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Strong Leadership is Essential - Top Management’s Role in a Lean Manufacturing Transformation

23. May 2018 11:39

By: Larry O'Keefe, LJ OKeefe,Inc.

I remember my first coach from Toyota explaining that by implementing TPS (Lean Manufacturing) we could expect outstanding results. Productivity should double, inventory and floor space requirements would be cut in half. At the time this seemed an outrageous claim.

Three years later and our operation had more than doubled our net profit after tax to about 15% of sales, inventory turns increased from 13 to 42, a planned plant expansion was cancelled, overtime was virtually eliminated.

Subsequent implementations would sometimes see very similar results but some would barely experience any improvement.

The technical tools used were the same in every instance. Skill levels and motivation (and lack of motivation) were not significantly different in any of these operations. Some of the best results were actually seen in union shops.

The difference was in how top management attempted to embrace and implement the change. Some leaders were hands off but very supportive with strong change agents, others were very hands on and led by example. The plants that failed had leaders that delegated to people that already had full time responsibilities but expected them to take on the additional role of transforming the organization without adequate resources and support. The most spectacular failures occurred when leadership expected some type of improvement without any direction, support or resources to get the job done.

Implementing Lean Manufacturing can appear to be very simple, like losing weight. All you have to do is eat right and exercise. Simple concepts, easy to grasp, it should be simple. Yet after all these years there are many more failed attempts than successful examples.

How is this possible, given that Toyota freely shares the method upon which ‘lean manufacturing’ is built (even with General Motors at NUMMI, a joint venture)? And yet, GM failed to learn from this venture even though many GM employees went to NUMMI to study and learn.

Much is required of top management, they have many roles and responsibilities that demand their attention. Every new management philosophy or ‘flavor of the month’ that claims to be capable of delivering outstanding results claims to need the full attention of top management. It seems an impossible task. Somehow top management at Toyota seems to be able to keep moving forward after many decades of implementing TPS.

Some of the items I will be discussing at IWF 2018 include:

  • Challenge the organization to the ideal condition
    • Highlighting or creating the need to change
    • Respond to the need
      • Short term and long term
      • Performance indicators/measures
      • Support structures
      • Breaking down obstacles
      • Encouraging through organizational culture
  • Create an environment where the shop floor can manage itself
    • Visual factory
    • People development
    • Decisions made on shop floor

Learn more about this subject during Larry's session, "Leading Change, Top Management's Role in a Lean Manufacturing Transformation" at the IWF 2018 Education Conference.

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