Professional Documents
Culture Documents
WORLD CLASS
MANUFACTURING 2002
LEAN MANUFACTURING SURVEY REPORT
in association with
Sponsors’ contributions
MCP - Gaining through good maintenance 48
Benchmarking Oliver Wight - The journey to excellence 50
Comparisons show what is
possible and stimulate us to Papilio - Aiming high 52
do better
Page 32 Productivity Europe - Overcoming learning barriers 54
www.deloitte.co.uk
JOURNEY TO EXCELLENCE
Oliver Wight is a worldwide consultancy with offices throughout Europe, in North and South America and the
Asia-Pacific region.
At the leading edge of management thinking and practice, our unique ‘integrated business management’ model (IBM) lies
at the heart of client journies to business excellence. The IBM model addresses all aspects of company planning and
execution from the boardroom to working levels in manufacturing and service sectors. It provides one common agenda for
your company with one set of figures and one set of priorities. It links diverse processes in managing the extended supply
chain, product and customer portfolios, customer demand, and strategic planning into one seamless management process.
The renowned ‘Proven Path’ process for change management lies at the heart of our approach to ‘integrated change
management’. This integrates your strategic journey to excellence through major project management to everyday
improvement programmes ensuring they are visible and contribute to company goals. This process promotes rapid change
through line ownership for successful ongoing management, accelerating management processes and controlling waste
and variability.
Your implementation is supported by our practical experience and knowledge through facilitation, coaching and education,
backed by our unique ABCD checklist, the longest established business excellence assessment tool.
www.oliverwight.com
The first phase - the mass assembly era - was based on the production logic of Customers are also
economies of scale. This gave way to the quality era in the 1980s, which funda-
beginning to exert their
mentally reoriented business toward continuous process improvements and the
elimination of waste.
bargaining leverage to
The quality era is now evolving into what we call the era of the virtual customer. influence price and are
Customers are deciding what, when, where and how they will purchase goods and
demanding products and
services. Customers have virtual access through cyberspace to more products and
services than ever before and they are using smart systems to help them make more
services in ‘zero time’.
informed, personalised choices. Customers are also beginning to exert their bargaining To satisfy customers,
leverage to influence price and are demanding products and services in ‘zero time’. To
manufacturers will require
satisfy customers, manufacturers will require a fundamental shift in executive mind-
sets and organisational cultures. Manufacturers must eliminate traditional boundaries
a fundamental shift in
between customers and integrate more closely with them. This means partnering with executive mind-sets and
customers and emphasising the co-ordination of research and development (R&D),
organisational cultures
marketing and manufacturing. Successful manufacturers will integrate the customer
into the fabric of their organisation. Leading manufacturers anticipate change and
possess the flexibility to quickly adjust their strategies. As they expand into new
markets and confront new competitors, the leaders recognise that they must be able
to react to changes in a highly uncertain environment.
Even more so, top performers are proactively changing the rules of competition to their
advantage, and to their rivals’ disadvantage. New wealth from manufacturing is being
created more by adaptability, value-added services and speed of execution than by
sheer quantity of capital or technology. This new state of manufacturing means that
functionality to ERP applications to capture and integrate key customer information into
strategic planning. Forging alliances with domestic and overseas partners, as well as
outsourcing, are also strategies to improve supply chain integration. More and more,
manufacturers are outsourcing logistics and support services, such as information
services management and software development, in order to focus on their core
competencies.
Align the organisation to compete in the 21st century: The imperatives for the 21st The study provides strong
century - globalisation, product innovation and supply chain integration - all require a
evidence that investment
fundamental shift in executive mind-sets. Operating successfully on a global scale
requires companies to re-evaluate their traditional strategies, from sourcing and in knowledge assets
production to distribution and marketing and customer service. It requires continuous underlies the superior
change - change that encompasses the entire organisation, from business process
performance of the
capabilities to people. More than two-thirds of all manufacturers in our study have
undertaken major organisational initiatives in the recent past. Past efforts to market leaders
restructure, streamline and downsize are now giving way to a focus on changing
corporate culture that impedes fast response. In short, the name of the game is speed
and flexibility.
Leading executives are preparing their organisation to rapidly respond to increasingly
unpredictable changes in customer demands and market dynamics. Although the
processes targeted for re-engineering vary by region - North America (information
systems), Europe (business planning and logistics management), Asia-Pacific (finance
and accounting and customer service) and Latin America (logistics) - the focus is clearly
on improving flexibility and customer responsiveness. The study provides strong
evidence that investment in knowledge assets underlies the superior performance of
the market leaders. Market leaders have re-engineered their human resource functions
and are now investing in workforce management programmes that promote high-
performance work teams, improve cross-functional training and facilitate worker
empowerment - ultimately creating a culture that thrives on learning and change.
Market leaders are seeking competitive advantage on multiple levels. They are
establishing early-mover advantage and putting their stake in the ground in target
markets around the world. They are shoring up their arsenal of capabilities and
investing in technology, best practices and people. The leaders are recasting their
enterprises to improve new product development, create a customer-centric
orientation, tighten supply chain links and harness the knowledge assets of their
organisations.
Conquest Business Media’s Industry White Paper programme, produced under the auspices of its
flagship magazine The Manufacturer, is a series of high level publications targeted at decision-makers
throughout UK industry. They are a compilation of original research findings and editorial analysis of key
developments in manufacturing processes, information technology and communications. Each
publication aims to inform and assist senior management; helping them to make the most appropriate
decisions for their companies and so maximise the benefits of emerging technology, services and
applications.
As an extension to the White Paper Programme, Conquest has already launched the Annual
Manufacturing Report (AMR). This initiative is designed to measure and monitor changes in key issues
and factors affecting UK manufacturing industry across a very broad range of subject matter, including
the economy and general economic conditions, the role of the Government and its various support
agencies, and overseas influence and threats. The AMR identifies key areas of capital expenditure, and
measures change in major capital investment categories. It measures the extent of focus on change and
improvement in key business processes and techniques, and identifies the extent to which initiatives
such as customer relationship management (CRM), supply chain management (SCM), and change
management is being embraced and planned for the future, and the degree of focus on new product
development (NPD).
Now, in late summer 2002, The Manufacturer commissioned Coleman Parkes Research to carry out its
first Lean Manufacturing Survey. This delivers a unique insight into the extent to which lean
manufacturing has been embraced in the UK, how its principles and tools are perceived, and exposes
the key issues that inhibit its uptake. Its findings are accompanied by expert analysis, opinion and
discussion about the UK’s progress on the road to world class manufacturing.
EXECUTIVE SUMMARY
• The survey shows that the awareness level of lean is very high. Although 26 per cent are partially in
the dark, these are mostly small companies, and awareness is universal in larger organisations.
However, this result is an overestimate of the general situation, as companies that were completely
unaware of lean were dropped from the study.
• Those aware of lean have an adequate view of what its focus should be, but too many focus on cost
reduction rather than the other issues involved.
• Manufacturing companies are focusing on a wide range of key issues some of which are not easy to
achieve. Customer focus is a universal aim, and just-in-time, reducing time to market and supply
chain management are perceived to be much harder to attain for many companies.
• There is evidence of a change starting. Many companies are focusing on process re-engineering,
material flow management and time to market. But when questioned open-ended, they summarise
this as cost reduction.
• The level of collaboration with suppliers and customers is remarkably high, and this reflects the drive
to focus on customer activity and reduce costs down the supply chain. But knowledge and information
flow down the supply chain is not as extensive as these findings would lead us to be believe. Too few
companies know how far their suppliers and customers have advanced with lean manufacturing,
which indicates that collaboration is not truly transparent.
• When looking at the advantages of lean, far more respondents focus on the cost reduction benefits
than on improvements in the process and material. This reflects a clear financial focus, and perhaps
that cost reduction is easier to report than improvement in other activities.
• Company culture is a big issue when considering implementing lean manufacturing, and people -
related problems such as attitude of the staff and opposition to anything new, all feature as barriers
to be overcome.
• Many companies feel that lean is achievable in the short term - a strong statement for manufacturing
industry.
11%
500+ 26%
1 - 99
30%
250 - 499
33%
100 - 249
Pharmaceutical 8%
Electronics 14%
White goods 4%
Engineering 34%
Packaging 5%
Food and drink 6%
Printing equipment 4%
Chemicals 5%
Automotive 6%
Telecommunications 6%
Other 8%
Awareness
“Have you heard of the term lean manufacturing?”
No
26%
Yes possibly
8%
Yes definitely
66%
The majority of respondents had heard of lean manufacturing. Those who answered ‘no’ here, were later
found to be aware of the processes and concepts of lean manufacturing, and therefore continued with
the interview. Smaller companies are slightly less likely to have heard of the term than their larger
counterparts. Companies in the pharmaceutical and white goods sectors are more likely not to have
heard of the term.
Respondents were asked to rate the importance of key lean manufacturing principles and
how difficult they would be to achieve within their own companies
Mean score is out of five
Note: figures will not total 100% as some respondents declined to comment on some criteria.
The most important attributes to the success of the company include total quality management, efficient
materials flows, reduced product cost and a policy of continuous improvement. From these results it
would appear that manufacturers are focusing on the core issues in the sector at present, producing
high quality product at lowest cost, with a focus on continuous improvement.
Although total quality management is highly rated as a core attribute, 40 per cent of respondents feel
that it will be at least quite difficult to achieve. 50 per cent feel that JIT will be at least quiet difficult to
achieve with 25 per cent reporting it will be very difficult. Almost one third of companies feel they have
already achieved efficient information flows and a further third feel that it will be easy to get there in the
short term, while nearly half of all companies feel that low stock levels will be harder to achieve.
38 per cent of companies are already focusing on cost control and a further 25 per cent feel it will be
easy to achieve. Customer focus is an issue that manufacturing feels it has managed well in the past,
with 45 per cent claiming to be customer focused and a further 21 per cent saying it will be easy to
achieve. However, one third still feel that it will be hard to manage and these are typically smaller and
medium sized businesses.
A policy of continuous improvement was rated as a key issue for manufacturing in general and only one
third of companies feel that they have achieved the appropriate level of control in this area. 33 per cent
of organisations still feel it will be at least quite difficult to achieve.
45 per cent of companies feel it will be quite or very difficult to achieve real improvements in supply chain
activity, a surprising figure given the focus on supply chain activity over the past couple of years.
Two in five companies feel that it will be easy for them to achieve efficient material flows and
approaching half of those sampled feel that reduced time to market will be at least quite difficult to
achieve. This may mean that they have already taken time out of the product development process and
that saving even more time will be very hard indeed. However, only 18 per cent of companies feel they
have actually reduced product time to market as far as they can.
Interestingly, 31 per cent of companies feel that it will be easy to reduce product cost, but they have
not yet done it! 15 per cent stated it would be very hard, perhaps because they have cut costs to the
bone already.
62%
Pharmaceutical
23%
67%
Time to market
19%
None 62%
Don't know
Little/no importance
6%
11%
2% CUSTOMERS
Planned within
next 12 months
79%
Already developed
Don't know
Little/no importance
8% SUPPLIERS
2%
17%
Planned within
next 12 months
69%
Already developed
Nearly 80 per cent of those questioned claim to have well developed strategic collaboration in place with
customers, while almost all of the rest will have them in place within 12 months. This emphasises the
current focus on customer retention and development throughout manufacturing in the UK. As
expected, strategic collaboration is seen as very important by the majority of those questioned, with only
a very small minority saying they are of no importance.
Strategic collaboration with suppliers is also significant with two thirds of companies claiming to have
well developed collaborative relationships, and a further 17 per cent see them as a short term focus.
Again, all companies except a very few, feel that the relationships are of great importance.
“To your knowledge, to what extent are your customers actively pursuing lean
manufacturing principles?”
12%
Not appropriate 21%
Most are well
down the road
25%
Unknown
21%
A few are well
down the road
7%
8% 6%
The questions on customer-based lean manufacturing have elicited split opinions. Worryingly, 25 per
cent do not know if any of their customers are focusing on lean activity (yet they claim close
collaboration) and 12 per cent feel it is not appropriate for them. Nearly one quarter feel their customers
are well on the road to following lean manufacturing principles, while a further 21 per cent say most are
down the road. But the level of awareness is poor overall, given that these companies have been
following customer focused activities and claim very close collaboration with their customers.
Among those known to be down the lean manufacturing road, there is common consensus that the
main areas of focus are cost reduction and supply chain management, the latter being focused on
reducing cost in the supply chain and improving collaboration. A minority are focusing on time to market.
“Thinking about all the various aspects of lean manufacturing we have discussed, how
beneficial do you think applying lean manufacturing principles in your company would be”
17%
Not at all beneficial 1% Not sure
Not very beneficial
5%
20%
Quite beneficial 57%
Very beneficial
There is common acceptance that lean manufacturing can be highly beneficial. 77 per cent said that
such an approach would be at least quite beneficial, and among those who knew enough to have an
opinion, the view is almost universal.
“What advantages would you expect to achieve from applying lean manufacturing
principles?”
Based on the 77 companies seeing lean as beneficial (spontaneous responses)
As can be seen, the most common benefit of a lean approach is cost reduction. Other key benefits, but
ranked much lower than cost reduction, include better delivery times, increased efficiency, better
product quality and improved customer satisfaction. Generally, companies seek a number of key
advantages from a lean approach.
At the moment, how close is your company to being a lean manufacturing company?
We've achieved
Lean Manufacturing
Never likely to be 2%
12% 3%
Not at all close Do not know
22%
4% Very close
25%
Not very close
32%
Quite close
As can be seen, only three per cent of companies feel they can be called truly lean-based manufacturing
businesses while 22 per cent feel that they are very close to achieving the standard. Nearly one third
have made good progress to date but have some way to go, while over one third (including those who
did not know as they are likely to fall into this category) have a long way to go to meet the standard.
The main barriers that were seen as preventing the adoption of lean principles were the investment
needed to go down the lean route and more importantly the culture of the company. Couple this with the
attitude of the staff, which we can take to be negative towards the approach, and it is clear that people
- based issues cannot be ignored when looking to apply lean manufacturing principles. Almost one third
of respondents claim that they do not really understand the approach or its potential benefits.
“Which of the following phrases best describes how you feel about lean manufacturing?”
24%
A realistic goal to aim for
but not in the short term
45%
A realistic goal and we aim to get
there within 12 months to 2 years
It is interesting to note that only 14 per cent of companies feel that lean manufacturing is great in
principle but hard to achieve in practice, indicating a strong desire to create change in manufacturing.
24 per cent felt that lean is a short term goal while getting on for half feel that the goal is realistic but
will take up to two years to achieve. Generally, there is common acceptance that lean is a key issue that
must be embraced in the short term to remain efficient and competitive in a global marketplace.
However, there are many barriers to overcome before lean can be successful in all companies, the most
concerning is the cultural barrier.
t is now 20 years since Richard Schonberger and Robert Hall wrote the two books
I which effectively launched lean in the west. It is over 10 years since Womak, Jones
and Roos wrote their seminal book naming the approach ‘lean’. Huge changes have
taken place, yet for the majority of organisations the lean potential has hardly been
scratched much less mined.
A recent Engineering Employers Federation (EEF) report gave a good indication of the
status of lean in the UK. Interesting findings included:
• Around 30 per cent of organisations surveyed were undertaking lean in
the whole organisation, 10 per cent were just using lean in manufacturing, but
around 40 per cent had no plans for lean
• EU owned and in particular US owned companies have greater uptake of lean than
UK owned companies
• Large firms (500 employees plus) have a far greater uptake of lean
• The most popular of the lean tools and concepts is to do with suppliers and the
supply chain
• Companies that have started lean initiatives have almost invariably shown large gains
Although the EEF report gives an excellent overview, there is a danger that lean is
thought of as a box of tools to be implemented cherry-pick wise (this from the author
of ‘The Lean Toolbox’!). No doubt some tools used individually have given good results.
The problem is that it is an end-to-end value stream that delivers competitiveness. A
great cell feeding into a morass of poorly controlled inventory is waste. A changeover
reduction programme in a high capacity area is waste. A 5S programme without follow
through into standard attainment is largely waste. Kanban working in a situation of
unlevelled demand can be waste. And so on. Even if all these were sorted out though
good value stream mapping and a well-directed kaizen programme, lean may still fail
to deliver its true potential.
One frequently hears that lean is about waste - it is, but it should be more about waste
prevention than waste elimination. This is just like the total quality concept of trading
the costs of prevention against the costs of inspection and internal and external failure.
Spend more on prevention, but far less on failure and inspection. Russell Ackoff talks
about resolving problems (by discussion), but better is solving problems (by fact-based
scientific study), but best of all is dissolving problems (by tackling root causes). Non-
lean practitioners resolve ‘inefficiencies’, beginning lean practitioners solve problems
to remove waste, but the experienced lean practitioner dissolves waste.
Lean beginners go after waste. This is appropriate given the high levels of waste in Lean often begins with the
most value streams. Although there will always be another layer of waste to
mechanical, but since
address, the more experienced need to return to value - to the first and second
lean principles of customer and value stream. Like the quality concept of quality of
piecemeal benefits are
design and quality of conformance, waste elimination or prevention is but one half of small, executives may
the total picture. Rethinking the value side is at least as important. This leads to
decide to abandon the
seeking out new opportunities.....
Mechanical lean is the implementation of lean tools in a piecemeal fashion. Managerial
lean initiative, having
lean is the implementation of lean tools in an integrated manner. Innovative lean burned their fingers - in
means taking lean beyond the shopfloor, beyond the organisation to create new
time, if not money. Worse,
opportunity, new value, and new customers. Lean often begins with the mechanical,
but since piecemeal benefits are small, executives may decide to abandon the lean
they may even claim to
initiative, having burned their fingers - in time, if not money. Worse, they may even have “done lean - and it
claim to have “done lean - and it didn’t do us much good”. In the mid 1990s more
didn’t do us much good”
powerful tools were rediscovered - value stream mapping, policy deployment, and the
new type of improvement events - and there was increased recognition that lean must
be built on a sound foundation of 5S and standard operations. These enabled a more
systematic, more balanced, and more efficient approach.
But innovative lean is altogether another matter. Here the question is what business
and product opportunities does lean create - like Vision Express and the one-hour pair
of spectacles, like home breadmakers, like South West Airlines breaking the rules of
established carriers. In these examples the customer is primary. Waste reduction and
value enhancement is for the customer, not the producer. There may be no greater
waste than cutting waste for the producer while increasing it for the customer. Stand
back and look at the customer as the ‘object’ of one-piece flow. Line up the stages in
process order so that the customer can benefit - then use lean concepts of waste,
cells, changeover, pull, small machines, OEE and so on to contribute to customer value. Lean principles are
To understand lean, it is important to understand a whole series of different concepts.
universal. It is merely a
Water, for example, is a liquid at normal temperatures. Its constituents, oxygen and
hydrogen, are gases. You can never understand the properties of water by studying question of the extent to
oxygen and hydrogen. Likewise with lean and lean tools. Lean is a system - more than which other concepts can
the sum of its components. Systems are in constant interplay with their environment -
add to the central
where the boundary is not obvious. Systems adapt continuously but at a faster rate
when threatened, like ant colonies. Systems evolve - like bugs combating insecticides. developing core of lean
The Toyota Production System (TPS) grew through revolution and evolution. Revolution
rejected the concepts of mass production and economies of scale, and steered the
organisation. Evolution developed the details and the tools. When TPS began there
were few lean tools - most developed from first principles over several decades, but
fitting in with the top-level concept. Lean ideas developed from first principles; Taiichi
Ohno believed in developing managers by asking tough questions rather than providing
answers. This is in line with the practice of Hoshin or policy deployment, whereby top
management sets the strategic direction but evolves the detail, level by level, by a
process of consultation. In the reverse direction decisions are taken locally, only
migrating upwards in exceptional circumstances.
Today large ERP systems, with data warehouses are ‘in’. In lean we have learned about
the waste of centralised inventory warehouses as opposed to strategically located
supermarkets. The world has learned about the failure of over-centralised economies.
But during the late 1990s many manufacturers moved in the opposite direction by
implementing large centralised systems - at great cost and often with mixed results.
Today’s need is for fast reacting distributed decision-making. There is a case for
centralised strategic decisions, but for operational decisions, the lean way is to deal with
schedules, maintenance, quality, cell design and even some aspects of design and
supply at a localised level. This is not only more effective, but also more human.
Build to order was once the only way in which products were made. Then came mass
production that gave wide access to products but not to individual preferences. Mass
customisation held out the promise of both, but lean concepts are at last making mass
customisation a reality. Dell has been a pioneer, and the three-day car study has
worked through the barriers that are in the way. But no doubt lean thinking and
appropriate flow-based IT systems are about to make quick-response build to order
(BTO) a reality in whole new industries.
Finally, lean is core to all of this. Hopefully the days of arguing between “lean and agile”,
“lean and APS”, “lean and six sigma”, “lean and theory of constraints”, “lean and
manufacturing strategy”, and the practice of including a chapter on lean in operations
management textbooks, is passing. Lean principles are universal. It is merely a question
of the extent to which other concepts can add to the central developing core of lean.
John Bicheno is director of the MSc programme in lean operations at Cardiff Business School,
and author of The Lean Toolbox, Cause and Effect Lean, and The Quality 75
t’s a puzzle. Examining lean management trends among 604 of the world’s best
I known publicly held companies, shows the UK on top by a large margin. And what
of Japan, lean’s birthplace? Dead last.
Lean is many things, of course, but the amount of stocks carried is a good, visible
measure of it. Hold lots of it and you’re fat, little and you’re lean. The leanness studies
which I have been collating since 1994, are based on companies’ financial statements.
(The actual calculation is turnover, or cost of sales if available, from the income
statement divided by value of inventory from the balance sheet; it’s what the
accountants call inventory turnover.) They examine many-year trends, not last year’s
1980s US automotive and electronics industries had begun to react - first by learning
and applying the lean, total-quality management methods perfected in Japan, and
then restructuring to shed resources that could not cut the mustard. The next arena
was the UK which, well before the Continent, had lowered its trade barriers.
Straightaway, Japanese automakers set up shop in the Midlands, and Japanese and
American electronics companies did so in Scotland. The response of domestic
producers was the same as in the US: crash diets.
The leanness studies yield plentiful other overall findings, including a ranking of 34
sectors. Among the leaders are automotive components and electronics/electrical
products. No surprise, since these industries form the heart of Japan’s export
juggernaut, which set lean in motion. At the bottom are food retailers and distributors,
textile and apparel, food/beverage/tobacco producers, and petro-chemicals. In
petrochemicals, capital-intensive equipment spews forth day and night with low
regard for demand. At least that would be their excuse for not getting lean. The
grocers, 34 out of 34, have no such defence. This is the industry that pioneered bar-
code scanning, which captures item sales data that is nearly sharable in real time with
supply-chain partners. Their stock movements, one might think, would be as
synchronised as a ballet troop’s. So, Sainsbury’s and Tesco, and Associated British
Foods, what’s the problem?
This is not saying that the study findings are conclusive. While the vast majority of
companies are privately held, this research covers just publicly traded ones. The
companies studied, though, are among the largest and best known. They also must
be competitively strong. Otherwise, they cannot attract enough interest in the
investment community to issue shares in the first place, and cannot hang on in the
second place. The failure of such large numbers of these companies to sustain a lean
trend must be seen as looming competitive weakness. It used to be that weak
companies might survive for decades. No longer. The open global economy exposes
companies to surprise attacks from upstarts near or far.
To those exposed, the message here is brief: If your company claims to have lean well
in hand but has not maintained improving inventory numbers for at least five or
10 years, you probably don’t. The solutions are not so new, and not confined to
operations: Tear down the silos, elevate training, link up externally, involve everyone,
and make the measures of performance job-related so as to touch each employee’s
work life. Above all, install discipline to make sure that lean is not here and there, not
a flash in the pan. It is not very lean if it does not stick.
Dr Richard J Schonberger, president of Schonberger & Associates of Bellevue, Washington,
is author of Let’s Fix It! Overcoming the Crisis in Manufacturing (Simon & Schuster/Free
Press, 2001). He was awarded the British Institution of Production Engineers’ 1990 International
Award for an “Outstanding Contribution to the Advancement of Manufacturing Management”
and inducted into the 1995 Academy of the Shingo Prize for Excellence in Manufacturing.
Weekly schedule
1st & 15th Every friday
of month
10000 Kg Pb 80,000 +ve 40,000 +ve 900 pcs 900 pcs 300 pcs
14 days 100,000 -ve 50,000 -ve 3 days 3 days 1 day
OEE = 38%
C/T = 12sec C/T = 5sec C/T = 58sec C/T = 72hrs 3 people 40/pallet
C/O = 2hrs C/O = 4hrs C/O = 2hrs OEE = 82% 10 part # 2 people
A/T = 420m OEE = 71% A/T = 420m A/T=1200m A/T=420m A/T=420m
before they’ve looked at their business from a value stream perspective. Inevitably Those manufacturers that
what happens is you end up putting a lot of energy and resource into improving parts
have used value stream
of a process that should not even be there in the first place. This has an adverse effect
on the sustainability of the lean approach in the business and a tendency to say you’ve
mapping claim to have
done lean rather than are lean.” halved lead times, doubled
In short therefore, what value stream mapping allows you to do is continue to take waste
stock turns, made huge
out of the business while simultaneously avoiding a lot of wasted effort on isolated
improvement activities that have little or no impact.
leaps in labour productivity
Those manufacturers that have used value stream mapping claim to have halved lead and reduced administration
times, doubled stock turns, made huge leaps in labour productivity and reduced
and co-ordination roles in
administration and co-ordination roles in weeks rather than months or years.
So what about the real evidence? The Manufacturing Institute has been assisting a
weeks rather than months
range of manufacturers - large and small and across a variety of industries - with the or years
value stream mapping approach.
Using the support of a master practitioner from the Institute, CHK Engineering, a
Cheshire based manufacturer of high-quality metal fabrications, used the Value Stream
Mapping technique to reduce lead times from six weeks to two days, reduce stock and
W-I-P by 70 per cent and to introduce cellular manufacturing, in less than six months.
Says Alan Pinkney, managing director at CHK: “Value stream mapping enabled us to
quickly analyse our operation and pinpoint what we needed to focus on for greatest
impact. Through value stream mapping it became clear that we were holding excess
stock due to overproduction and scheduling changes. We also previously thought that
lack of capacity was an issue for us but we quickly discovered that we did in fact have
sufficient capacity to manufacture to order and in a much shorter lead time than our
current one.”
CHK manufacturing director Greg Pointon adds: “The Value stream mapping project
also had a positive impact on the workforce. Through involving people from different
levels and across the organisation we have noticed that staff now feel more valued. The
approach has created a great team spirit within the company.”
A cross functional team comprising continuous improvement, planning and customer
service, production, and supply chain personnel from Akzo Nobels Akcros Chemicals
plant in Eccles, joined the Manufacturing Institute’s How 2 value stream map
programme - a practical and action-based programme that combines coaching,
‘learning by doing’ and practical application to the business situation. The programme
coach is also on hand to give advice and guidance. Says Terry Hill, site manager at
Akcros: “We had already introduced many changes at the site and a radical cost
reduction programme was underway. Value Stream Mapping has provided us with a
challenging new focus and will support and supplement our cost reduction activity. It
has re-focused our thinking and will enable further improvements in performance to be
achieved while at the same time improving our overall level of customer service.”
The Manufacturing Institute can be contacted on 0161 872 0393 or by email info@tpmi.co.uk
eing overtaken by a Smart car on the motorway the other day was an experience
B that took me through a number of emotions. There was the sheer disbelief. I have
only just upgraded my own car. One might expect the odd Jag or Beemer to fly past
but a Smart car was not in my thinking. Then came the urge to do something, before
I had thought whether this was really sensible. So I chased after him and overtook him
back. My plan that I had set out with plenty of time and did not need to hurry was
ignored. Having reacted, I then could not slow down again. I was on a course
determined by events. I arrived 30 minutes early and, for my sins, waited in a lay-by
with time enough to think how silly this all was.
I had my own view of the order of things. The comparisons I was making came from
standards set within me. In our world we are used to advertisers using comparisons
to spur us on. We believe that if it is possible to have whiter clothes on the line then
we should. We target fresher food, and the latest technical bells and whistles, lower
costs, and faster, better service.
Comparisons have a major impact for us too in building new visions of expectancy and
aspiration at all levels of the organisation. They add to our own picture of what is
possible and stimulate us to do better.
More importantly the reverse is also true. As much as our knowledge opens new
horizons for us, we are fundamentally constrained by what we do not know. Few of us
have the imagination and ability to come up with new ways of doing our business
without some sort of stimulus.
Sadly the stimulus is often the burning platform. It is a current crisis that gives the
imperative to achieve quickly. We usually do achieve, uniting for a brief interlude the
directors, managers and our people.
The burning platform may be the golden key to introduce rapid change, but it is a blob
of putty in unlocking lasting gains and long-term improvement. When we achieve the
goals to put out the fire we heave a sigh of relief and take the plaudits. But without
greater vision performance flattens out and eventually tails off. Look inside and outside your
Conversely most journeys to business excellence borne of vision do sustain them- industry to those where the
selves and companies do continue to improve and stay in front of the competition.
fiercest competition is forcing
Comparison is at the heart of all this since, if we don’t quanitfy differences we won’t
understand why they exist. Without understanding, how will we create rational plans the pace of change and
and actions to achieve excellence? For comparison, substitute the word improvement
benchmarking. I do not know of a top performing company that does not use some
form of benchmarking to understand its competitive position and continually build and
develop its vision and strategy. Such companies also use benchmarking to
demonstrate to their people at all levels what is possible, and to set goals and targets
with them.
So where do we start in using benchmarking as a catalyst for our journey to
excellence? First comes the voyage of discovery. As companies in the pursuit of
excellence, we have to actively seek out the possible. It will not come and seek us.
For a start, try reading. Magazines such as The Manufacturer are full of stories
and case studies. Add selected books and university papers and a different world
starts to unfold.
Then it helps to touch and feel. Look inside and outside your industry to those where
the fiercest competition is forcing the pace of change and improvement. Be prepared
to look outside manufacturing to understand what is the best. For instance the most
advanced financial practices are in the financial industries.
Thirdly know your market place. Talk and listen to your customers and your suppliers.
They will know what is happening in the sector and they will also know whether you
are in front or behind your competitors. Where are the customers’ priorities on their
journey to excellence, and who do they see as their long-term partner?
Now through intelligent conversation agree what is possible in all that you have found
and the opportunities this presents to your business. There is little sense in a new
vision that drives actions that do not tangibly improve the business. Especially manage
any people above you not involved in the discovery. Some years ago a very senior
person in the glass industry would not accept a target for his operations of
12 stock turns, and the grounds for this were: “tell me someone in the glass
industry that has done it”. But there is no point in a vision that someone else has
already achieved.
With the vision set, we have to sell it and plan the action. If your people do not
understand where you are going they cannot contribute. We constantly underestimate
what our people can do if they understand our goals. You will need an active
programme to get them involved in their own discovery. Get them on best practice
visits (try the DTI Inside UK Enterprise service). Send them to conferences and user
groups (the Oliver Wight Proven Path is one of the best and longest running of these).
Confront them with figures from the many university databases (try Cranfield), and
with excellence checklists. Set clear objectives before people go on a visit and debrief
the real lessons afterwards.
Lastly from the vision set your own priorities from the maturity of your own company.
Set in place the foundations on which all other improvements rely. Try these questions:
• do your people own what they do and its continual improvement in all parts of
the business?
• do your people stick to the proper process working consistently whoever is doing
the task?
• does your top team have one clear agenda, with one set of figures and one clear set
of priorities?
• does your company plan work properly in all parts of the business and then un-
compromisingly work the plan?
If these are issues for you then look for experiences showing practices such as 5S and
TPM for ownership, ISO 9000 for consistency of work, and integrated business
management to get planning and integration right. Do not be bound by your factories.
Excellence is the business of the whole business and of the whole supply chain.
Next look to see successes in step changing performance in your targeted areas. Do
Do not be bound by your you know an excellent company that has not actioned lean and process acceleration,
factories. Excellence is driven quality to the highest levels and targeted agility?
These initiatives are all company wide and people oriented. The big gains we make in
the business of the whole
business come mainly from behaviour change yet it is in this area that we invest the
business and of the whole least. Education is vital to improving understanding and without understanding there
supply chain is no real action. At the working level ask whether your people are properly educated
to do their jobs well. Can they tell you what is world-class for them in their role and
how companies exploit this? Don’t get deflected by the cost of the best education, ask
how much ignorance is costing you every day.
All of this is benchmarking. Benchmarking is finding out the possible, finding out how
to do the possible and stimulating action to get in front and stay in front of the
opposition. Benchmarking is not a one-off exercise but a constant way of life that
continuously extends knowledge, horizons and of course targets and goals.
BUSINESS OBJECTIVES
CRITICAL SUCCESS FACTORS
POLICIES VALUES
MAINTENANCE OBJECTIVES
ROLES AND ACCOUNTABLES
INFORMATION SERVICES
An effective strategy will
• Asset register
• Technical data set the ground rules for
• Computer system
• Audit reports how maintenance is
• etc
managed and delivered in
an organisation, this in
Each of these elements must be considered in the context of the plant operating turn will result in
conditions, performance and regulatory requirements. Implementing the strategy will
substantial benefits which
drive best practices while laying the groundwork for achieving excellence in equipment
and maintenance performance. will directly impact on
A typical strategy will include the following: production output and
Generic maintenance strategy model
profitability
In the last 10 years maintenance performance has improved in some areas, for
example: a reduction in fire-fighting, increased asset productivity and improved record
keeping, but there are still areas of concern including conflict between maintenance
and production, integration of CMMS with enterprise resource planning (ERP) systems,
focusing attention at high level changes in manufacturing strategy without considering
the need for improved equipment reliability.
Benefits
• maintenance expenditure reduced • equipment life extended • capital expenditure
postponed • spare parts expenditure reduced • increase in utilisation of craft force
• reduced equipment failures • more production output • reduced energy costs
Typical industry benefits
Pharmaceutical - maintenance costs reduced by 30 per cent
Healthcare - £2.4m from improved equipment efficiency
Food - savings of £50,000 per day
n little over a decade, advances in supply chain management have transformed the
I way that many manufacturing businesses operate. The impact has been huge. But
the period of greatest change may still be ahead of us.
The focus of supply chain management is changing from the effective movement of
goods, to a more challenging mission: redefining the whole manufacturing process.
Functions that were once routinely handled in-house are now routinely outsourced to
parts of the supply chain that are supposedly better equipped to perform them.
Why design parts and components in-house, runs the argument, when those parts
and components can be better and more cheaply designed by the companies that
manufacture them? Why shoulder the entire risk in a new product or project, when
effective supply chain management allows that risk to be shared collectively between
the businesses that make up the supply chain? And why - most radically - manufacture
in-house at all? Why not simply outsource the whole business to a third-party
contractor, leaving you free to concentrate on brand management and marketing?
It’s a compelling notion, in a world where exploiting a core competency, whether your
own or that of a supply chain partner, can bring new products to market faster, more
cheaply and more reliably.
Accenture’s research(1) shows manufacturers are moving towards collaborative
working and outsourcing. In one study, over two-thirds of European manufacturers
surveyed had implemented a collaborative product development (CPD) initiative. A
separate study into the automotive industry continues the trend with suppliers and
original equipment manufacturers (OEMs) looking to outsource production and move
upstream into new areas of revenue creation.
Some leading companies such as Dell, Cisco and Sun have challenged the art
of the possible and prospered in this arena. But problems lie ahead for those that
seek to emulate them, particularly in businesses less attuned to the risks and
decisions involved.
Let’s look at some of the risks. The lead time for the capital infrastructure required for With 50 per cent of the
such a project is often longer than the engineering design and prototyping that is
budgeted hours or
needed, so it’s the provision of capital infrastructure, and the investment that requires,
that often becomes the critical path constraint. resources consumed, one
The trouble is that the investment decision has to be made and funding put in place, might imagine that there’s
before the product has completed its design stages, but most companies are loathe to
50 per cent of the task left
commit funds and resources until they see an order.
Another obstacle often surfaces at this early stage of a collaborative or supply chain to perform. In the real
outsourcing project. The decision has been made; the investment capital sought, and world life isn’t so simple
from the engineering and manufacturing perspective it’s all systems go. But beware:
in many cases, this additional capital will be far bigger than most capital investments
the company has made and will have strings attached.
Financiers and venture capitalists will want seats on the board or, at the very least,
strict financial controls and management information. Few companies have either the
experience in dealing with this kind of external scrutiny, or the collaborative project
management and financial systems that external investors want.
In such cases, a common pitfall is the estimate-to-complete calculation. With 50 per
cent of the budgeted hours or resources consumed, one might imagine that there’s
50 per cent of the task left to perform. In the real world life isn’t so simple: resource
estimates to complete a project are notoriously hard to get right. At the management
level, it’s possible to be relaxed about an over-run - but from an external investor’s
perspective, the viewpoint is less sanguine.
The next trap for the unwary is where a customer or supplier is experiencing trouble.
Instead of supplying widgets, they may be supplying whole assemblies, and finding it’s
trickier than it looks. Costs are high, delays and quality problems endemic. Most
purchasing functions, for example, are designed to place orders, not manage service
providers or project-manage arm’s length ventures, so you might never spot the
problem, until it’s too late.
The underlying point is this: in collaborative supply chain projects, the risk profile is
different. A chain is as strong as its weakest link. And that link can be hard to spot.
espite the decline in the total number of people employed, the manufacturing
D sector remains the foundation of our economic productivity, and much of what we
have learned about work organisation and employment practice comes directly from
manufacturing. It’s hard to believe that once work was organised around the Fordist
model where the focus was on mass production, rigid bureaucracy and hierarchy.
In today’s manufacturing world, the model, while still concerned with efficiency, is much
more about being versatile and flexible with work organised around smaller scale
operations. The best manufacturers have recognised that success is about offering
customers exactly what they want and in some cases going beyond expectations.
But we know that we have not come far enough. Manufacturing may still be the jewel,
but in many companies the shine has gone as they struggle to compete with the best
in the rest of the world. They may operate on post Fordist lines - but they have not yet
stepped up to the next stage: a radical rethink of work organisation.
The manufacturing workplace is greatly changing for the better - from an environment
of top down control and hierarchical organisation to one of teamworking and flat
structures. But the consensus within business and government is that these new
styles of working are not happening quickly enough.
People management is critical. It can apply strategies and practices that enhance the
value and contribution of employees. Here the move is from traditional disciplinary and
personnel administration to a model of strategic human resource management. But
above all this is a management challenge - the ability to exploit the knowledge and
creativity of people must become a mainstream capacity for anybody with a
responsibility for leading others.
The business model that has people at its centre has three central tenets: leadership, Effective leadership
employee engagement and continuous learning. At first sight these three strands
galvanises the creativity and
appear straightforward - but dig a little deeper and we can see why companies are
failing to grasp their importance. These people practices need to be understood, put in enthusiasm of employees,
place and managed in a systematic manner, but if unco-ordinated, they will fail to leads to new solutions,
make a significant impact on business results.
faster use of technology,
In the HR profession these practices fall under the collective term of ‘high performance
working’, and were designed to drive organisations toward higher performance, to lift more and superior
them out of the ‘me too’ world of supply-led, mass production. An approach that is applications and delights
often underpinned by competing on cost alone - and one which is doomed to fail as
customers
long as there are overseas manufacturers delivering at lower cost.
Leadership is often misunderstood to be a quality needed only by those at the top of the
organisation. In fact leadership means that everybody in an organisation takes
responsibility and makes a contribution to the success of the organisation. It is the
most single critical component in the high performance workplace.
Many companies fail to link management development with the organisation’s overall
objectives; whatever route an organisation looks to pursue, leadership and
management development must be in sync with its aims.
Effective leadership galvanises the creativity and enthusiasm of employees, leads to
new solutions, faster use of technology, more and superior applications and delights
customers. It must become a mainstream skill in our manufacturing sector - without
it, companies will find themselves without the capacity to deliver long-term success.
The second tenet, employee engagement, is perhaps the toughest nut to crack. Getting
employees on-side and contributing because they want to and are motivated to do so,
is a preoccupation of most HR departments. In the manufacturing sector, the
traditional ‘them and us’ culture, while no longer rooted in the conflict that
characterised earlier decades, is still an undercurrent for many employers.
The Chartered Institute of Personnel and Development (CIPD) has spent many years
examining the mutual expectations that employee and employer have of one
another. It is based on trust. Many employers pay lip-service to this contract, by saying
the right things, some go further by doing the right things and some ignore it and just
get on with the business of production. The survival instinct is what drives them. But
they ignore it at their peril.
Many of the expectations, such as fair treatment, just reward for labour and a certain
level of job security, are informal. In an ideal world they would not be left to chance, but
in most organisations the psychological contract works by unplanned and intuitive
means. This is fine - as long as it is positive. But companies that damage the
psychological contract are doing irreparable damage.
People come to work to do a good job and contribute. In return they expect their bosses
to provide leadership, to help them grow and develop and treat them like adults.
Another critical aspect of employee engagement is consultation and communication.
When individuals are confident that their views are taken on board, they are much more
likely to contribute willingly.
The knowledge that companies have inadvertently encouraged employees to keep to
themselves is increasingly where critical value lies. Getting at this knowledge,
maximising it and putting it to work is the 21st century work challenge.
Of course, all organisations have formal and informal groups brought together
temporarily to complete a specific project or work together on a long-term basis. But
creating a knowledge sharing culture involves taking a systematic approach to the use
of such groups.
Finally, the third tenet, continuous learning, is an essential characteristic of the high
performing workplace. It is the development of workplace learning in the context of
Employees are no longer
new competitive pressures. Research also shows that if companies want their people
hired hands who leave their to make the contribution that sets them apart from the competition, they must ensure
creativity at the factory gate. that individuals are given work which they find stimulating and satisfying as well as
being given the opportunity to develop the skills to do this work well.
In progressive companies
Progressive companies are recognising that learning in the workplace should also
they are highly skilled, embrace many less-formal activities - team development, action learning, knowledge
flexible and fully sharing and knowledge management. These activities occur in the workplace day by
day, as people learn on the job, perfecting their skills, finding new ways of working
contributing associates
sharing knowledge and passing on skills to fellow workers.
We now have proof that a planned approach to people boosts performance in
manufacturing. The CIPD report, The Impact of People Management Practices on
Business Performance finds that 18 per cent of variations in productivity and 19 per
cent of variations in profitability are accounted for by people management practices.
Employees are no longer hired hands who leave their creativity at the factory gate. In
progressive companies they are highly skilled, flexible and fully contributing associates.
Good people management holds the key. It is not a silver bullet - but it’s the only way
to stand any chance of a sustainable, successful future.
John Philpott is chief economist at the Chartered Institute of Personnel and Development
aintenance has always been a dirty word (with little attention risen from 79 per cent to 82 per cent while availability remained at
M paid to it) in most organisations, except to use it to achieve 85 per cent and machine utilisation increased from 40 per cent to
cost savings by reducing maintenance budgets. With the rush 54 per cent. The average value of overall equipment effectiveness
towards a lean environment companies must now consider how to (OEE) of 40-50 per cent found in UK factories is a long way from
manage their physical assets in a much more effective way. Good the best performers at 80-90 per cent. This latter figure highlights
asset management including maintenance will pay dividends, with the fact that most companies have spare capacity that they
benefits to the business of 10-15 times the current mainten- probably don’t know exists within their plant.
ance expenditure. MCP’s own data from organisations participating in the AMIS
The MCP sponsored Boardroom Report of 2000 identified that programme also shows that while there has been a significant
certain features of maintenance management had not significantly increase in tools and techniques and the use of computer systems,
changed since a previous survey in 1991. A comparative ranking of overall equipment performance and efficiency have not substantially
‘causes of dissatisfaction’ within maintenance departments changed.
identified ‘conflict with production departments’ as the main source Before rushing out to buy a CMMS or embrace lean manufacturing
of concern in 1991 and 2000. If this is such an issue how can lean it is important to get the basics right. The basics in this context are:
manufacturing be successful? • A clear purpose and objectives for maintenance
Lean manufacturing seeks to use less of everything by eliminating • Effective technical strategies for equipment reliability
non-value-added waste in the production stream and driving down • A strong work planning system
batch sizes. Lean manufacturing is about making what customers • Good spare parts management
want to the quality and quantity they require. How can you deliver • Accurate cost information
these customer needs without a close look at maintenance and the • Use of key performance indicators and continuous improvement.
important part it plays? If the machine breaks down and there is no The development of an effective approach to maintenance follows
spare part and few skills to repair it - what do you do? You have no a three-stage methodology: assessment, development and
stock of finished goods to send to the customer so you have an implementation - shown in figure 1.
unhappy (and perhaps lost) customer. Lean manufacturing The assessment step involves understanding the current status of
requires a total business approach, which considers physical maintenance and equipment performance. This can be achieved
assets and their management as a key element for its success. through the use of the DTI recognised AMIS audit service. From
Major organisations such as Glaxo SKB, Cadbury, Nestlé, and this evaluation an action plan can be developed, this plan will
Johnson & Johnson now recognise that maintenance is a key include all or most of the activities identified in the develop-
element of their businesses and they have clearly defined strategies ment/planning stage, that is, work planning, equipment strategy
in place that enable maintenance to support their manufacturing etc. This will require the development of methods, procedures and
operations. In terms of plant performance, machine efficiency has ways of working. These are best developed with the people who
LEAN MANUFACTURING
Evaluate Work planning
MANUFACTURING EXCELLENCE
current state
Cost Manufacturing
management improvement
Action plan Spare parts
management Standardised
processes & Cost
procedures avoidance
Operator asset
care/TPM
Develop site
road map
CMMS Consistent
implementation ways of
improvements working
will be using them, so a team approach is recommended. Finally, such values may seem unbelievable they are readily available within
there is implementation. It is at this point that the benefits will be a matter of months. Improving maintenance can generate increased
generated. By adopting a total approach looking at both main- profitability, but taking a total approach will provide benefits and
tenance systems as well as equipment and production methods, the savings which will cover the initial investment many times over.
benefits stream will be much greater.
For example, by improving work planning an increase in craft
BEFORE RUSHING OUT TO BUY A CMMS OR EMBRACE
utilisation will be achieved. But how do you turn this into hard cash?
By looking at equipment changeovers, running speeds, packing LEAN MANUFACTURING IT IS IMPORTANT TO GET THE
methods and machinery design, the savings can be obtained BASICS RIGHT
virtually immediately with little additional cost. Improving
maintenance systems will produce benefits in the medium term.
Improving machine and equipment management will produce
benefits in the short term. How do you measure these benefits?
Perhaps the easiest way is through the use of OEE (overall
MCP Management Consultants Ltd
equipment effectiveness). If a business with a turnover of say 2 Holt Court North Aston Science Park Birmingham B7 4AX
£50 million working three shifts has an OEE of 50 per cent, by Tel: 0121 693 9313
raising the OEE value to 75 per cent it would be able to produce an Email: info@mcpeurope.com
Web: www.mcpeurope.com
additional £25 million worth of sales or reduce by one shift. Whilst
UNDERSTAND
VISION, CREATED
BENEFITS
SIZE OF GAP
DISCOVERY
FUTURE &
DEPLOYMENT
PLAN
REDESIGN IMPLEMENTATION REALISATION
ALIGNMENT
TO VISION LEARN BY DOING EARLY BENEFITS
0
need an established management process. The longest standing of 3. Use an integrated change management process to bridge
these is the Oliver Wight Proven Path. between the company goals and the actions taking place
This is a process proven over hundreds of cases, all over the world, throughout the organisation.
taking you on a specified journey from discovery, through design, and 4. Enlist expert support in coaching and facilitating at all levels. You
into implementation. Applying the right support, education and should not pay for armies of bright young consultants to redesign
knowledge at the right time fast tracks companies to radical new your business for you. Help your people at all levels to help
ways of working. themselves. Planned education and facilitation changes the per-
Thirdly, within each project there is tremendous opportunity to step ceived boundaries, shortens the time for success and substantially
change performance of a team or a business process with lean and changes people’s views of what is possible.
agile thinking. We need to stimulate people to design their own Integrated change management is the surest and fastest route to
practical new ways of working which fit with the gains and plans success, driving change from the top. With the overall direction and
elsewhere in the business. The familiar path goes from brainstorming goals firmly in place it provides co-ordinated action throughout the
to designing and implementing a new value streamed process. organisation, and full line ownership.
All three elements of integrated change management have things in
common. They contain their own journeys from discovery to action AS WE GET MORE SOPHISTICATED WITH BETTER AND
at different levels of the business. They revolve around the use of
FASTER TOOLS AT OUR DISPOSAL, THE IMPACT OF OUR
people’s knowledge and understanding. They require clear ownership
and engagement by line managers from top to bottom of the
PEOPLE GETTING IT RIGHT OR GETTING IT WRONG GETS
organisation. They are better for independent knowledge-based GREATER AND GREATER
facilitation and coaching.
So what are the lessons for companies embarking upon change?
1. Understand the role and value of people in change management.
Ensure that you give full weight to the people issues in the
Oliver Wight EAME LLP
integration of tools, processes and people.
The Willows The Steadings Business Centre Maisemore
2. Support line people with education as well as training. Education Gloucester GL2 8EY
extends their understanding of what is possible and what you Tel: 01452 397200 Fax: 01452 397230
intend and want to happen. Education is the most undervalued Email: email@oliverwight-eame.com
www.oliverwight.com
factor in change management.
Overcoming learning
barriers
Malcolm Jones, director of Productivity Europe, examines the pivotal role of learning in the road to world
class manufacturing
n the huge literature on World Class Manufacturing - some of it lay at the root of 95 per cent of their production issues. It has been
I excellent, some mind-numbingly tedious - one book by a Japanese noted that the fundamental difference between craft and mass
researcher has inspired me in recent years. Takahiro Fujimoto’s book production is the existence of process standards in the latter.
The Evolution of a Manufacturing System at Toyota is different not Unfortunately, this often passes us by, with the result outlined above.
only because it is based on interviews with the people who developed Routinised Learning is the existence of standardised problem
the Toyota Production System, but also because of the evolutionary solving methods which were consistently applied as part of the
framework which actually makes sense of how TPS happened. production process. This was the basic QC story approach. If
Fujimoto’s theory explains how TPS evolved out of the vision we want to give routinised manufacturing combined with
of Kiichiro Toyoda, coupled with routinised learning a name, then
the drive and experimentation of we can just call it kaizen, contin-
Taiichi Ohno, and how it is uous improvement (Ohno told
still evolving today. It is able to do Fujimoto that he told workers
this, not because Toyoda and that if they did not improve the
Ohno had a fully fledged system of process, then they were stealing
lean manufacturing which they money from the company!).
implemented, but because they Opportunistic Learning, on the
had ideas and concepts which other hand, is the capacity to
they experimented with, and some learn through experimentation,
of which proved to have which is much of what Ohno did
competitive advantage in their in the 50s and 60s. Protected by
particular situation. the Toyoda family, whose vision he was enacting, Ohno was able to
So when people, particularly consultants, propose to ‘implement a almost literally ‘see what works’, and because of the routinised
world class manufacturing system’, I tend to get a little twitchy. culture at Toyota, he was then able to spread successful
From my perspective, Toyota became pre-eminent in the manu- innovations more quickly and consistently throughout the
facturing sector not because it had lean manufacturing, but because organisation. Opportunistic learning created the innovation, but
it was able to learn. Fujimoto in fact identifies three capabilities: routinised learning helped maintain it.
Routinised Manufacturing is simply the fact that it had a culture Ed Schein, another famous organisational psychologist, notes that
based on process standards. I have literally lost count of the change happens when learning anxiety (our fear of trying
number of times problem solving teams have reported that the root something new) is less than our survival anxiety (our fear of the
cause of problem x was traced back to the lack of a process consequences of staying the same). Others have noted that
standard. One major UK plant reported that a ‘standards’ problem learning ability is the only sustainable competitive advantage (I