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T H E L E A N , M E A N N E W E C O N O M Y

Learning From Mistakes

For lean manufacturing to work,
you must integrate the social and technical
Drew Lathin and Ron Mitchell

S U.S. COMPANIES COMPETE GLOB- require that each generation of new designs has
ally, they face unprecedented pressure fewer defects than the generation before. These are
to supply manufactured products that difficult standards to meet, even for the most able
meet increasingly stringent cost, qual- of companies. As a result many organizations have
ity and delivery requirements. The jumped on the lean production bandwagon.
drive toward agility in manufacturing Lean production is a term that was introduced in
also means that firms have to cope with the need the 1996 book The Machine That Changed The World.1
for continuous change in product design, while It describes the production system that Eiji Toyoda
simultaneously reducing the cost and time required and Taiichi Ohno developed at the Toyota Motor
for change. Co. in Japan.
Increasingly rigorous quality standards also According to the authors, lean production, com-
pared with mass production,
... uses less of everything ... half the
human effort in the factory, half the
manufacturing space, half the invest-
ment in tools, half the engineering
hours to develop a new product in half
the time ... . Also, it requires keeping
far less than half the inventory on site,
results in many fewer defects and pro-
duces a greater and ever growing vari-
ety of products.2

It is no wonder that many manufac-

turing companies around the world are
trying to become lean producers. The
efforts of some U.S. companies to imple-
ment lean manufacturing are described
in the 1997 book Becoming Lean.3

QU A L I T Y P R O G R E S S I J U N E 2 0 0 1 I 39

Mass production leads to waste We encourage a new approach for planning and
The mass production paradigm in effect today results implementing lean technologies that is consistent with
in a great deal of hidden waste. Much of this waste is in the lessons learned a decade ago in the TQM effort.
overproductionironically, the primary objective of the We can demonstrate that an approach including peo-
mass production model. Overproductionproducing ple and culture is essential to the success of imple-
as much as possible, as fast as possible as soon as pos- menting lean manufacturing. This article introduces a
siblecauses or increases the other types of muda (the predictive and planning tool called the Lean
Japanese word for waste) inherent in mass production Implementation Planning Matrix, which helps deter-
systems. mine which specific people and cultural factors will be
One type of waste resulting from mass production problematic for lean efforts.
is excess inventory. The expense of carrying invento-
ryfloor space, extra handling, counting, the cost of Sociotechnical systems
moneyis an obvious waste inherent in mass produc- Sociotechnical systems (STS) integration is a con-
tion. Other types of muda that result from mass pro- ceptual model that enables organizations to introduce
duction may be less obvious. They include time and the new processes and methods of lean manufacturing
money wasted in handling and transporting large more effectively. Its benefits include faster and more
batches of material, labor and equipment capacity complete utilization of lean methods and greater eco-
wasted in producing supposedly economical order nomic impact.
quantities, and increased time and cost to find and The STS method is based on the assumption that all
correct defects in large batches. work organizations combine a technical system and a
Converting a classic mass production system to lean social system. The technical system includes the orga-
production will double labor productivity all the way nizations technology and work process. The social
through the system while cutting system includes its people,
production throughput times by organizational structure and
90% and reducing inventories in We can demonstrate that an culture.
the system by 90% as well. Errors The technical and the social
reaching the customer and scrap approach including people and systems are interdependent,
within the production process are with neither able to perform
typically cut in half, as are job relat- culture is essential to the success of the work of the organization
ed injuries, according to James without the other. Technology
Womack and Daniel T. Jones.4 implementing lean manufacturing. requires people to operate
within the confines of the work
Learn from history process. When lean methods
The widespread interest and activity in lean manu- are introduced, there is a need to consider the interac-
facturing closely resemble the quality movement in tion of new methods with the existing social system.
the United States in the 1980s and early 1990s. Many Lean methods are more likely to yield promised
of the same mistakes made in the zest to improve benefits where the characteristics of the existing social
quality are being repeated in the quest to become lean. system are capable of supporting and sustaining the
Many companies started their quality movements new technical system. For example, organizations that
by copying techniques from successful Japanese firms. have a good history of collaborative problem solving
First it was quality control circles and then statistical and teamwork have a social system that is in align-
process control. These were followed by increasingly ment with the introduction of work cells and teams
more sophisticated techniques such as design of that staff them. Such organizations are more likely to
experiments. enjoy rapid deployment after the introduction of work
Real progress, however, had to wait until more pro- cells, a common component of lean manufacturing.
gressive companies realized that quality improvement But where there is a misalignment between the
required more than rote copying of techniques social and technical subsystems, the implementation
applied by other firms. Quality improvement was of lean methods can be problematic, and promised
only achieved after companies implemented compre- economic gains may not materialize. For example, an
hensive change management programs such as total organization in which departments jealously guard
quality management (TQM) that addressed both their own autonomy and freedom will probably expe-
social and technological aspects of quality manage- rience a difficult transition when it tries to reorganize
ment. Many companies today are repeating the mis- by product families across functional boundaries.
takes of the past when they attempt to implement lean Perhaps the most insidious barriers hindering the
technology without accounting for social issues. widespread adoption of lean manufacturing are the

40 I QU A L I T Y P R O G R E S S I J U N E 2 0 0 1
Technological Requirements of Lean Manufacturing
Six technological changes are where material is stored wait- frequently. The production sys-
necessary to implement lean ing for use. Just as in your tem will be better able to han-
manufacturing: local supermarket, the objec- dle an increase in product mix

tive is to have enough material and a decrease in production
Transform the traditional batch to satisfy customer demand quantities when the time and
and queue production system without having excess product effort required to change over
into a continuous flow system that increases carrying costs. machines is reduced.

where possible. Batch and When the supermarket quanti-
queue production systems are ty reaches a predetermined Improve the reliability of the pro-
characteristic of process levela minimum quantity or duction system through total
focused organizations. reorder pointa signal (the productive maintenance tech-
Equipment is typically grouped pull) is sent out to schedule the nologies. With production
by type of function. For exam- production of just enough equipment linked in a continu-
ple, all presses are in one material to replenish the stock ous flow arrangement, the
department, welders in another consumed. effects of equipment break-

and assembly in yet another downs are magnified. When
area. Material is produced in Smooth the demands on the pro- one machine in a cell goes
large batches to maximize duction system through the down, the other machines do
machine efficiencies and trans- adoption of standard order not have a queue of work to
ported to downstream opera- (pitch) quantities and leveled keep them running. Therefore,
tions where it waits in queue mixes of work orders. When it is essential that all equipment
before being processed. there are large variations in the be properly maintained to pre-
In a continuous flow pro- amount of product consumed vent breakdowns. Predictive
duction system, the equipment over short periods of time, it is and preventive maintenance
is organized to support materi- necessary to maintain large must replace breakdown and
al flow. The machines are inventories (with increased car- repair maintenance.

arranged so material can be rying costs) and/or excess pro-
processed and moved from duction capacities (with Improve the repeatability of the
operation to operation, one increased investment costs) to production system through
piece at a time (in a continuous meet those variances. When process controls and poka-
flow) with little or no waiting those variations in demand can yoke quality technologies.
time between operations. be reduced or leveled, the When excess inventories of

investments in inventory product have been removed
Implement supermarket pull sys- and/or productive capacity can from the production system, it
tems wherever continuous be reduced. is no longer possible to simply

flow is not possible. There are replace defective products
situations that may prevent the Improve the flexibility of the pro- from stock. To make just in
use of continuous flow from duction system through quick time production work, 100%
raw material all the way changeover technologies. A quality production is essential.
through to shipment. Wherever flexible production system is Inspection based quality sys-
continuous flow is disrupted, it one that can efficiently change tems do not achieve 100%
is necessary to implement an from producing one product quality levels. It is therefore
alternative method for control- type to another. As batch sizes necessary to adopt a preven-
ling inventory and scheduling decrease (toward the ideal of a tion based system of quality
production. A supermarket pull one-piece batch), it will be nec- control through the use of
system is such a method. essary to change over from one process control plans and error
The supermarket is the area product to another much more proofing (poka-yoke) devices.

QU A L I T Y P R O G R E S S I J U N E 2 0 0 1 I 41

beliefs, norms and values that comprise the mass pro- performance. Joint optimization recognizes that a
duction mind-set (in other words, the belief that more, work organization that attempts to optimize the tech-
faster, sooner is better). This can sabotage the right-siz- nical subsystem at the expense of the social subsystem,
ing of technology required to become a lean producer. or vice versa, is likely to have suboptimal performance
The point is that without a careful consideration of overall. High performance requires that both subsys-
the existing social system, barriers may arise that tems be operating effectively together, aligning new
slow or thwart various aspects of lean production technology, work processes, reward systems, person-
implementation. Some of the social factors will be nel practices and organizational structure.
obvious to the casual observer, but many will not. The sociotechnical design process follows four
Instead, they will surface at critical points in the steps:
implementation process, causing added and unex- 1. Design the preliminary technical system. Value
pected chaos during an already hectic rollout. The stream mapping is a relatively new technique that has
trick is to anticipate the social barriers before they helped many companies plan the technological changes
arise and plan for managing them during the techni- necessary to transform their mass production systems
cal system design. into lean production systems. Value stream mapping is
described in detail in the book Learning To See: Value
Joint optimization Stream Mapping To Add Value and Eliminate Muda.5
The process we employ to do this is called joint opti- Value stream mapping begins with the creation of a
mization, which is the process of simultaneously current state map (see Figure 1 for an example).
designing the social and technical subsystems to create Current state maps describe the flow of material and
an overall work organization that is capable of high information through the production system. Through

FIGURE 1 Current State Value Stream Map

Yearly forecast Production control Yearly forecast

Forging Customer
suppliers Monthly orders MRP* Weekly orders

Weekly schedule Weekly ship schedule

Monthly Weekly
Daily schedule

Turn 01 Turn 02 Broach Mill New brits Heat treat Assembly

I = 37,516 I = 1,270 I = 1,612 I = 841 I = 1,686 I = 610 I = 465 I = 2,061

107 days 3.6 days 4.6 days 2.4 days 4.8 days 1.7 days 1.3 days 3 days

C/T = 95s C/T = 152s C/T = 30s C/T = 912s C/T = 112s LT = 12h C/T = 450s
S/U = 90m S/U = 90m S/U = 60m S/U = 180m S/U = 270m C/T = 216s S/U = 0
Rel = 57% Rel = 57% Rel = 90% Rel = 80% Rel = 80% S/U = 150m Rel = 100%
3 shifts 3 shifts 1 shift 3 shifts 1 shift Rel = 80% 2 shifts
1 shift

I = Inventory s = Seconds
Inventory days = 133.6 days C/T = Cycle time m = Minutes Current state map
Value added time = 32.8 minutes S/U = Set up for clutch manufacture
Rel = Reliability June 2, 1999

* Manufacturing resource planning

42 I QU A L I T Y P R O G R E S S I J U N E 2 0 0 1
FIGURE 2 Future State Value Stream Map
Customer purchases 83,000 per year or 332 per day
TAKT time (the rate of consumption) = 162 seconds per piece
over a 2 shift operation

Yearly forecast Production control Yearly forecast

Suppliers Customer
Daily orders MRP* Daily orders
2 Days

Daily ship schedule

Daily Daily

2 Days

Turn 01 Turn 02 Broach and mill New brits Heat treat Assembly

2 Days 2 Days 5 Days

C/T = 95s C/T = 152s C/T = 124s C/T = 116s C/T = 124s C/T = 113s
S/U = 90m S/U = 90m S/U = 180m S/U = 2.5h S/U = 0 S/U = 0
Rel = 57% Rel = 57% Rel = 72% Rel = 80% Rel = 98% Rel = 100%

FIFO = First in first out s = Seconds Future state map

9 days of inventory
C/T = Cycle time m = Minutes for clutch manufacture
Value added time = 14.4 minutes
S/U = Set up h = Hours June 3, 1999
Rel = Reliability
* Manufacturing resource planning

analysis of current material and information flows it is potential issues are gleaned from the literature, experi-
possible to identify the technological changes necessary ence, knowledge of the organization and common
to transform the production system into a lean one. The sense. Our experience tells us that the following vari-
future state map serves as a blueprint for planning and ables are among the potential roadblocks to lean
constructing the system (see Figure 2 for an example). implementation:
2. Test the preliminary technical system against the A mass production mind-set.
existing social system. After the preliminary technical Peoples need for autonomy.
design is complete, it should be tested against the A lack of real-time information for shop floor pro-
existing social system. This is done to ensure the antici- duction and inventory management.
pated changes can be implemented. Too often, organi- Sales bonuses that create spikes in end of month
zational factors impede the implementation of lean demand for goods.
practices. It is far better to try to predict which organi- Piece rate pay systems.
zational factors will obstruct the implementation of Feelings of status among technical specialists that
lean production and adjust for them in the design make them resist cooperation with factory floor per-
phase than to wait for the implementation phase. sonnel.
The first step in conducting the joint optimization A bigger is better mind-set applied to technology.
analysis is to conceptually determine the individual, A full utilization mind-set or belief that machines
organizational and cultural variables relevant for and people must always be busy.
implementing lean production. These variables or All the well-known barriers, such as individualism,

QU A L I T Y P R O G R E S S I J U N E 2 0 0 1 I 43

FIGURE 3 Lean Implementation Planning Matrix (Partial)

Strategy Implement continuous flow production Summary

Technical Organize equipment Schedule production Utilize multiskilled workers
changes into product cells to match TAKT time
Required Management Management Workers Cell workers Machine Machine Machine
behavioral focus will will implement will follow will perform operators operators operators
changes change from a fast response standard as part of a will be will be will be
Technical system

departmental system to work synchronized able to able to able to

(machines) to correct methods production perform run all perform
products (cell) production team own mahcines quality and
problems setups in the cell maintenance
Social system
Individual factors
Desire for -2 -2 +1 +1 +1 -1
Management 0
and ability
in new
coaching role
Teamwork skills -1 -1
Understanding -1 -1
of new system
Employee 0
Group factors
Understanding 0
of new
roles and
Understanding 0
of results
Mass -2 +1 -1 -1 -2 -5
Continuous 0
kaizen activities
in place
Experience in -1 -1
team concept

Summary -3 0 -1 -4 0 0 -1

Plus = facilitates 0 = is neutral Minus = is a barrier TAKT time = rate of consumption

individual reward systems, competitive spirit and presence and strength of these variables. Question-
multiple job classifications, to teams and teamwork naires, surveys, interviews and focus groups are just a
at all organizational levels. few we have employed.
Using a process that identifies these barriers and To determine whether these variables facilitate,
puts them on paper makes it much harder for system impede or are neutral with regard to the ideal future
designers to ignore their potential impact on lean state, you can construct a joint optimization matrix we
implementation. call the lean implementation planning matrix. At the
A variety of methods can be used to determine the top of the matrix the various features of the technical

44 I QU A L I T Y P R O G R E S S I J U N E 2 0 0 1
changes (strategy, technical changes and behavioral incorporates an ongoing continuous improvement
changes) are entered. These are fairly predictable. phase, many of these ideal technical features can often
The social variables are entered along the left-hand be implemented later in kaizen (continuous improve-
column. They are organized into five categories: indi- ment) activities when the organization is more
vidual, group, intergroup, company and intercompa- amenable to the concept.
ny factors (see Figure 3 for a partially filled out 4. Assemble and place all the changes to the tech-
matrix). Then a determination is made in each cell nical and social systems into an implementation
indicating whether the existing social system variable plan after the new sociotechnical system is complete.
strongly or weakly facilitates, is neutral, or weakly or A good project management methodology and tool
strongly impedes the lean behavior at top. are essential to keep track of the changes being imple-
A rating scale is used to determine the strength of mented.
facilitation or impediment (+2, +1, 0, -1, -2). A summary
score can be determined by adding the values entered Total system required
in the cells to determine whether the particular lean While the literature is replete with examples of lean
behavior is at risk or not (column sums) or whether a manufacturing implementation success stories, far
social system factor is supportive or not (row sums). more organizations are reaping only 25 to 50%, if that,
For example, in Figure 3 it can be seen that the mass of the anticipated results from lean implementation.
production mind-set is a strong barrier as evidenced Our experiences point to the lack of a total sociotech-
by its being a mismatch with a number of required nical methodology as the cause. This methodology is
behavioral changes. The desire for autonomy, systematic, starting with the creation of a current state
although having a number of interactions with the map and proceeding through a variety of steps to
required behavioral changes, is basically a wash since design of the lean production system, testing that
it both facilitates and impedes a number of factors. design against the existing social system and then
Looking at row sums, however, we can see that the designing a jointly optimized sociotechnical system.
desired change cell workers will perform as part of a Jointly optimized sociotechnical systems will
synchronized production team is at great risk increase the rewards of lean manufacturing, improv-
because a number of social system factors are barriers. ing the bottom lines of organizations that use them.
Another desired change, management focus will
change from departmental (machines) to products REFERENCES
(cell), is also at risk. 1. James P. Womack, Daniel T. Jones and Daniel Roos, The
With this information, it is now possible to see Machine That Changed the World (New York: Rawson Associates,
which behavioral changes are at risk, what the barriers 1990).
are and why, prior to implementation. Targeted action 2. Ibid, p. 13.
planning can occur to ameliorate these negative effects. 3. Jeffrey K. Liker, Becoming Lean: Experiences of U.S.
3. Design the final sociotechnical system. In cells Manufacturers (Cambridge, MA: Productivity Press, 1997).
where mismatches are identified (in other words, 4. James P. Womack and Daniel T. Jones, Lean Thinking:
where the present social system factor impedes the Banish Waste and Create Wealth in Your Corporation. (New York:
lean technique), system designers face two choices. Simon and Schuster, 1996).
First, they can change the social system. For example, 5. Mike Rother and John Shook, Learning To See: Value Stream
when individuals are performing individual jobs, and Mapping To Add Value and Eliminate Muda (Brookline, MA: Lean
continuous flow manufacturing requires the implemen- Enterprise Institute, 1999).
tation of work teams, it may be necessary to address a
DREW LATHIN is a founder of the Lean Enterprise Action
variety of individual, organizational and cultural fac-
tors to facilitate multiskilling and working together as a Network LLC, an Ann Arbor, MI, lean production consulting
team. Changes could include developing team skills for firm. Previously he consulted on team based work systems. Lathin
workers and management, developing a culture of earned masters degrees in industrial relations from Purdue
mutual respect and cooperation across functional University and organizational behavior from Carnegie Mellon
groups and making changes to the labor agreement. University. He is a member of ASQ.
The second option for dealing with mismatches is to
RON MITCHELL is a founder of the Lean Enterprise Action
modify the preliminary technical system design.
Where it is determined that the organization will ini- Network LLC, an Ann Arbor, MI, lean production consulting
tially be too resistant to changes, some compromise in firm. Previously he consulted in quality and productivity
the ideal technical future state may be needed. This is improvement. Lathin holds masters degrees in industrial/organi-
often disheartening to system designers and manage- zational psychology from Central Michigan University and
ment. If it is remembered that the change process applied behavior analysis from Western Michigan University. QP

QU A L I T Y P R O G R E S S I J U N E 2 0 0 1 I 45