What is lean transformation?

What does lean transformation mean?

A lean transformation is the move from using some lean tools to working as a lean organisation. The five lean principles (value, value stream, flow, pull and perfection) describe the destination. The transformation is the journey: changing how work is designed, how problems are handled, how people are developed and how leaders spend their time.

That is why it is different from a lean implementation. An implementation installs things: a 5S programme, a kaizen event calendar, visual boards. A transformation changes the way the business is managed, so the gains from those tools hold after the consultants and the launch energy have gone.

The Lean Enterprise Institute describes this with its Lean Transformation Framework, which asks five questions of any organisation:

• Purpose: what problem is the business trying to solve for its customers?
• Process: how will the work be improved so it flows?
• Capability: how will people be developed to do and improve the work?
• Management system and leadership behaviour: what must leaders do differently to support the new way of working?
• Basic thinking: what beliefs and assumptions underpin the change?

What are the steps in a lean transformation?

There is no single recipe, but most successful transformations follow a similar order.

1. Agree why you are changing. Name the business problem: lost customers, safety performance, cost, lead time or capacity. "Becoming lean" is not a purpose.
2. Choose a model line or value stream. Start where the problem is real and visible, with a leader who wants to learn. Prove the approach there before spreading it.
3. Go and see the current state. Walk the process, map the value stream and measure what happens now. Leaders learn more on a gemba walk than from a monthly report.
4. Stabilise the work with standards. Define standard work for the critical tasks so there is a baseline to improve from.
5. Install daily management. Run short tiered daily management meetings at visual boards so problems are seen and escalated within hours, not weeks.
6. Develop people and problem-solving capability. Teach structured methods such as PDCA and the A3 method, coach people as they use them on real problems, and plan each person's skills with a skills matrix.
7. Connect improvement to strategy. Use hoshin kanri to cascade a few breakthrough objectives, so local improvement effort pulls in the same direction.
8. Spread and sustain. Copy what worked to other areas, keep leader routines such as leader standard work in place, and review the management system itself at least once a year.

What does a lean transformation roadmap look like?

Timelines vary with size and starting point, but a typical roadmap moves through three phases.

The third phase is where many programmes stall. The easy wins are gone and the routines are familiar. Our article on how lean transformations keep improving after year three covers what separates the organisations that keep learning from those that only keep the language.

Why are people the deciding factor in a lean transformation?

Many lean organisations review daily performance as SQDC: safety, quality, delivery and cost. A lean transformation should measure SQDCP, because the P, people, is the critical and deciding factor. People are not a cost to be managed but a primary stakeholder, treated with respect as equals, and they are the ones who deliver safety, quality, delivery and cost. Every problem found and solved at the source is found and solved by people.

The Toyota Way rests on two pillars, continuous improvement and respect for people, and a saying often attributed to Toyota is that it builds people before it builds cars. In a lean transformation, that means the continuous development of people is measured and developed in equal measure with every other system:

• Measure people on the same board. Track measures such as skills cover, training against plan, ideas raised and implemented, and engagement on the SQDCP board, and review them in the same tier meeting as SQDC.
• Develop people in their daily work. Leaders coach people through real problems, so capability grows at every level, every day, not only in a classroom.
• Plan skills like any other system. A skills matrix shows who can do each task, who is learning it and where cover is thin, so development is planned rather than left to chance.
• Respect what people know. The people doing the work know it best, so standards are written and improved with them, not for them.

This is what makes the change last. Tools and routines can be copied, but only people who keep learning will sustain the system and improve it after the launch energy has gone.

What changes for leaders?

Leadership behaviour is the part of a lean transformation that is hardest to see and easiest to skip. In a traditional organisation, leaders set targets, review results and solve problems for people. In a lean organisation, they:

• Spend planned time where the work happens and ask questions before giving answers.
• Treat problems as useful information rather than failures to hide.
• Coach people through structured problem solving instead of handing out fixes, and treat developing their people as part of the job, not an extra.
• Follow their own standard work, including attending tier meetings and checking that standards are followed.
• Hold to a small number of priorities and say no to the rest.

Why do lean transformations fail?

• Tools without a management system. Kaizen events deliver a burst of improvement that fades because nothing exposes the slide back.
• Delegated to a lean team. A central office runs the programme while line leaders carry on as before.
• Top-down only. Leaders set the policies and goals but do not engage middle managers and the front line in working out the best ways to achieve them. An ill-informed programme imposed from the top is easily scuttled by the people who must run it but do not believe in it. Bottom-up engagement, such as the catchball step of hoshin kanri, is what turns goals into plans people own.
• Too much, too fast. Every site and every tool at once, so nothing is done well enough to become habit.
• Measuring activity. Counting boards, A3s and events instead of safety, quality, delivery, cost and people (SQDCP).
• Treating people as a cost. Headcount and efficiency are tracked, but skills, development and engagement are not, so capability never grows and the gains depend on a few experts.
• No link to strategy. Local teams improve things that do not matter to the business.
• Disconnected information. Actions, audits and problems sit in separate spreadsheets, so leaders cannot see the whole picture.

Example

A food and beverage plant starts its lean transformation on one packaging line with frequent unplanned stops. The team writes standard work for changeovers, starts a ten-minute tier 1 meeting at an SQDCP line board that tracks skills cover alongside safety, quality, delivery and cost, trains a second operator on every changeover, and escalates unresolved stops to a daily tier 2 meeting. The two biggest causes are worked through as A3s. When downtime on the model line falls, the same routines are copied to the other lines, and the site's annual objectives are cascaded to every board through hoshin kanri. The tools are the same on every line; what changed is how the plant is managed.

Sources

• Lean Enterprise Institute, Lean Transformation Framework (lean.org).
• James P. Womack and Daniel T. Jones, Lean Thinking (1996).
• Mike Rother, Toyota Kata (2009).

For more lean terms, browse the full lean and operational excellence glossary.