leanimplementation project, or knowledge of/experi-ence with the unsuccessful project in 1997. TheAppendix presents additional details regarding par-ticipants involved in the study, interview questionsasked, and the research protocol adopted.
4. Becoming lean at Machinery Inc.:Take one!
In 1997, Machinery Inc. was a manufacturing compa-ny with clear rules, defined hierarchies, and a viewthat the existing batch production workedwell. Man-agers at Machinery Inc. were satisfied with how thecompanywas performing in its existingmarkets (foodmachines, paint and dye markets) and, as a result,began to consider entering new markets with modi-fied products (e.g., machines for adding vitamins tofood, machines for forming chocolate into shapes).Despite senior management’s satisfaction withmanufacturing performance at the time, shop flooremployees at Machinery Inc. were struggling withissues surrounding quality and delivery. This slowwork flow was the result of a steady increase involume over a number of years and a micro-viewof process improvement, whereby a piecemeal orband-aid approachwas taken to addressmanufactur-ing inefficiencies, versus examining and possiblyredesigning the entire manufacturing process. Giventheir struggle to keep up with existing product vol-ume, employees at Machinery Inc. took it upon them-selves to identify ways in which operationalefficiency could be improved.
As revealed by our interviews, the first attempt atlean followed a bottom-up approach and wassparked when a production line supervisor cameup with the idea of applying a number of leanpractices (e.g., one-piece flow, individual workcells) to the way that 12 main machines (i.e.,finished products) were produced, so as to reducelead times and improve quality. This supervisorintroduced the idea to senior management, whoagreed to fund a lean implementation project andnominated him as project leader. The newly formedlean project team, comprised of the production
supervisor and four employees, quickly defined astrategy and vision for the project, and developed aschedule for the implementation process. Once theschedule was finalized, employees impacted by thelean changes were trained and preparations for theimplementation of the new changes were made.
Although agreeing to fund the project, seniormanagement took a hands-off approach to the firstlean implementation effort. The project leader andthe lean team were responsible for the project andmanaged it by themselves.While implementing lean,members of the project team still had functionalduties, forcing team members to address lean issueswhile at the same time balancing their day-to-dayresponsibilities. This made it difficult for teammem-bers to stay focused on the lean planning and imple-mentation efforts; as a result, excitement for, andcommitment to, the project began to decrease. Inaddition to lean, a number of other change projectswere occurring in manufacturing (e.g., process opti-mization, cost reduction) at the same time. Theseother projectswere isolated fromone another, some-times ledbyexternal consultants, andviewed tobe incompetition with one another. In other words, therewas no cross-project coordination or managementdisclosure regarding how all of these projects wererelated and how, combined, they would improveoverall levels of manufacturing performance.
All of these issues caused the lean project tobecome very unpopular with employees, with onlythe team believing in the true value of the initiative.Even with the challenges facing the team, a numberof ‘‘lean wins’’ did occur, including cost and timereductions in the areas with completed work cells.Despite these initial successes, however, 6 monthsinto the project and with lean practices (e.g., workcells, one-piece work flow) being applied to theproduction of four machine types, the lean projectwas finally terminated due to a lack of organizationalsupport and a senior management reorganization.
4.1. Sources of lean failure
We asked bothmanagers and employees to reflect onthe initiative, so as to better understand the reasonsunderlying the project failure. Probing this issue inmore detail, we found that thebottom-up implemen-tation approach to the lean project produced a cas-cading effect of problems, including lack of seniormanagement commitment, lack of team autonomy,and lack of organizational communication of–—andinterest in–—lean. These specific problems led tothe termination of the lean project. The fact thatthe project was initiated following a bottom-upapproach resulted in a lack of senior managementcommitment; managerial support, as was noted
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earlier, is critical to lean success. As stated by theSwiss-based manager for production:
We learned from the 1997 project that topmanagement commitment is important. Theproject has to come top-down. . . .If it is initi-ated bottom-up, it needs too many resources toachieve goals, and the goals will not be noticedanyway.
The lack of senior management commitment andinterest in lean also meant that employees whowere affected by the lean changes did not under-stand how this new project was related to the manyothers which were occurring, at the same time, inmanufacturing. An employee in strategic procure-ment remembers the problem very well. . .
This project was only one out of many projectsgoing on at the same time. The employees werenot motivated at all to start another project.They did not see any benefits from the leanproject and. . .thought that it was a waste oftime, taking away [time that was needed] toconduct daily business.
. . . as does the director of engineered products:
We also [realized], of the 1997 project, that acertain degree of change fatigue occurred. In1997, we had many change projects in parallel;some employees were confused with what wasgoing on.
Seniormanagement’s lack of interest in, and com-mitment to, the project was also accompanied by areluctance to delegate decision-making authority tothe project team. Although employees managed theproject in its entirety, they were not given the powerto implement process changes and improvements asthey saw fit. As a result, the project leader had toprepare all team needs, ideas, and recommenda-tions, and then organize meetings with those man-agers who held the decision-making power. Thisresulted in significant lag times in decisions beingmade, with many requests critical to project successbeing rejected, as highlighted by the lean projectleader:
The managers I needed to talk to were notinterested in the topic, and only agreed toappointments with me very reluctantly. I spenthours collecting all needs from my employees,designing the presentations, and preparing myargumentation strategy to convince the man-agers of the relevance of our topics. The meet-ings were usually frustrating for both [parties]:the management team was not interested inthe topics and I felt [their] unwillingness. . . .
Usually, I had to leave without the desiredoutcomes.
Despite thechallenges faced, theproject teamdidexperience, first-hand, the benefits of lean. Howev-er, these lean wins (e.g., cost reduction, lead timereduction) were not being communicated effectivelyat all levels of the organization. Employees inmanufacturing and other functional areas were notaware of the success of the project and, as a result,there was little support from them. The team decid-ed themselves to show initial lean successes to em-ployees, inorder tohighlight the valueof theproject.It was assumed that, after those employees highlyimpacted by the project were convinced that leandoes result in performance improvements, wordwould spread throughout the companyof these initialsuccesses. The project leader describes the situationas follows:
Those employees who had been convinced ofthe success of the project, because they sawthat we really changed something, stuck to theconcept of work cells. All other employees didnot understand what we did, and kept their oldwork habits.
Word did not, however, spread quickly as antici-pated. At the time of project cancellation, themindset of employees not yet impacted by theproject was that they had worked effectively with-out lean; therefore, they felt no need to changeexisting processes. Although a few work cells man-aged to survive, lean was not implemented through-out the factory, and the project was considered afailure. The 1997 project leader recalls:
We were very frustrated. With only four workcells and pre-work on others done, we [had]already reduced the costs per manufacturedmachine by 50%. That the project had beenstopped anyway showed us that, even if weshowed results, management has to be madeaware of this fact. If they would have knownwhat we achieved, I am convinced they wouldnot have stopped our attempts.
Having failed at its first try, it would be almost 10years before Machinery Inc. would undertake asecond attempt at lean.
5. Becoming lean at Machinery Inc.:Take two!
In 2006, the CEO of Machinery Inc. initiated a secondattempt at implementing lean. The reasons for thesecond attempt were twofold. First, the CEO was
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convinced that a pull system (seen as a criticalcomponent of lean production) was needed to re-duce production costs and remain competitive.Second, manufacturing was struggling with a vol-ume of orders never before seen in the history ofMachinery Inc. With product demand having dou-bled from2005 to 2006, themanufacturingmanagerwas forced to inform customers that Machinery Inc.would delay delivering orders for up to 12 months.Not surprisingly, the customers were frustratedwith the situation and began looking for alternativesuppliers. Initial discussions regarding the in-creased volume situation led the CEO and seniormanagement to give lean another try, with theexpectation that lean would not only decreasethroughput time by 50% but also reducemanufacturing costs. As part of this new lean im-plementation project, a Japanese consultant–—aformer Toyota employee who had, in recent years,focused his efforts on bringing the lean philosophyto Europe–—became a major source for informationon lean improvement.
Remembering the impact that employee resis-tance had on the first lean attempt, senior managersrealized the importance of getting employees in-volved as early as possible and, as a result, decidedto begin the lean journey using a pilot project. Thecompany decided to focus its initial lean efforts onone particular business unit and process; specifically,the assembly of machines designed for the chocolateconfectionary industry. A major driver for applyinglean to this business unit was that the area hadexperienced a recent spike in product demand,and was having difficulty completing orders on time.The most important criterion in choosing this area,however, was that it promised to be a good provingground: chocolate confectionary machines are lessintricate than many other Machinery Inc. products,and thus this business unit would reduce some of thecomplexities of applying lean. Management felt thiswould improve the chances of initial lean success,and therefore help demonstrate the value of lean tothe entire company.
Recognizing the need to address spikes in productdemand across the entire manufacturing depart-ment, and with the pilot project well underwayat 2 months’ duration, the decision was made toroll out lean to all processes involving the chocolateconfectionary machines. Building upon the pilotproject approach, lean was also applied to theassembly of all other food processing machines(e.g., flour mills), and later to all relevant processesfor these machines. Lean was also implemented inrelated areas such as Treasury and Finance. As aresult, in early 2007, the entire manufacturing de-partment and some processes from other functional
areas were undergoing large changes in order tomake their operations more lean.
To reduce lead times and retain customers, therewas a need to swiftly implement lean. Recalling thefailures of 1997, senior management knew it wascrucial to prevent the decision-making bottleneckwhich occurred during the first project. To this end,they were convinced changes were required ingranting employees the autonomy to make processimprovement decisions. To address this issue, Ma-chinery Inc. established so-called ‘‘just do it’’ (JDI)rooms. These rooms were established for all thebusiness units (e.g., chocolate, grinding and disper-sion, grain milling) that would eventually be in-volved in the lean implementation. Within theserooms, the entire customer order process is dis-played, from the initial request for a product toits shipment to the customer. Each customer order iswritten on a piece of paper with the name of thecustomer, the name of the ordered machine, andthe agreed delivery date. These sheets are attachedto a rope that is fixed at the walls and leads aroundthe whole room. At the wall, 12 milestones and 3go/no-godecisionpoints arenoted, andas soonas therespective orderhaspassedoneof themilestones or ago/no-go point, the sheet is moved forward. Everymorning, an interdisciplinary team meets in therespective JDI room to discuss the status of everyorder and whether problems have occurred that mayaffect a specific order. The discussion starts at thefinal milestone (i.e., outbound logistics to thecustomer) and works its way backward, in order toemphasize the idea of a pull system.
If an individual cannot attend the meeting theymust nominate a representative, who automaticallyhas the same decision-making power. For issues thatcannot be addressed during one of the meetings, atask force is created to address them. Within the JDIrooms, the focus is not to assign blame to a particu-lar person or group, but instead find a solutiontogether and make changes to prevent it from hap-pening again. Given the wide representation inthese rooms, collectively, involved individuals havea macro view of the issue (i.e., how the issue affectsother business units and functional areas), detailedinformation on the issue (i.e., micro view), and realautonomy to make decisions and implement them.
Despite granting increased autonomy to thoseimplementing lean, senior managers at MachineryInc. were hesitant to communicate the tactical andstrategic goals of lean to the entire organization.Having recognized the change fatigue that employ-ees suffered during the first lean initiative, Machin-ery Inc. decided to communicate only a vague goalof what should be achieved during the second proj-ect. At the time, management feared that clearly
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defined tactical and strategic goals could over-whelm employees and lead to boycotts of the proj-ect. As a result, it was decided that the next steps inachieving lean would only be introduced when em-ployees accepted and successfully carried out thecurrent step. A machine assembler appreciated thisapproach and described it as follows:
I liked thatwehadnot been told theoverall goal.Otherwise, some employees would have beenagainst the project from the beginning andwould not have been open to the new solutions.
The leader of worldwide production saw bothadvantages and disadvantages:
Not communicating the overall goal leads toconfusion, but the good employees bring theirown ideas. In the end, the employees are sup-porting the new system because they designedit.
After a few months, managers felt the initialapproach of restricting communication was leadingto a growing fear among employees. The employeesstarted to believe that although a small step wassuccessful, they could possibly be going in the wrongdirection. An employee in planning and controllingstated that:
Some employees had started to fear that even ifthe single steps made sense, they would realizetoo late that they went in a completely wrongdirection by blindly following the small goals.
Recognizing the growing frustration that employ-ees felt about not knowing the general direction oflean changes, senior managers at Machinery Inc.changed their communication tactics. Specifically,6 months into the project, they initiated monthlydebriefing meetings which involved the lean team,senior managers, and consultants on the project.During these meetings, managers were updated onall major lean discussions and issues that occurredduring the month, and what the next short- andlong-term lean steps should be. Managers were thenexpected to communicate to their employees whatwasdiscussed at themeetings andhow itmight affectthem. This new approach to goal disclosure is morein line with the extant literature, which stronglyemphasizes the importance of openly disclosinglean goals versus keeping employees in the dark(e.g., Hines,Holweg,&Rich, 2004; Lathin&Mitchell,2001).
Reflecting on the 1997 lean attempt, managersrecognized that proper mechanisms must be in placesoas topreventemployees fromreturning topre-leanhabits. Thus, throughout the second attempt, anumber of changes were made to ensure this.
For example, the plant setup and resulting processeswere significantly changed, making it harder foremployees to revert back to the old ways of doingthings. In addition, management believed that ifemployees felt responsible for creating, implement-ing, and owning a certain process, theywould stick tothe new process. The company also began to train‘‘lean black belts,’’ an adaptation to the black beltscommon with six sigma. These black belts wereexpected to ‘‘live lean’’ and to spread the philosophythroughout the whole company. The head of custom-er services describes the importance of these blackbelts:
These employees are the so called ‘‘blackbelts’’ which report directly to our CEO. If wedidn’t establish these ‘‘black belts,’’ I am surethat the second lean attempt [would] followthe same destiny as the first lean implementa-tion attempt.
Machinery Inc.’s completely different secondaryapproach to implementing lean (e.g., managementcommitment, employee autonomy, informationtransparency) seems to have worked. Indeed, 14months into the second attempt at lean, managershave seen a number of performance improvementsin the areas of lead time and manufacturing costs,among others. The leader of worldwide productionsummarized the success so far as follows:
In [termsof] productivity,wecertainly increasedquite a lot. Prior to lean, we finished twomachines per week; now, after lean, we finishten machines per week. With the increasein productivity, the resource availability alsoincreased.
The head of customer service added:
Next to an increase in productivity and resourceavailability, we see that employees are willingto develop themselves further and have a highinterest in continuing education. Lean has alsoinitiated discussions in how to increase ourcompetitive advantages further.
With acceptance levels of lean high, frustrationlevels low, benefits of lean present, and formalmechanisms in place to keep momentum going, itappears that this current lean effort will be sustain-able over time.
5.1. Sources of lean success
As stated earlier, we qualify lean success as evidenceofmanagement commitment to, and involvement in,the lean effort; employee autonomy to make deci-sions regarding business process changes; informa-
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tion transparency of lean goals; and evidence ofinitial performance improvements and long-termsustainability of lean efforts. It appears that Machin-ery Inc.’s second attempt at lean has proven to besuccessful. Management has shown active and visiblecommitment to the project from the beginning. Theutilization of JDI rooms ensures employee autonomyin process changes. Although low during the begin-ning of the second attempt, we now witness trans-parency in communication with employees.Machinery Inc. is already seeing the performancebenefits of lean in terms of reduced lead times,increased efficiency, and reduced operating costs.Based on these accomplishments, it appears the leanat Machinery Inc. will be sustainable in the long run.
So, what led to the success of the current leanproject? Summarizing the interview data, a numberof factors were highlighted by employees and man-agers. Both groups emphasized that visible andactive senior management participation in the proj-ect proved a critical cornerstone for success. Thisparticipation helped the employees in becomingconvinced of the necessity of lean. This commit-ment was also important as it ensured that manag-ers stayed involved, understood the challengesfaced, and were enabled to make quick decisionsas needed. The director of engineered productsunderscored these issues:
Top management commitment is a must. Theemployees must see that management is inter-ested in the changes. Without the commitment,employees will not see the necessity to spendeven one minute thinking about the project.
A machine assembler also stressed how manage-ment commitment improved the chances of successof the project:
It was important for us to see that the wholemanagement team, the CEO, and the boardmembers were committed to the project. Itmotivated us to work on the project and to shareour ideaswithothers.Weknewthat ifweneededmore time for the project, it was not a problemto ask for it, because it was top priority.
Illustrating quick lean wins as achieved via thepilot project, as well as the communication of thosevictories throughout the organization, was alsocited as a major factor leading to the success ofthe second lean project. Managers emphasized theimportance of a pilot project which could producespeedy yet tangible results. As stated by the directorof engineered products:
Choosing such a project not only allowed em-ployees to experience first-hand the value of
lean, but also motivated them by giving themresponsibility over the design of new processesand their implementation.
The Swiss-based manager of production concurred:
The employees had been skeptical in the be-ginning, but as soon as they saw that improve-ments really happened, they worked togetherwith the project team. It was important to havesuccesses right in the beginning to motivate theemployees.
Also mentioned as key was formal and visibleemployee autonomy to make quick decisions andundertake business process changes. Reflecting onthe 1997 project, it became apparent tomanagers atMachinery Inc. that employees needed to have thepower to make decisions on lean issues, withouthaving to involve in discussions managers not inter-ested in the issues. The entire decision-making pro-cess needs to be agile and enable process changeswithin a short time frame. Formal mechanisms suchas the JDI rooms addressed this issue by providingemployees ownership of the manufacturing process-es, involvement in decisions influencing the successof lean, autonomy to carry out these decisions and,ultimately, buy-in on the lean project. An employeein planning and controlling, and frequent attendee ofthe JDI rooms, explains their advantage:
Every person attending the ‘‘just do it’’ roomhasdecision-making power to decide directly. . .what to do if a decision is needed. For thingsthat cannot be decided during one of thosemeetings, a task force is created to solvethe problem and an end date is given, until whenthe problem has to be presented in the ‘‘just doit’’ room.
Although responsibility and management of thelean program fell into the hands of managers andemployees at Machinery Inc., the company soughtexternal validation of all lean efforts; this, too,contributed to the success of the project. This exter-nal validationwas achieved through theparticipationof a consultant, whose role was to work with projectmanagers to identify possible lean practices thatcould be used to reach the aspired goals. Presenton-site for 1 week per month, the consultant walkedthrough the manufacturing facility, participated inmeetings, and verified if employees had stayed fo-cused on the lean implementation project. If not, itwas the role of the consultant to assist managers inbringing employee focus back to the project.
The fact that managers listened to employees andwere not afraid to make changes to initial plans alsocontributed to lean success. This is perhaps best
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demonstrated by senior management’s preliminaryattempt to limit the communication of tactical andstrategic lean goals. The head of ITand processes, forexample,was concerned that by only communicatingshort-term lean goals, the overall lean optimizationof the factory might be abandoned as the projectcontinued to move forward. Sensing growing frustra-tion and considering how it might affect success ofthe lean project, senior managers reevaluated thiscommunication approach and changed to open dis-closure of tactical and strategic goals. Hadmanagersnot taken corrective action in the second project,specifically the implementation of monthly leanmeetings and the communication of results to em-ployees, we are not confident as to whether Machin-ery Inc. would be as successful as we see it today.Establishing feedback loops, obtaining feedback onlean activities–—both positive and negative–—andmaking adjustments, if needed, are critical for leansuccess (Lathin & Mitchell, 2001; Liker, 2004).
6. Lessons learned at Machinery Inc.
6.1. Lesson #1: Lean will not succeedwithout visible management commitment
In analyzing the failure of the first project and thesuccess of the second, many lessons can be culledfrom Machinery Inc. which should be considered byorganizations undergoing lean implementation orimprovement efforts. The first lesson is that leanwill not succeed without visible and active manage-ment commitment. This issue was highlighted bynumerous participants, including the director ofengineered products, the manager of productionfor Switzerland, the head of customer service,and the head of detail manufacturing. As evidencedby the 1997 project, such lack of commitment maylead to a host of other issues, including limitedaccess to resources, lengthy decision-makingprocesses, and communication breakdowns. Sansmanagement commitment, employees may not re-alize the importance of lean and how it relates toother initiatives occurring in the organization at thesame time. Respondents in our study made it veryclear that lack of management commitment was thenumber one cause for failure of the first project, anda key criterion in the success of the second. Theseviewpoints closely match the research literature,which has absolutely stressed the need for seniormanagement commitment toward lean success(Crandall & Coffey, 2005; Crute, Ward, Brown, &Graves, 2003; Leitner, 2005; Nash & Poling, 2007).For example, Crute et al. (2003), examining twomanufacturing sites implementing lean, found that
the site with a high degree of management supportsaw lean results 12 months sooner than the site withconflicting management initiatives.
6.2. Lesson #2: Develop formalmechanisms to encourage and enableautonomy
For managers, being visible on the project is onething; enabling employees to make decisions regard-ing lean improvements is, however, quite another.The second lesson that managers should take awayfrom Machinery Inc. is the vital importance of em-ployee autonomy to lean success, something whichmust be supported and enabled via the developmentof formal mechanisms. The 1997 project reflects theeffects of a lack of team autonomy, specificallyemployee frustration, lengthy decision-making pro-cesses, and requests refused that were necessary forlean success. In contrast, the 2006 project was char-acterized by managers who were not only willing togrant employees autonomy, but practices that wereput in place to ensure this autonomy and the capa-bility to make quick decisions as needed.
The JDI rooms represent a critical lean practicepraised by the employees at Machinery Inc. Thissingle mechanism has given employees a sense ofownership over the processes to be changed, and hassignificantly increased buy-in for the project. Themajority of the employees we interviewed felt thatthis was the single best practice for getting themactively involved and committed to lean. Bringingpeople together and giving them the power to makeand implement lean decisions is strongly supported inthe literature (Alukal, 2003; Crute et al., 2003; Hineset al., 2004; Liker, 2004; Nash & Poling, 2007;Schonberger, 2005). For example, Liker (2004) stress-es the importance of building a culturewhich stops tofix problems, in order to achieve lean. Likewise,Alukal (2003, p. 33) suggests:
Creativity before capital. . . .In lean, teambrainstorming of ideas and solutions is empha-sized instead of spending large sums ofmoney oncapital expenditures. People working in the pro-cess are brought together to tap into their ex-periences, skills, and brainpower to generate aplan for waste reduction and process improve-ment.
6.3. Lesson #3: Openly disclose mid- tolong-term lean goals
The third lesson illustrated by the two projectattempts at Machinery Inc. involves the necessityof openly disclosing mid- to long-term lean goals.
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This issue was underlined by many, including aproject leader in information systems, the leadersof international projects and worldwide production,and the heads of the following departments: ship-ping, logistics, quality management, and detailmanufacturing. Initially, management felt thatnot disclosing goals would help to reduce resistance,as employees would not be aware of any potentialin-depth changes which could spark a boycott. Thisblack-box approach is counter to the common man-agement belief that only a full disclosure of infor-mation guarantees success. However, consideringthe special circumstances surrounding MachineryInc. (i.e., change fatigue and a prior failed attemptat lean implementation), this approach was proba-bly the only way to get the initial support of theemployees. Such a scenario may not play out well inother companies, and must thus be approached withcaution. While initially successful, the decision tonot disclose the tactical and strategic lean goalsultimately increased frustration and confusion forthose involved. Machinery Inc. is certainly not theonly company to have ever faced resistance and fearat the hand of less than full disclosure regarding leangoals and activities. Tracing one company’s transi-tion from batch to lean manufacturing, Brown,Collins, and McCombs (2006, p. 12) relate that:
Communication to the employees was the singlebiggest lesson learned. Company-wide meetingswere started after the first three [Kaizen] eventscaused increased tension and job security con-cerns on the shop floor. It is recommended tohave a meeting with the entire work team af-fected by an upcoming Kaizen to dispel rumors,ease tension, and answer questions.
6.4. Lesson #4: Ensure mechanisms are inplace for the long-term sustainability oflean
The fourth lesson is the need to put mechanisms inplace to ensure that lean is sustainable over the longterm. If not, as evidenced by the 1997 project,employees may be tempted to revert to their pre-lean ways. In the first project, only those four workcells in which physical changes were made actuallyremained after the project was terminated. Asregards work cells in which changes were beingdiscussed or were in progress, employees immedi-ately returned to their pre-lean ways. In the 2006project, various respondents (e.g., director of en-gineered products, leader of worldwide production,chief designer, head of ITand processes) highlighteda number of mechanisms that were put in place toensure this would not occur, and that lean at Ma-
chinery Inc. will prevail over time. Such mechanismsincluded undergoing structural alterations, imple-menting self-controlling interdisciplinary teams, as-signing certain employees the task of activelypromoting lean (e.g., lean black belts), and givingemployees the confidence to try new ideas withoutpunishing failure. These kinds of activities havefound support in the literature as helping to achievelean goals (Crute et al., 2003; Nash & Poling, 2007).
6.5. Lesson #5: Communicate lean winsfrom the outset
The fifth lesson is as follows: lean wins need to becommunicated from the outset! Members of the1997 lean implementation team were convincedthat had lean successes been better communicated,there would have resulted increased support fromthe shop floor and managers would have been lessquick to give up on the project. During the secondlean effort, a pilot project approach was taken inorder to demonstrate very quickly the benefits oflean. Once it became evident that the pilot projectwas a success, it became much easier to implementlean in other areas (e.g., different food processingmachines, such as flour mills). Use of a pilot projectto get the company motivated for lean and todemonstrate quick wins is supported in the extantliterature (e.g., Alukal, 2003). Obtaining and com-municating early lean successes is critical such thatemployees across the organization can better un-derstand the benefits of lean, and such that lean willhave a positive impact on the organization. Manag-ers must be continually informed of these early leansuccesses and communicate them throughout theentire organization.
6.6. Lesson #6: Continual evaluationduring the lean effort is critical
The final lesson relates the critical importance ofcontinual evaluation and measurement during thelean implementation effort. By evaluating the leanprogram, managers at Machinery Inc. were able toidentify the need to change from the black-boxapproach to full disclosure of information. The con-sultant provided external validation that MachineryInc. was still on its lean journey, and helped deter-mine corrective action when Machinery Inc. strayedfrom its path. Companies will make mistakes as theypursue lean. Regular program evaluation and checkson lean progress will ensure that these mistakes areaddressed right away, minimizing their impact onthe lean effort. The need for constant analysis oflean progress, obtaining feedback, and reacting onthe feedback is widely supported in the literature
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(e.g., Lathin & Mitchell, 2001), with Liker (2004)highlighting that lean involves becoming a learningorganization via constant reflection and continuousimprovement.
Is the lean adventure complete for MachineryInc.? In short, no. The pursuit of lean is never-ending, and Machinery Inc. is just beginning itsjourney. This article has focused on Machinery Inc.’spursuit of lean in its manufacturing operations. Withits success in this area, Machinery Inc. has takenrecent steps to apply lean to areas outside ofmanufacturing, such as various financial processesand purchasing for its entire global operations. Itappears that, at this large and successful globalmanufacturer, lean will not be slowing down any-time soon. By analyzing the lessons learned at Ma-chinery Inc., senior managers will be enabled totake their manufacturing operations one step closerto the successful application of lean.
Appendix
To explore the two lean projects, detailed inter-views were conducted with a wide variety of indi-viduals from Machinery Inc. Senior managersinterviewed included the director of engineeredproducts, head of risk management and insurances,head of IT and processes, leader of internationalprojects, leader of worldwide production, and themanager of production for Switzerland. Middle andtactical managers interviewed included heads ofdetail manufacturing, assembly, quality manage-ment, logistics, shipping, customer services, as wellas the treasurer and a project leader from informa-tion systems, who was also the lean project leader in1997. Shop floor employees interviewed included amember from planning and controlling, financialservices, detail manufacturing, strategic procure-ment worldwide, as well as the chief designer and amachine assembler.
Questions posed to participants covered theirrole in the lean implementation projects; the mo-tivations to implement lean; the major differencesbetween the two implementation projects; whatthey had learned from the implementation projects;what recommendations they would give other com-panies implementing lean; and what could be doneso that the implementation will remain sustainable.Each interview lasted approximately 1.5 hours andwas attended by two researchers. In addition to theinterviews, the researchers conducted three plantvisits/tours lasting 1-3 hours each, as well as twodiscussion sessions within the business unit to expe-
rience, first-hand, information transparency issuesand how problems associated with current leanefforts were addressed. By conducting site visitsand attending discussion sessions, the researcherswere able to observe company practices, verifyissues/changes discussed in the interviews, andbetter understand how employees were coping withlean and the associated changes.
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