What does "lean" really mean? [page 3]

-- Logistics Management, 5/1/2006

Page 3 of 3 -- It's Not Easy Being Lean

If these companies can do it, why is lean difficult for so many others? Womack and other experts agree that the stickiest point is the complicated work of "Plan, Do, Check, Act" (PDCA), an improvement cycle that consists of proposing a change in a process, implementing that change, measuring the results, and then taking appropriate action. "The cyclical PDCA grind requires people. It requires commitment and tenacity," says LeanCor's Martichenko.

The Plan part of the cycle creates a particularly daunting challenge: In order to develop a logistics network of the future, a company must accurately map its current network. Managers who expect that exercise to be a breeze quickly change their minds when asked to provide a single, integrated file of all suppliers and relevant data. Then there is the issue of who "owns" different budgets: Is the transportation spend under manufacturing or procurement—or is it owned by the supplier?

When the process reaches the "future plan" stage, a different set of questions crops up. What if the freight charges are bundled with the price of the parts? How will costs change if we put the supplier's carrier on a milk run? For that reason alone it is crucial that a lean logistics initiative have the full backing of a senior manager who spans several functional areas.

It is not necessary, however, to wait for a green light from the top. Any manager can begin with a small-scale analysis of what an operation would look like if it could be perfectly leveled; that is, if the weekly output could be evenly spread out during each working day.

Another early step, says Martichenko, should be to look for waste in the supply chain. He urges managers to draw from the "Five Ss" principle (five Japanese terms that describe practices that are conducive to lean production) to identify and purge obvious clutter—obsolete inventory, for instance.

Value-stream mapping is another critical step in the beginning stages of a lean logistics initiative. Process mapping is not a new concept, but lean applies it with particular rigor. Georgia Southern University's Karl Manrodt relates the success story of a company that brought all of its relevant functional groups together and had them sketch out and post their process maps for public review. Team members and other employees reviewed the maps and pointed out numerous duplications in processes. Through this simple and open approach, the company was able to eliminate steps that did not produce value and get widespread buy-in from employees, says Manrodt.

Is Lean For You?

Womack urges those who are interested in lean to visit facilities where it's already in use. Logistics professionals, he says, will quickly spot differences between a lean operation and its typical counterpart in everything from inventory levels to transportation scheduling. The challenge will be to apply what they see to their own operations.

There's no single, foolproof method for doing so, and that can make even seasoned pros uncomfortable. "Managers are desperate for a paint-by-numbers kit. They don't want to have to take the risk. But another company's reality is not yours," Womack cautions.

His advice is to approach lean as a pilot project that will generate useful data for many parts of the organization. Two things are most important for a successful test, he says: scientifically running an experiment where results can be measured against inputs, and gemba (making direct observations where value-creating work occurs).

Once there are initial results to demonstrate, the next step is to start selling the lean concept to colleagues and senior managers. Although it may not be easy, it can be done, says Top-Flite distribution chief Jude Prych: "Once people see the benefits and impact of the changes, they are more open to the process."

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