Why do Lean initiatives fail in some organization?

• Lack of CEO and Top Management involvement
• Not educating or creating awareness about Lean and its purpose
• Delegation to down without support
• Changing priority based on the production volume
• Not understanding the Big picture of organizational problem and prioritization
• Keen on technical knowhow of tools and not on implementation
• Lack of people involvement or engagement
• No Indepth implementation of tools
• Lack of facilitation and patience
• Aversion to experimentation and trial

Misconception about Lean

There are some misunderstandings about lean and its application .Some of the misconception about lean are

• Lean means cost cutting

No.Cost cutting means cutting down the expenses whether it is essentially required or not .Lean focusing more on cutting down the waste or unnecessary expenses, which is not adding value to business

• Lean is for manpower productivity

Partially true. Lean is focusing on waste elimination or reduction in any form like man, machine, material, and method. By eliminating or reducing wasteful activities in format, manpower, material, machine, or process efficiency is improved. Hence, it is not only on manpower productivity alone.

• Lean is applicable for manufacturing organization only

No. As said, lean is all about waste elimination. As long as activities are there in any organization, waste will be present .Wherever waste is there, Lean is applicable. It is not only applicable for manufacturing.

• Lean can be implemented only in large organization

No. One of the assumptions is that implementing lean requires investment and only large organization can afford lean. Actually, understanding the lean concept, tools, and techniques is easy and does not require investement.Lean thinking and practices can be implemented in any size of the organization. In fact, Lean can be easily implementable in small and medium scale organization because of its size and activities involved.

• Lean is all about 5S and Visual Boards

No. Most of the people think that doing Housekeeping (5S)  and putting display boards is lean manufacturing.Ofcourse fundamental requirement for waste elimination is housekeeping , ie keeping the workplace in order ,but that alone is not constituting Lean system. Lean is beyond implementing housekeeping practices.Similary visual management is one of the elements of lean system in which display and control boards are part of it. Hence, Lean is beyond 5S and visual boards or even it is beyond any lean tools and techniques. It is philosophy and way of conducting daily management.

• Lean is for during lean seasons

One of the most misconception is that lean implementation is for not peak season as everyone is busy with activities and lean is for during lean season. Lean is nothing do with the busyness of people either peak or lean period. Lean is for waste elimination or reduction. In fact, implementing and practicing lean concepts during peak period may give more savings.

• Lean can be useful during recession

Same as above assumption. There is no right time as recession or booming economic environment. In fact, if Lean is understood well and lean thinking is implemented internally, external factors will not affect the organization much

• Lean is only for automobile and ancillary organizations

No. As said, Lean is nor for specific to any industries. Wherever there are activities involved, Lean can be implementable. Why it is popular in auto and ancillary industries is that the lean concept was evolved and tested first in auto industries.

• Lean  implementation is time bound

No. No organization can claim that they implemented lean system thinking ,because fundamental of lean is zero waste, zero accident , zero defects and it is impossible to achieve and thus it calls for continuous improvement or excellence journey .Lean implementation is a process or journey .. It is not a destination.

What is Lean and Lean Manufacturing ?

         Lean is achieving “More with LESS”. It means achieving more with given resources or  achieving more with less resources .Mainly it is elimination  or reduction of waste .

         Lean manufacturing system can be understood by relating to the human body. If the person is lean means general understanding is that he/she   is free from unnecessary FAT in the  body, hence free from unnecessary side effects  like BP, Pain in joints, laziness etc.  And the person is perceived as healthy, more flexible, active etc.. The same way if the  Lean manufacturing  means , manufacturing system  is free from unnecessary fats like high inventory, high rejection, high breakdowns or line stoppages factors etc  which leads to more flexible in delivery, less lead time ,First time right , low cost of manufacturing and free flow of communication etc .

         Similarly, Lean System  or Lean Organisation means  free from unnecessary waste in the entire value chain starting from extended supply chain  system to  customer, even after sales service system .

Lean system Thinking is more than application of Tools and Techniques. It is a culture  or a way of working  or mindset of  everyone working for the organization.

How effective are you on managing assets?

         One of the factors for profitability is how you are managing the assets effectively. The assets can be your machines, buildings, facilities and of course your people. Let us discuss the depreciating assets like machines, equipment, and facilities. Effective utilization of asset helps you to serve your customer on time and best cost.In turn, it ensures the profitability. If you are not managing the assets well, you are incurring overhead cost of capital depreciation as well as on revenue expenses like maintenance, consumables, and power. It is the prime responsibility of business leaders to ensure he gets a high return on asset investment.

        Some of the pitfalls in managing the assets effectively

1. Only concern on utilization, not on efficiency
2. Not  much attention on basic maintenance activities
3. Poor management of spares and consumables
4. Idle time taken as granted as way of working
5. Lack of training on usage of assets

Some of the indicators of poor asset management

Ø  Frequent breakdown

Ø  A Long machine idle time for setting up of tools / fixtures

Ø  More accidents and unsafe practices in and around  facilities

Ø  Actual production  output not matching with standard output

Ø  More rejection on produced output

Ø  Not able to release the facility for preventive / regular maintenance

The solution is that first understand where you are  in the overall effective utilization of facilities, then  understand the causes for the losses and write counteractions. Be aware of your revenue generation capability  per hour from your facility in line with market condition. That will bring many insights!

Why 1-1 coaching is required for CEO or Business Head ?

            Any transformation in the organization starts with leadership at the top.People follows the leader.Once the leader changes his mindset, beliefs, values, behavior and aligns the action in line with the higher needs, the entire organization starts follow. Even though the leaders are aware of the transformation process from various sources like books, training programmes, interaction with successful people etc still the real change should happen within. For some people, it is difficult to inculcate new thought process and evolve from self.They need trusted external source to guide and facilitate the transformation process with personalized format.The coaching process helps the leader at personal level to get transformed.

                                      

When 1-1 coaching is required:

When the leader wants to take the organization to the next level and willing to make it happen, but there is a gap between what he wants and what he is now.The 1-1 coaching process will help the leader to bridge the gap through personalized support   and professional help.

The following benefits the leader gets during the coaching

• Clarity on what  he really wants to achieve
• Knowing more about the self  in terms of strength, area for improvement
• Identifying the beliefs which are holding or pulling down from achieving goals
• Identifying the behaviors which are affecting the growth
• Getting personalized help to convert the limiting beliefs into empowered beliefs
• Getting hand holding during the change management process
• Getting a constructive critique  on behavior which affects the growth 

Who has to change first for transformation ? Leaders or Employees?

            Most of the small and medium organization wants to transform the organization for breakthrough growth. Breakthrough growth happens only when there is radical thinking and execution happens on the way it does business on a daily basis. The person at the top thinks that people working for them have to change for transformation. However, the truth is first the leaders have to change their mindset, beliefs, and action for breakthrough growth. Transformation starts within or from inner to outer world. The organizational culture or the way it behaves is largely dependent on the leaders. People tend to follow the leader.

           First, it requires for a Leader like CEO or Head of the organisation. They need to change their beliefs towards transformation. They need to get convinced  about the need, the process of change  and its management.Once they mentally prepared for transformation, the team or employees need transformation  on beliefs and the process of change management.

           Hence the organizational transformation requires both leaders and employees  transformation

Are you running your business effectively?

Answering to the question of whether you are running your business effectively, most of the business leaders connect to profitability. If the profit is moderate, then they think   that they are running the business effectively. However, profitability is one measure, and consistent profitability is a function of many parameters.

On a dipstick level, we can measure the effectiveness of running the business effectively. Some basic measures are the indicators of the effectiveness.

Customer order fulfillment: 

                     Customer order fulfillment is one of the most important measures of your effectiveness i.e. How you are servicing your customer’s requirement on time every time. Meeting the customer’s demand on time with 100 % fulfillment guarantees to some extend about your business's longevity. Servicing the customer’s requirement is the reflection of your internal process robustness and the culture of the organization. In most of the small and medium size companies, meeting the customer requirement itself is the biggest concern.Inability to service the customer on time would eventually affect the profitability and survival. Fulfilling the customer’s requirement is hygiene factor that should not be compromised. If you are delivering the customer’s requirement on time and every time, then you can assume that you are running the business effectively.

Quality target fulfillment:

             In today’s competitive environment, delivering the product or service with quality requirement is assumed as a way of living from the customer’s perspective. Meeting quality target is a reflection of your internal quality assurance and control systems. One of the major irritant from the customer‘s point of view is delivering the products with inconsistent quality. If you are meeting customer‘s quality target with your internal quality control and assurance system, then you can assume that you are running the business effectively.

Cost Efficiency:

 You may be meeting the customer’s delivery, quality target, but if you are not making decent net profit, then you are not effectively managing the business. The reason could be your cost of running the business may be more than the revenue. Creating the surplus in the form of profit is vital for long term sustainability of business. Cost efficiency reflects how you are running the business effectively.

People engagement:

Ultimately, people working for the organization are a real asset and they determine the growth of the organization. If the people engagement is high, eventually it drives better order fulfillment, quality targets, cost efficiency and safety environment. If the loyalty and employee engagement is high, then you are running your business effectively.

   Relook your organizational existing customer service level,quality targets achievement, cost efficiency and people engagement level to assess your effectiveness level of running the business effectively.