Trim the Fat
An Essay on Applied Lean and Change Management
This reflection paper was written in response to a Lean workshop for my Value Chain Integration course at SacState.
Lean is a philosophy and framework that can be applied to production and various types of operating systems. Formalized by the Japanese company Toyota, the goal of the theory is to eliminate waste, maximize productivity, improve quality, and reduce costs—overall contributing to a successful business. In this paper, I will go through basic lean concepts—as discussed in the workshop with Mike Gerow and the MBA280 textbook, Operations and Supply Chain Management—then go deeper into the biggest hurdle of adopting lean, change management.
Lean is not just an applied framework; it is a shift in individual perspective and an opportunity to frame business action, holistically. Each macro output is only as good as the micro behaviors within. Lean enables success by considering what the total throughput is, how to ensure everything done adds value to the customers, and how to eliminate waste for the company. Successful lean operations will have leadership buy-in and a champion(s) that brings the philosophy to the forefront of decisions and processes. Culture and desire need to be in place for lean to enable a business’s success.
Lean has many handy ways to recall the different ideas behind the philosophy. One is the House of Lean. Imagine a house that consists of a foundation, pillars, and a roof. The concepts of lean, the pillars that hold the house up, are continuous improvement; leadership visibility, alignment, and accountability; and curiosity, humility, and respect. Lean is built on standardized processes, connections, and flows—the foundation of the house. These structures hold up the roof of the house, or the ideal state of quality and profit.
Drilling down into lean operations, one can find concepts, like 5-S or seiri (sort), seiton (set in order), seiso (shine), seiketsu (standardize), and shitsuke (sustain). These 5 words set the mindset for all action within a lean system. Sort means each item is in its proper place. Set-in-order indicates that items are easily found. Shine is a clean work area. Standardize is to formalize procedures and practices. And sustain is to implement training, communication, and organizational structures. An example of 5-S can be promoted through subtle but effective workplace signals like visual controls—using color and other cues to draw attention to important areas or items that need attention.
Concepts like continuous flow can be used to optimize processes to reduce waste—this concept is unique in that large batches are processed at each step and then passed on to the next step, as a batch. Alternatively, a batch can consist of a singlepiece, which allows for more agile and inexpensive switching between products.
Primary ideas of lean that enable success are the focus on continuous improvement and quality. Operations are in constant motion and so are the people, materials, and environments that make up those processes. Inspection, analysis, and control of work is necessary to keep up with change, problems, and waste. Through continuous improvement, these occurrences can be managed to guarantee that the specifications of quality and profit are upheld. Muda is the Japanese word for waste. The handy acronym TIM WOOD can be used to describe areas where muda occurs. Transportation, inventory, motion, waiting, overproduction, overprocessing, and defects. When waste occurs within any of these activities or phenomenon of operations (and people), success of the business is hindered.
Objectively, lean looks great. In practice, lean can be a huge project to take on, especially when trying to apply the philosophy and practice in an established business or organization. There are events and workshops that specialize in promoting lean thinking, such as Kaizen events and A3 workshops, that can help define culture and teach people. Ultimately, for a company to meet its goals, leadership needs to set the direction and define the culture of success.
In Harvard Business Review’s “The Lean Service Machine” by Cynthia Karen Swank, the author dives deep into Jefferson Pilot Financial (JPF), an insurance and life annuities firm, and its use of lean to transform the service business in the late 2000s. The company had many problems that required re-work, wasted time, and inconsistencies. These problems resulted in significantly poor performance.
JPF started their change process by building a model cell. A model cell is taking a portion of the business and turning it into a microcosm of the new process(es). By doing this, the company can test and iterate in a controlled environment, while creating curiosity and excitement in the organization—this anticipation helps to pave the way for the broader transformation.
The business unit that JPF chose was a ten person team, making it small enough to remain agile but was also diverse enough in its services to represent the full range of JPF’s operations. The model cell set up small batch flows of policy applications and applied the following seven lean practices: placing linked processes near one another, standardizing procedures, eliminating loop-backs, setting a common tempo, balancing loads, segregating complexity, and posting performance results.
JPF measured their performance and productivity with metrics that took the customer’s perspective. Instead of measuring the time from when an application arrived at the processing center to the when the policy was approved, printed, and bound; JPF measured from when the customer submitted their claim to when the advisor received the completed policy—this aligned with the customer’s perspective.
JPF also measured leadership’s success based on the aggregate metrics of the team(s) that fell under their responsibility. This promoted a team perspective on success, rather than individually motivated performance. Making certain performance metrics publicly visible was not immediately received well but was soon realized as a major motivator and team building component.
The roll out of the model created a downstream influence that led to other business areas adopting the lean structure. After 18 months, the company had implemented the new process across all applicable operations. Lean was also used in all areas that were proposed for automation. Before an area was automated, lean was first applied and stabilized. JPF saw significant productivity gains and effective capital investments that could be directly linked to lean principles.
A big part of getting employee buy in was to always explain the why along with the how of operational change. JPF had employees participate in a game called the airplane game. This game created an experiential learning that exemplified why and how lean principles are applied to creating model airplanes. Principles such as continuous flow and waste reduction (TIM WOOD) were directly learned through this hands and simple experience. Each employee had their own individual learning experience that directly related to the broader organizational change.
Lean can be a major game changer for a business. When the concepts are applied and the mindset is adopted, the framework can transform an organization and enable its success. Lean and the world of Six Sigma can be a huge value creator for the entire value chain. The philosophy of lean can not only be applied to organizations and business but is relatable in the personal realm as well.
Edit:
Learning about lean reminded me of a video I came across that explains the elegant movements of the universe and thinking of life in terms of processes.