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“Koenigsaecker’s story is an inspirational one. In this book, he captures succinctly over twenty
years of wisdom about how to lead a Lean transformation.”
—David Fillingham, chairman and CEO, Royal Bolton Hospital NHS Foundation Trust
“Koenigsaecker hits a grand slam with Leading the Lean Enterprise Transformation, and
the operative word is “leading”! George drives home the point that Lean is as natural in the
touch labor arena as it is in the intellectual labor arena—and leadership is the key to success
in both.”
—A.B. Morrill III, Major General, USAF, Vice Director, Defense Logistics Agency
“Finally, a hands-on, real-world book written by someone who has actually led several lean
transformations. My only concern is that my competitors get their hands on this book.”
—Peter Desloge, chairman and CEO, Watlow Corporation
“Koenigsaecker has been my sensei for over seven years. The lessons he has worked to impart are
all contained right here . . . a must-read for anyone serious about lean process improvement.”
—Donald J. Wetekam, group vice president, AAR Corporation, Lieutenant General (retired) USAF
“Koenigsaecker has written a wise book that goes beyond an explanation of the tools of lean
to provide keen insights derived from his three decades of experience on the ground as a lean
leader.”
—Alan Aviles, president, New York City Health and Hospitals Corporation
“Koenigsaecker makes a complex subject simple… a great ‘how-to’ guide for leaders on lean
process improvement based on years of practical experience.”
—Major General Dave Gillett
“Koenigsaecker’s practical, experience based understanding of lean and its implications for
leaders of companies is much needed and enormously helpful. He has the credentials to say
it like he experienced it, from the same vantage point as thousands of executives and senior
managers all over the world.”
—Robert Miller, executive director, The Shingo Prize for Operational Excellence
“Very few individuals in North America have the level of experience leading change as George
Koenigsaecker. This is a great book for anyone beginning their lean journey.”
—Dan Ariens, president and CEO, The Ariens Company
“Through the lens of his own transformational journey, Koenigsaecker provides readers with
a step-by-step primer for building a culture of continuous improvement and offers interesting
anecdotes to support his philosophy that a lean culture will always supersede lean tools.”
—Mike Ward, president, Autoliv Americas
Leading the
Lean Enterprise
Transformation
George
Koenigsaecker
Productivity Press
Taylor & Francis Group
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Koenigsaecker, George.
Leading the lean enterprise transformation / George Koenigsaecker.
p. cm.
Includes bibliographical references and index.
ISBN 978-1-56327-382-7
1. Total quality management. 2. Industrial efficiency. 3. Industrial productivity. I.
Title.
HD62.15.K65 2009
658.4’013--dc22 2009008462
. Summary.....................................................................................37
. Notes.............................................................................................38
. Antibodies...................................................................................87
. Lean Year by Year...................................................................... 90
. Year One........................................................................... 90
. Year Two............................................................................91
. Year Three.........................................................................91
. Year Four...........................................................................91
. Summary.....................................................................................92
Index..................................................................................................... 109
The Author........................................................................................... 121
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Acknowledgments
My journey of lean learning continues, but it has been built on the work
of many others. Starting near the beginning, it is appropriate to recog-
nize the people of Toyota, who have carefully distilled best practices from
around the world, added unique insights of their own, and built a disci-
plined business system that is the benchmark for how to run an enter-
prise. The folks who began the work at Toyota, especially Taiichi Ohno,
who pulled much of it together, would tell you that the Toyota model
is built on a foundation of the teachings of Henry Ford, W. Edwards
Deming, those who developed our WWII training methods, and others.
And although this is true, the unique insights of Toyota and the compa-
ny’s ability to create a culture that sustains this corporate learning system
are truly amazing.
I owe thanks to folks like Frank Petroshus of Rockwell Automotive,
who supported the global learning effort that got me started on this path.
Also, folks like Steve and Mitch Rales, who bought a company, and then
let me experiment with it. And then, my principal sensei, three members
of Ohno’s Autonomous Study Group, who taught me the basics of the tools
and principles of Toyota Business System (TBS): Yoshiki Iwata, Chihiro
Nakao, and Akira Takenaka.
Perhaps most important are all the associates at Danaher and HNI/HON,
who struggled with my efforts to understand and lead in this new, lean
world. I also want to thank Simpler Consulting LP for providing me with
a mechanism for demonstrating that, with a solid foundation in lean prin-
ciples, a lean business system can be applied successfully in any work envi-
ronment—from health care and other service industries to the military.
I would also like to thank three key editors who worked with me on this
manuscript: Terry Rousch (Simpler Consulting); Michael Sinocchi (senior
acquisitions editor with Taylor & Francis/Productivity Press); and Tere
Stouffer (freelance development editor).
Of course, thanks to my wife, Charlotte, and our children, Danaka,
Brooke, and Derek, who suffered through long absences while I was on
my journey of learning. None of this would be possible without them.
ix
Introduction
I have been involved with the evolution of lean thinking for more than
thirty years. Over this period of time, there has been, in some regard, great
progress, as lean implementation has moved from high-volume automo-
tive production to medium- and low-volume, nonrepetitive production, to
administrative and general support processes, and even to product develop-
ment and design. Today, lean is evolving into the public sector, particularly
the military, and is now rapidly expanding into the healthcare industry.
This book is focused on what I think of as lessons learned from my
thirty years of study and application of lean thinking. I have started eleven
corporations on their lean journeys while serving as either president or
group president. Most of the lessons learned from these companies were
the results of multiple trial-and-error experiments, where I implemented
a variety of leadership practices meant to manage the change and build
a new culture. Throughout this book, you will see a number of examples
from clients of Simpler Consulting, a company I helped found more than
ten years ago. I have chosen to use these examples because Simpler has a
deep belief in the lean principles, enabling sensei to jump into new indus-
tries, find new applications for lean, and demonstrate the effectiveness of
lean principles.
Over the years, I have had the opportunity to benchmark—both in a
corporate role and as a Shingo Prize examiner—more than 100 organiza-
tions that have attempted a lean transformation. Many of the lean efforts I
have observed are what I would consider to be failures; that is, they have not
achieved the results that a few benchmark organizations have shown to be
possible and, perhaps more important, they have not demonstrated an ability
to transform their culture into a new lean-learning culture that can sustain a
high pace of improvement through multiple generations of managers.
That said, the focus on this book is not on lean tools or lean princi-
ples, which are covered extensively in other books by Productivity Press.
Instead, the focus here is almost entirely on the leadership aspects of a lean
transformation. Up until now, there has been no real guideline for lead-
ers to build and sustain a transformational lean effort in an organization.
That is what this book offers.
xi
xii • Introduction
A Lean Tutorial
This book does not attempt to show how to use every lean tool; you can find
that in many other books on the market. This section, however, provides
Introduction • xiii
you with a basic tutorial on lean. Even if you’re familiar with the lean tool-
box, you may want to review this section because it offers you a summary
of the tools that are used over the course of a lean transformation. You also
get a valuable perspective on how each tool is used, when it should be used,
what it can accomplish, and how it drives the True North metrics.
I organize these tools into a few general categories: top-level tools for
executive leadership; tools that principally improve quality; tools that
principally build flow; tools that principally improve cost and productiv-
ity; tools that support human development; and tools that are specifically
used in the area of product or service development. Almost all these tools
have a positive impact on the four True North metrics, so I group them
under the True North metrics that they tend to directly impact the most.
As noted, setting True North improvement goals in the double-digit area
will have a positive impact on each line item of an income statement and
balance sheet.
Figure I.1
TVSA example.
to the strategic direction of the firm and will demonstrate the power of
lean improvement to all stakeholders in the enterprise.
Strategy Deployment
The strategic deployment tool has a couple of other names (policy deploy-
ment and hoshin kanri), but the tool is essentially the same in each version
(see Chapter 6 for details). It is a methodology that takes the enterprise
improvement targets and deploys them down through the enterprise, all
the way down to the first-level workforce where you find most of the value-
added steps. The basic concept is a cascading of goals from one level of
leadership down to the next level, where the goals are turned into value
stream improvement plans. This part is called catchball by the Japanese.
It is meant to be an exchange of views and knowledge about the improve-
ment effort between two levels of leadership.
You’ll begin to ask the following questions:
Early on, catchball is difficult because the top leadership typically does
not have the lean experience to know what results are truly possible. For
that reason, this tool is often not implemented until the second year of a
lean effort, after some experience about what is possible has been built up
in the enterprise.
The process cycles downward through each level of leadership. Ultimately,
at the first level of the organization, there is a work plan for improvement
activity for each value stream that is targeted for improvement during
that year. And then this process cycles back upward until it confirms the
corporate improvement goals and demonstrates that the plan will achieve
those goals.
The planning phase is typically done once per year and is a learning
experience by itself. Then there is a monthly strategy deployment meeting
to review progress made (see Figure I.2), issues that have come up, and
opportunities for shared learning. Most companies tend to have a monthly
meeting to review performance that is financially driven. Although the
meeting tunes the company’s direction, it is fundamentally focused on
variance to a financial plan. What strategy deployment does instead is cre-
ate a process that focuses the enterprise on fundamental improvement and
Figure I.2
Strategy deployment in action.
xvi • Introduction
A3
Another tool that is used to develop business strategy, but is also used
for everyday problem solving, is the A3. A3 is the name for an interna-
tional paper size. Toyota developed an approach to problem solving that
is designed to fit onto one A3 sheet. In typical (humble) Toyota fashion,
the company did not come up with a fancy name, but just referred to it by
the paper size. There are some slight variations in format, but a typical A3
would be similar to the nine-box A3 shown in Figure I.3.
A3 offers a format that forces you to cover all the key steps in consider-
ing a problem or an action. If you follow the nine boxes of information,
Figure I.3
Watlow TPOC.
Introduction • xvii
you will have done a great job of understanding the problem, determining
alternative solutions, and learning from the process.
A3 is also designed to use graphical data and sketches to outline con-
cepts. It takes some work to come up with a sketch that will convey a key
idea. (I am not good at it personally, but it is remarkably powerful.) Some
people cannot really understand easily through words, and these team
members will grab onto the idea of the sketch much more easily. And
for everyone the “words + sketch” make the idea much clearer and much
more memorable.
At first, an A3 seems like a lot of work. But then you begin to realize
that it prevents a huge amount of rework that results from implementing
ideas that have not been thoroughly thought through. You also begin to
see that after the organization is familiar with the format, A3 is incred-
ibly efficient as a communication tool. The combination of words and
sketches makes it deeply effective. The focus on covering all key aspects
of an issue (the nine boxes) also makes it deeply effective: Getting all the
information summarized on one sheet of paper makes it very efficient.
Five Whys
One tool that is from both sides—originally a TQM tool but taken to
an order of magnitude of higher impact at Toyota—is the basic tool of
asking why five times. The basic concept is that if you ask why five times,
you are about 95 percent assured that the problem you fix is actually a
root cause and not just a surface symptom. From personal experience,
I suggest that about 90 percent of all quality problems can be solved
just by getting the work group together, at the exact time of the quality
incident, and then asking why five times. (After the work team asks why
five times, you will have found a root-cause solution of 90 percent of
daily quality issues. The next 10 percent of quality problems get progres-
sively harder to solve.)
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