22 November 2013

If the only tool you have is a hammer, you tend to see every problem as a nail...

By Xavier Perrin (xperrin@xp-consulting.fr)

The lean approach, often discussed in this blog, is now considered essential for our companies' competitiveness. At the same time, this approach is becoming more and more criticized. Disappointment is often observed when the results don't meet the expectations, or don't last. And sometimes, although the lean approach is presented as human-centered, its deployment happens to the detriment of employees, the only goal being short-term competitiveness improvement. These topics being widely treated already (project management, change management, sustainability...), I won't talk about it here.

The Abraham Maslow quote I chose as this article's title – If the only tool you have is a hammer, you tend to see every problem as a nail – is, according to me, a perfect summary of a common but seldom mentioned cause of these disillusions following the setting up of some lean approaches. What is it?

Most of the time, lean projects and action plans are set up as a goal in themselves. The easiest way to notice that is to observe how these projects are initiated. For instance:

  • Managers took a training program or attended a conference that convinced them that lean would benefit their company: reduction of WIP, reduction of lead times, improvement of service level and increase of productivity... They then managed to convince the board of management to adopt these practices.
  • Others heard via their network about remarkable performance improvements as the result of a lean project, said project being a success thanks to the support of some consulting company (probably named something-lean, or lean-something).
  • In a given company, an important manager “strongly suggested” to carry out a lean project in order to pick up an unacceptable delivery performance...

A lean project/workshop is then started. A team accompanied by an expert is formed. Products and processes are analyzed in order to identify the value streams. One is chosen as a pilot. Its current situation is described using Value-Stream-Mapping (VSM). Improvement opportunities are identified and the future state VSM is drawn up. The action plan is carried out, and soon enough, it is noted that the performance has dramatically increased: reduction of WIP and throughput-times, increase of one-time deliveries and improvement of productivity. Other projects stems from the enthusiasm induced by this one's success...

And yet, sometines, as months go by, the performance starts decreasing again, even though everything apparently worked so well. Doubts appear. Seeing the performance's decrease and under the unsatisfied customers' pressure, the standards that were swore to be respected at all costs are forgotten. “Emergencies” override the kanban priorities, even if kanban allowed stabilizing flows... The “firefighter mode” that they managed to give up thanks to the stability created by levelling, standardization of work and lead time control is back... And finally, people bitterly come to the conclusions that after all, lean isn't so great...

Where is the mistake?

The mistake is to consider the process (the hammer) before diagnosing the current situation. To put it differently, to choose the hammer before knowing if you'll have nails to hammer in, screws to screw on or holes to drill. Lean process isn't an all-purpose device capable of solving any kind of problem.

One of the recurring malfunctioning in companies suffering from flows weaknesses (poor service level, high inventories and long lead times) is the failure of the planning system. There is no Sales and Operating Planning (S&OP) process, or it is incomplete and only consists in reviewing sales forecasts. Master Production Scheduling (MPS) is viewed as backlog management process... Materials Requirements Planning (MRP) parameters haven't been revised for a long while. Actually, we can barely remember how it is supposed to work... Shop Floor Control (SFC) mainly consists in looking for missing parts and in defining the day's emergencies.

To begin a lean project in such circumstances is doomed to failure. Or I should say, to begin only a lean project  is doomed to failure. It doesn't mean one shouldn't begin with rolling out some lean basics: allowing performance indicators to evolve, reducing WIP, creating/revising standards, establishing housekeeping practices, defining value and mapping value streams. But the priority is to bring back/set up a decent planning process. But, some expertise and knowledge are required in order to do that. Make sure then that the something-lean or lean-something consulting company got the right tools, and not just a hammer...

By Xavier Perrin (xperrin@xp-consulting.fr)

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