Lessons from the Lean Transformation of a Small Manufacturing Company Lean is often considered as a strategy for large corporations, but in reality Lean is better suited for small businesses and even non-manufacturing operations. Here are 3 ways to make Lean work for you regardless of your size or industry. Vivek Naik

1. Ways to Make Lean Work for
You
L e s s o n s L e a r n e d T r a n s f o r m in g a
Small Manufacturing Company
Vivek E. Naik
2012 International Conference on
LEAN & SIX SIGMA

2. A Story of a Small Company
“We will lose one of our largest customer
if we don't ship this order on time”
SAID THE BUSINESS OWNER

3. The Problem
 Most of the customers were upset about the 20+ day
long lead time.
 Loosing this customer could mean a significant loss
for the company

4. Current State On That Day
 This company is a small Manufacturing company
 Business had grown from small start to full-fledged
manufacturing operations
 The initial growth was handled by addition of more
and more unskilled labor
 They expedited orders when customers screamed for
it

5. Did They try to improve the processes?
 They just did not have time for it
 Often everyone was diverted to expedite one order
 Same thing happened that day
They tried to get this one order out within 3 days

6. But Something was different this time?
 Stakes were high
 They could not afford to lose this customer
 It made them wonder
“Do we really don't have time to change the way we
operate”

7. The Result
 They realized there was no option but to change in
order to survive and grow
 This was their
“Burning Platform”

8. Chaotic shop floor
People were unaware of
the Standard Process
Without Standard
process it was
impossible to get any
Cycle Times
No proper location for
parts
Our Platform is Burning but Where
All this lead to lot
waste do We Go?

9. No Access to Needed Information
 There was no data about production, Open orders,
Quality, delivery
 Production was not able to know:
 How many and what orders are open?
 Which orders are overdue?
 What needed to be shipped that day?
 Without this stake in the sand we were not sure where to go

10. So what was the answer?
“Lean”
 Someone suggested that Principles of Lean
Manufacturing will provide the solution

11. So isn’t Lean only for big guys?
 They believed that lean could not be applied in their
case
 But, in reality, Lean is better suited for smaller
business and not necessarily manufacturing
operations

12. Why Small is
Good?
“It is easier to change the course of
a boat than to move an iceberg” –
Anonymous

13. Why Small is Good?
 Bigger organizations have too much inertia even
though they may have more resources at their
disposal
 A smaller organization, on the other hand, is much
more flexible and responsive to change
 Small organizations have few levels of management
 This helps to avoid problems of miscommunication
because the head and the tail are not very far away

14. Constraints of the Small Company
 Small organization cannot spend millions or stop
everything to start a formal program, but…….
“Is that Lean in true essence?”

15. What is Lean in True Essence?
 Lean has to start organically within the organization
 You don’t need experts to start lean though it may be
helpful
 You can learn lean principles by systematic and
religious application of common sense
 Everyone has to go through the journey to practice,
Learn and apply lean in a way that is suitable to their
unique process

16. What did they do?
 They did not stop the lines to hold the events.
 They just did improvements when the lines were
down due to broken machine or delay in getting
parts
 They started small and thought big, from just one
workstation to entire shop floor
 They trained our people to solve their own problems

17. Their Achievement
 They have tremendously improved their delivery from
20+ days to 97%+ of the orders shipping within 3 days
 This is story which many people can relate to especially if
you are in small manufacturing company
 Success may vary from place to place
 We will explore the reason why and how to get started
using some of the lessons I learned working for small
company

18. Lessons Learned Along the
Way
HOW CAN YOU MAKE LEAN WORK FOR YOU?

19. You Don't Need To Solve All
Problems To Be Successful
LESSON 1

20. The Assumptions
 We need a roadmap to apply lean with every detail
planned out from beginning to the end
 We have to solve each and every problem that is out
there
 The thought of solving so many problems at once is
over whelming and stops many before they even start

21. Breaking the problems
down and tackling only
the important
problems is necessary
(80/20)
Don’t try to solve
everybody’s problem
yourself
Only Few need creative
skill to solve
There is a big chunk of
problems at the bottom All Problems are Not the Same
of the pyramid

22. How do You Solve Such a Big Chunk of Problems at
the Bottom of the Pyramid?
 Train and empower all your people to solve their own
problems
 When you allow the people who run the process to
also do the improvements, they own the change
 This is helpful in sustaining the change
 Also the synergistic effect of everyone solving the
problems gives a tremendous momentum to your
change process

23. What to Remember
Only few important problems need to be tackled to make
a big impact. If you tackle the top 20% of issues, it will
help you achieve 80% of the solution.
Problems are like a pyramid – there’s a huge base of
simple problems which can be easily resolved and small
set complicated problem which needs creative problem
solving skills.

24. Start By "Cleaning House" And
Standardizing Processes
LESSON 2

25. Clean Work Place Is Efficient and Safe
 Having a place for everything, and getting rid of
unnecessary tools and parts, makes it easy to find the
necessary tools and parts
 This helps you to work more efficiently
 Another advantage is that you immediately know if
anything is missing from its place

26. 5S
 The word 5S stands for Sort, Straighten, Sweep,
Standardize and Sustain
 5S could be a good starting point of any lean
transformation and forms a catalyst for a culture of
change
 Due to the very visible results it makes the process of
buy-in easy for both the shop floor personnel and
management

27. Do what you preach
Learn the process before
teaching others
For everyone their
workspace is special and
most would not like to
change it
It is humbling to realize
how difficult it is to be
changed than to change
others
Start with your own personal
workplace

28. Choosing the right
people guarantees
success and creating the
right first impression
This initial team will
help in promoting and
spreading the things
learned
Don’t make it a project
Allow things to be done
during routine time
Do it in steps to allow
people to get
comfortable and stable
in their new Choose the team of people who are
environment before
moving to next step most supportive to the change

29. What to Remember
Some of the key points of how 5S helps in laying down the
foundation of Lean Transformation are:
•Standardization of process provides a stable base for
incremental improvement
•Visible results helps boost morale of the people who
then take pride working in the area
•It is an enabler of “Continuous Improvement” culture
•Prepares the workplace and people for implementing
other Lean tools

30. Motivation Gets You Started
But Habit Keeps You Going
LESSON 3

31. Why Sustaining Lean is Difficult?
 Lean transformation works beautifully in the
beginning but many fail in sustaining the efforts
 This is not the fault of the people involved but the
way traditional management works

32. Why Traditional Management Fail
 Traditional management is results driven
 It is mostly concerned with the end result and not
the means to get there
 This leads malpractices like expediting orders, over
production, and excess inventory

33. Lean Management
 Only by support and proper leadership/guidance you
can drive your people to continuously improve the
processes that add value to the customer.
 The management system that helps you to achieve
this is a Lean Management system.
 Lean Management system uses various tools to
connect the purpose (Providing value to customer) to
the process and people.

34. Lean Management
Elements of Lean Management:
 Leader Standard Work
 Leader Standard Work sustains the systems and integrates
the changes made during the transformation process
 Daily Accountability
 Visual Controls
 Visual Control and Daily Accountability helps keep the
process and people aligned to solve problems as they arise
 Discipline
 Discipline of the leader ensures that standard work is
followed and the whole system works coherently
From: “Creating Lean Culture” by David Mann

35. What to Remember
The elements of lean management, helps the leader to be
accountable to the process by religiously following the
“leader standard work” and discipline to the point they
become a habit.
This change in habits is essential for mental transformation
required in a lean manager

36. Continuing the Journey
CONTINUING THE “CONTINUOUS IMPROVEMENT”

37. Continuous Learning
 Continuous learning is essential for continuous
improvement
 To learn we need to experiment
 We need to accept failures in our trials as means to learn
something new
 Raise the bar with every improvement.
 What was acceptable yesterday may be the focus for
improvement today and tomorrow may need further
work again.
It cannot be “Continuous Improvement” if we stop
doing it!

38. By three methods we may learn
wisdom:
Wisdom First, by reflection, which is noblest;
second, by imitation, which is easiest;
and
third by experience, which is the
bitterest.”
– Confucius
Reflecting and knowing why is critical
Copying is easy but you cannot learn unless you try it
yourself may be fail many times before you get it right

39. The End
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