Getting Started on the Lean Journey:

First, Take a Walk!

By Jim Womack, President of the Lean Enterprise Institute
We at LEI often get calls from mid-sized and small manufacturing firms asking how they can
get started creating a lean business. The caller may be the president or a plant manager or
the head of an improvement group, but the first question is usually the same: "How can I find
a sensei?"

We understand this desire to find an expert teacher in lean techniques, but this shouldn't be
your first step. The best way to get started is a simple "self-assessment" walk. We advise the
caller (let's assume it's you) to go to the gemba (the shop floor, the engineering area, the
production control and order management department, i.e., where the rubber hits the road).

Once there, pick a product family from the customer end of the value stream, based on
products that pass through similar processing steps and over common equipment in your
downstream processes. Selecting the product family based on upstream fabrication steps
that serve many product lines in a batch mode won't give you what you need.

Once you've picked a product family, put yourself in the position of your customer and walk
backwards to trace the design, order and physical product from launch back to original
concept, from delivery back to the sale, and from finished product back to raw materials.

As you do this ask some very simple questions:

· Does this product provide the precise value sought by the customer? Partly this is a
matter of delivering a defect-free item on time at a competitive price, but does
the product really speak to the customer's current and emerging value needs? Or
is it a reflection of what the company wants to make with assets and an
organization suited to the past? (It's amazing how many manufacturing
companies run backwards, taking their mission in life as working harder and
harder to more efficiently provide customers those products the company most
wants to make. When customers balk, manufacturers often focus on further cost
cutting as a response, but improved efficiency won't help for long if your value
proposition is wrong.)

· Is the value stream for this product – that is, the actions currently required to design,
order, and produce it – mostly value creating? Answer this question objectively
by putting yourself in the position of your customer. Simply: "Am I willing to pay
for each of these activities?" No customer will ever say they want to pay for
rework, storage, scrap, and unnecessary motions, yet these wasteful actions
probably account for the great majority of effort along the value stream for your
product!

· Do the design, the order, and the product flow continuously through the necessary
activities to reach the customer? This question comes alive – often in a shocking
way – when you simply add up the time required for all of the value creating
activities and compare this to the time currently required to get from start to
finish. Typically less than a third of the time currently needed to get through
product development is value creating, and the value-creating fraction of order
processing and production time is often below one percent! The rest of the time
is for backtracking, rework, and waiting.

· Can the customer pull this product from the value stream – that is, can the customer
get just what they want, when they want it, without your firm holding a mountain
of finished goods just in case? Many firms are now diving into e-commerce with
fancy web sites backed up by massive finished goods or parts warehouses and
wildly gyrating schedules running back upstream to manufacturing and suppliers
(e.g., Amazon.com and Webvan.com). With sufficient effort and enough
 inventories, customers may consistently get what they want when they want it,
although we are skeptical. We remember Taiichi Ohno of Toyota's famous
aphorism, "the more inventory you have on hand the less likely you are to have
the one item your customer actually wants." But even if the customer gets good
service, can any company letting customers "pull" in this manner hope to make
money?

· Is the performance of this value stream steadily improving? Is value being

continuously rethought in response to the customer? Are wasted steps being
continually removed? Is the velocity of the design, order, and object continually
increasing? Is customer response continually getting faster and more accurate? In
other words, are your managers moving steadily toward perfection – the happy state
when you can provide pure value to your customer with zero waste?
If you complete your walk and find that the answer to each of these five questions is a hearty
"yes", then you don't need to think further about lean enterprise. You are lean already without
even knowing about it! If you still aren't getting an adequate return on assets or sales, the
problem must lie elsewhere – structural problems in your industry, slipping customer need for
your category of products, etc. However, if you complete your walk by answering "no" to most
of these questions, it's time to think about getting lean. But it's still not time to find a technical
expert. Instead ask yourself a few more questions:
· Who is in charge of the value stream for each product? If your products are orphans
wandering as best they can through a functional organization, we urge you to
assign a value stream manager for each product. No amount of lean technical
assistance will make much difference if there is no one for a sensei to work with.
To have any success the value stream manager's vision and authority must
extend across departmental boundaries to make things happen, regardless of the
organizational structure.

· Who will stand behind value stream managers when their actions start to create
stress in your organization? We call this person the change agent, the manager
at whatever level who leads the charge for change. How about you?

· Where is it most useful to start? If your value stream walk shows that reliable
customer response is your most pressing problem, perhaps you should be working on
Total Productive Maintenance and six sigma quality. Reducing set-up times or
cellularizing processing activities may be irrelevant or even impossible until you deal
with process capability issues. The key point is to start with activities the customer
will immediately benefit from, not with initiatives that are technically intriguing or
exhilarating for managers!
Once you've taken a self-assessment walk and figured out where to start, you may conclude
you need a sensei with lean technical knowledge. We'll talk in a future article about how to
find one.