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Staying Lean
Thriving, Not Just Surviving
Second Edition
© 2011 by Peter Hines, Pauline Found, Gary Griffiths and Richard Harrison
Staying Lean
Thriving, Not Just Surviving
Second Edition
Peter Hines
Pauline Found
Gary Griffiths
Richard Harrison
© 2011 by Peter Hines, Pauline Found, Gary Griffiths and Richard Harrison
First edition published by the Lean Enterprise Research Centre, Cardiff University, 2008. Second edition published by
Productivity Press, New York, 2010.
Productivity Press
Taylor & Francis Group
270 Madison Avenue
New York, NY 10016
© 2011 by Peter Hines, Pauline Found, Gary Griffiths and Richard Harrison
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© 2011 by Peter Hines, Pauline Found, Gary Griffiths and Richard Harrison
Contents
List of Figures........................................................................... ix
Foreword.................................................................................xiii
Preface...................................................................................... xv
Acknowledgments.................................................................. xvii
About the Authors................................................................... xix
Section I The Journey to Lean.......................................... 1
1 Lean Vision and Principles................................................... 3
The Five Lean Principles....................................................................4
Understanding Value and Waste........................................................5
Muda (Waste).....................................................................................6
Mura (Unevenness)............................................................................6
Muri (Overburden).............................................................................8
Going Lean and Staying Lean.......................................................... 10
Thinking It Through.................................................................. 14
The Sustainable Lean Iceberg.......................................................... 15
Strategy and Alignment............................................................. 15
Leadership.................................................................................. 17
Behavior and Engagement........................................................ 18
2 Company Background........................................................ 23
The Road to Lean.............................................................................23
Company History..............................................................................24
Cogent Power (UK) Ltd.............................................................26
© 2011 by Peter Hines, Pauline Found, Gary Griffiths and Richard Harrison
viâ•… ◾â•… Contents
Cogent Power (Sweden) A.B.....................................................26
Cogent Power (Canada) Inc......................................................26
The Challenge Facing Cogent..........................................................29
Section II Below the waterline. ..................................... 33
3 Strategy and Alignment..................................................... 35
Cascading the Strategy into the Business........................................ 39
P: Planning.................................................................................42
D: Doing Phase.......................................................................... 52
C: Check Phase..........................................................................54
A: Act Phase...............................................................................56
Summary........................................................................................... 57
4 Leadership.......................................................................... 61
Level 5 Leadership............................................................................63
Situational Leadership...............................................................66
Distributed or Dispersed Leadership........................................ 67
Summary...........................................................................................86
5 Behavior and Engagement................................................. 89
Changing the Organization.............................................................. 91
Overcoming Resistance to Change..................................................94
Lean Behaviors.................................................................................97
Organizational Culture..............................................................98
National Culture....................................................................... 101
Changing Behaviors................................................................. 104
Involving the Unions............................................................... 110
Motivation for Change............................................................. 111
Engagement.................................................................................... 115
Summary......................................................................................... 121
© 2011 by Peter Hines, Pauline Found, Gary Griffiths and Richard Harrison
Contentsâ•… ◾â•… vii
Section III Above the Waterline........................................ 125
6 Processes.......................................................................... 127
Eliminating Waste in the Order Fulfillment Process..................... 133
Identifying Waste in the Order Fulfillment Process...................... 135
From Current State to Future State................................................. 139
Adding Value in the Order Creation (Sales) Process..................... 143
Understanding the Voice of the Customer............................. 147
Conducting the Survey............................................................ 152
Mapping the Sales Process...................................................... 157
Summary......................................................................................... 159
7 Technology, Tools, and Techniques.................................. 163
Lean Tools and Techniques: An Overview.................................... 164
Lean Tools for Managing Lean Enterprises................................... 168
5S: Workplace Organization.................................................... 169
Visual Management................................................................. 172
Lean Tools for Operating a Lean Enterprise.................................. 179
Mapping................................................................................... 181
Standardized Work.................................................................. 184
Total Productive Maintenance................................................. 186
Availability........................................................................ 188
Performance...................................................................... 188
Quality.............................................................................. 189
Single-Minute Exchange of Die (SMED)................................. 190
Just-in-Time (JIT)............................................................................ 192
Pull Systems............................................................................. 192
Kanbans................................................................................... 195
Jidoka.............................................................................................. 197
© 2011 by Peter Hines, Pauline Found, Gary Griffiths and Richard Harrison
viiiâ•… ◾â•… Contents
Tools and Techniques to Sustain a Lean Environment................. 199
Sustainability Audits................................................................200
A Word About the Technologies.................................................... 205
Summary.........................................................................................209
Section IV The Road from Push to Pull......................... 213
8 Route to Lean....................................................................215
Lowering the Waterline: Rigorous, Not Glamorous....................... 221
Key Findings............................................................................ 224
In Summary.................................................................................... 232
A Final Word................................................................................... 233
Sources of Further Help......................................................... 243
Recommended Publications................................................... 247
Companion Books to This Publication......................................... 247
Other Useful Texts......................................................................... 247
Jargonbuster........................................................................... 251
Index...................................................................................... 255
© 2011 by Peter Hines, Pauline Found, Gary Griffiths and Richard Harrison
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List of figures
Figure S.1.1 The five Lean principles..................................................... 4
Figure 1.1 nevenness of orders (MURA) and time
U
to respond (MUDA)............................................................ 9
Figure 1.2 UDA, MURI, and MURA in the admission
M
of students at UK universities...........................................11
Figure 1.3 Route to performance improvement over time................13
Figure 1.4 The Sustainable Lean Iceberg model................................16
Figure 1.5 The typical organization....................................................18
Figure 1.6 The sustainable organization............................................18
Figure 1.7 Stages of a Lean journey...................................................20
Figure 2.1 Cogent Power supply chain 2003.....................................25
Figure 2.2 Cogent Power organization structure 2003–2006.............30
Figure S.2.1 The Sustainable Lean Iceberg model................................33
Figure 3.1 Cogent Power business cockpit........................................38
Figure 3.2 ascading the strategy into the business
C
(strategy deployment and alignment)...............................40
Figure 3.3 L ine of sight from business—level strategic
objectives to team objectives............................................41
ix
© 2011 by Peter Hines, Pauline Found, Gary Griffiths and Richard Harrison
xâ•… ◾â•… List of Figures
Figure 3.4 eming’s principle of PDCA at different levels
D
in an organization.............................................................42
Figure 3.5 ogent Power’s SWOT (strengths, weaknesses,
C
opportunities, threats) analysis........................................ 44
Figure 3.6 Linked SWOT, or TOWS analysis framework...................45
Figure 3.7 A3 strategic thinking.........................................................53
Figure 3.8 Strategic alignment and deployment process...................55
Figure 3.9 Cascade of problems and solutions..................................56
Figure 3.10 r Deming’s scientific method and PDCA
D
applied to strategy alignment and deployment................58
Figure 4.1 Level 5 leadership..............................................................64
Figure 4.2 ow leadership styles might change during Lean
H
transformations..................................................................71
Figure 4.3 Cogent Power’s vision: A self-propelling organization.....74
Figure 4.4 Toyota leadership model...................................................79
Figure 4.5 perational efficiency versus commercial
O
effectiveness.......................................................................81
Figure 4.6 Multi-level leadership program.........................................83
Figure 4.7 The STRETCH zone.......................................................... 84
Figure 5.1 Real Lean...........................................................................96
Figure 5.2 Iceberg model of levels of culture and their
interaction..........................................................................99
Figure 5.3 ofstede analysis of Great Britain, Sweden,
H
and Canada......................................................................102
Figure 5.4 Theory of planned behavior (Icek Ajzen).......................105
© 2011 by Peter Hines, Pauline Found, Gary Griffiths and Richard Harrison
List of Figuresâ•… ◾â•… xi
Figure 5.5 People-centered lean sustainability model.....................106
Figure 5.6 Expectancy model........................................................... 112
Figure 6.1 Relationships between perceived value and cost........... 131
Figure 6.2 Current state map............................................................140
Figure 6.3 Future state map.............................................................. 141
Figure 6.4 Managing the future state............................................... 142
Figure 6.5 Order creation..................................................................144
Figure 6.6 Phases of the order creation process.............................. 145
Figure 6.7 Customer survey template............................................... 154
Figure 6.8 oice of the customer summary of
V
the follow-up opportunities............................................ 155
Figure 6.9 Four fields mapping......................................................... 158
Figure 7.1 Lean tools and techniques..............................................166
Figure 7.2 Pillars or Platform approach to Lean transformation..... 167
Figure 7.3 5S – Workplace organization...........................................169
Figure 7.4 Visual Management triangle............................................ 173
Figure 7.5 Continuous improvement gears......................................177
Figure 7.6 Value stream mapping tools............................................183
Figure 7.7 verall equipment effectiveness (OEE) =
O
Availability x Performance x Quality..............................187
Figure 7.8 Five Lean Principles......................................................... 193
Figure 7.9 Pull system Implementation............................................194
Figure 7.10 The flow of two Kanbans...............................................196
Figure 7.11 Cogent Power plant and process audit criteria...............201
© 2011 by Peter Hines, Pauline Found, Gary Griffiths and Richard Harrison
xiiâ•… ◾â•… List of Figures
Figure 7.12 The milestones of Lean maturity....................................203
Figure 7.13 Audit results 2005............................................................204
Figure 8.1 Roadmap 1 (2003–2005) of the Lean Iceberg model..... 216
Figure 8.2 Fishbone analysis of roadmap 1..................................... 217
Figure 8.3 oadmap 2 (2005–2007) on the Lean
R
Iceberg model..................................................................220
Figure 8.4 Fishbone analysis of roadmap 2.....................................220
Figure 8.5 Business situation 1 – thrive or survive..........................222
Figure 8.6 Business situation 2 – midway........................................222
Figure 8.7 Business situation 3 – 2007.............................................223
Figure 8.8 Lean Sustainability Iceberg model at Roadmap 3..........233
Figure 8.9 Sustainable Lean Change model.....................................235
Figure 8.10 Lean maturity and organizational learning.....................236
Figure 8.11 Action learning assessment.............................................238
Figure 8.12 lank template for your own action
B
learning assessment.........................................................239
Figure 8.13a Blank template to assess strategy and alignment...........239
Figure 8.13b Blank template to assess leadership...............................240
Figure 8.13c Blank template to assess behavior and engagement.....240
Figure 8.13d Blank template to assess process management.............241
Figure 8.13e B
lank template to assess technology, tools
and techniques................................................................241
© 2011 by Peter Hines, Pauline Found, Gary Griffiths and Richard Harrison
foreword
After having gone through many different improvement programs in
several functional positions (from R&D through manufacturing engi-
neering, production management, marketing, and sales to general man-
agement) since the start of my career in 1973, the need for an approach
that puts all the pieces of the puzzle in the right place, in order to get
to a balanced structure comprising a set of value creation activities that
reinforce each other, without the sometimes seemingly unavoidable
corrective action loops, became my very first priority and biggest pro-
fessional desire.
Of course, I have implemented and experienced, like many others
in industry, the benefits of all the wonderful and very promising
improvement tools and so-called profit generators, like process
re-engineering, kaizen, JIT, balanced scorecards, 5S, pull logistics,
ERP systems, and many others that have provided generous levels of
income to many consulting firms all over the world. But I have also
experienced the fact that, on a stand-alone basis, these improvement
activities have not provided the level of sustainable profitability for
which I was looking.
Yes, I have sometimes seen rapid improvements and encouraging
short- to sometimes medium-term results, but it simply didn’t stay; ulti-
mately and on top of that, there was a constant need for disproportional
management attention and pressure.
Making all employees allies in the war against competition based on
an unbeatable and transparently deployed strategy and clearly defined
xiii
© 2011 by Peter Hines, Pauline Found, Gary Griffiths and Richard Harrison
xivâ•… ◾â•… Foreword
roles and responsibility throughout the company to realize profitable
growth was what I have been seeking for quite some time.
In my first contacts with Professor Peter Hines at Cardiff University
and Chris Butterworth at S A Partners, I became convinced that the
holistic approach they had developed was the concept I had sought.
After having worked with them for many years now and seen the
great successes we have achieved at Cogent Power, I am even more
convinced that this is the way a business (any business—and not just
automotive) should be run.
It is sheer excitement to get to a situation where the organization
becomes truly self-propelling in exactly the direction that was defined
in the company’s strategy.
I hope that this book, which tells the story of implementing Lean
Thinking in Cogent Power, will help you understand how effective this
concept is.
Marcel Schabos
Cogent Power MD
2003–2007
© 2011 by Peter Hines, Pauline Found, Gary Griffiths and Richard Harrison
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