January 05, 2019

Why Do LEAN Initiatives Fail?

Rick Worley
Senior Business Advisor/TriMin Systems

Share This Post

Throughout my years of consulting for many manufacturing and distribution organizations, I am surprised by the number of these companies who fail to realize the cost savings and process improvements promised through the implementation of LEAN and other trend du jour initiatives.  The concepts of LEAN are certainly solid and very logical but why do some LEAN implementations work, and others fail?

Based on my experience and training in LEAN and other initiatives I have observed a few common traits that differentiate the successful and not successful LEAN efforts.  These traits that yield a successful deployment of LEAN are also very simple and logical, but they seem to be missed all too often.  The following are the three elements to the process that I have seen put in place for those organizations that have and continue to realize a benefit from the promises of LEAN.

  • There is a clear definition of how results will be measured
  • There is a demonstrated support throughout the organization for the improvement efforts
  • Improvements are focused on their impact to the total system
  •  

MEASUREMENTS

 

I have experienced numerous examples where there were reported reductions in the number of resource hours required to perform a task that was improved through a LEAN event, yet the headcount didn’t change or, in some cases even went up.  The management team sees these reports but doesn’t see the tangible results in bottom-line performance and eventually loses confidence in LEAN.

The organizations that have successfully deployed LEAN establish both clear expectations and measurements that will be used in the implementation of LEAN improvements.  Typically, the tangible improvements will manifest themselves in either a reduction in material (usage or cost) or a legitimate reduction in headcount.  The successful organizations will demand any improvements be delivered with a process by which the improvement will be measured and tracked and budget reduction expectations for the following year.

 

SUPPORT

 

Those organizations that simply provide lip service from the management team for a LEAN initiative are bound to fail based on numerous observations.  The successful organizations will have both words and actions baked into their implementation of LEAN.  Examples of how this communication and commitment is made this will vary based on the organization but some more memorable cases involved providing ice cream for the factory and having the senior management present what the initiative has delivered and how it impacts costs and competitiveness.  Some scenarios have had cash bonuses paid out to the LEAN team and/or annual awards for highest impact projects.  The common denominator is that the improvement message is delivered by the senior management and involves the entire organization or facility.

Ultimately the key is to ensure the importance of the initiative is being communicated up and down the organization and the improvements realized are clearly communicated as to the overall impact to the organization.  This communication regarding the overall impact of the initiatives is especially important when the results of the initiative will potentially mean a reduction in workforce.  Failure to plan for this messaging will often sabotage future initiatives as the workforce will be reluctant to participate.  Another obligation of the senior management team is to investigate other ways to increase the top line that result from an initiative.  This too should be a tangible goal and should be baked into annual budgets. 

 

TOTAL SYSTEM

 

While there are several areas in an organization that can benefit from various elements of LEAN initiatives, the identification of LEAN events should be focused on improving the constraint of the system.  The constraint, as defined by the late Eli Goldratt, is defined as anything that limits an organization’s goal of making money.  Any improvements to the process should be first focused on the constraint.  Many of the LEAN failures I have observed have been a result of not focusing the improvement areas on the system’s constraint.  If a process is improved in an area that is not the constraint, the real impact of the improvement is never realized since the constraint can only process at a certain rate.  Often a failure to focus the improvement on the constraint will build inventory in front of the constraint or create worker effectiveness issues after the constraint.  Focusing all improvements on the constraint should continue until the current constraint is no longer the real constraint.

Understanding the entire upstream and downstream impacts is a crucial part of using the Value Maps that are created for the processes, but it is also important to ensure the Value Map is inclusive enough of the total process to avoid unintentional effects.  It is often possible to improve one process and simultaneously "break" or impede an upstream or downstream process by not taking all processes into consideration.

 

SUMMARY

 

There are many subtle techniques that have been used to implement LEAN principles, but these three legs of the bar stool provide the firm foundation needed to implement improvements throughout the organization. 

Comments? You can contact me directly via my ExecRanks profile.

Share This Post