Lean is a Growth Strategy - Reprise

By Pascal Dennis

But Lean is about growth.

Too often we sub-optimize by focusing Lean (aka Toyota Business System) entirely on productivity & efficiency.

And you can't grow unless the entire value stream is engaged.

The system comprises three 'loops', in fact: Design, Make, Sell.

As it happens, one of my favorite Toyota senseis, Shin-san, was a sales & marketing executive!

Most Lean transformations focus on the Make loop, for good reasons.

Waste is most visible in Operations. But if we stop there, we'll miss the Mother Lode -- Growth.

For example, what if we fail to extend our Lean activities upstream into Sales?

A chaotic, lumpy sales profiles will force even the most splendid Lean factory out of its 'sweet spot.'

We'll have to buffer with inventory, lead time or capacity.

Engaging Sales entails uncovering invisible governance obstacles.

Incentive structures are perhaps the most common.

Why do I produce a lumpy, chaotic sales profile? Because I get a big bonus thereby!

We also have to engage other non-Operations groups -- Marketing, Design, Engineering, Planning & Scheduling...

That's what The Remedy - Bringing Lean Out of the Factory is all about.

A big challenge, but that's why we have managers.

(As Shin-san use to say, "No problem, no need for managers!")

Tip of the hat to Orrie, Art Byrne and the Wiremold leadership team, who saw all this a few decades ago!

So what's this mean for Lean practitioners?

Pascal

Pascal Dennis Bio

Lean is a Growth Strategy, Part 2

By Pascal Dennis

Last time I wrote about the three loops (Design, Make, Sell) and of the need to move Lean efforts upstream & downstream into the Design & Sell loops.

Today I'd like to expand on these ideas.

It makes sense to deploy Lean in the Make loop first, because value & waste are more visible there.

Defect waste in a Weld shop, for instance, means a pile of scrap which everybody can see.

(Hence, the Lean adage "make it ugly". In other words, make the problem painfully obvious.)

Defects in a Design process, by contrast, are often invisible.

A good CAD drawing looks the same as bad one.

Design WIP comprises magnetic signals on hard drives, and is also invisible.

The same applies in Sell loop processes. (A good, level-loaded schedule looks the same as bad one -- a matrix on a spreadsheet.)

Once we've locked in Lean fundamentals in the Make loop, we can move upstream & downstream.

To succeed there, we have to

1. Zoom out to see the entire chessboard, and
2. Understand the very different mental models in Sales, Marketing, Design and so on.

Let's not underestimate the challenge these pose!

(Translating Lean fundamentals for a Chief Marketing, Information, or Medical Officer is a fine test.)

Toyota is the leader with respect to Lean in the Design loop. How are they doing in the Sell loop?

Here's one data point.

Our family drives both Lexus and Toyota models so we're able to compare each dealership's capability & understanding.

Observations:

• Lexus dealerships have a deeper understanding & capability than Toyota dealerships
• Neither is close to that of a Toyota factory

So, in North America at least, even mighty Toyota has work to do in the Sell loop.

"Getting lean" is indeed an evolutionary process.

The bar keeps getting higher, as it should.

In summary, Lean is about growth. And to grow you have to deploy Lean upstream & downstream of the factory.

Best regards,

Pascal

Lean is a Growth Strategy - Part 1

By Pascal Dennis

But Lean is about growth.

Too often we sub-optimize by focusing Lean (aka Toyota Business System) entirely on productivity & efficiency.

And you can't grow unless the entire value stream is engaged.

The system comprises three 'loops', in fact: Design, Make, Sell.

As it happens, one of my favorite Toyota senseis, Shin-san, was a sales & marketing executive!

Most Lean transformations focus on the Make loop, for good reasons.

Waste is most visible in Operations. But if we stop there, we'll miss the Mother Lode -- Growth.

For example, what if we fail to extend our Lean activities upstream into Sales?

A chaotic, lumpy sales profiles will force even the most splendid Lean factory out of its 'sweet spot.'

We'll have to buffer with inventory, lead time or capacity.

Engaging Sales entails uncovering invisible governance obstacles.

Incentive structures are perhaps the most common.

Why do I produce a lumpy, chaotic sales profile? Because I get a big bonus thereby!

We also have to engage other non-Operations groups -- Marketing, Design, Engineering, Planning & Scheduling...

That's what The Remedy - Bringing Lean Out of the Factory is all about.

A big challenge, but that's why we have managers.

(As Shin-san use to say, "No problem, no need for managers!")

Tip of the hat to Orrie, Art Byrne and the Wiremold leadership team, who saw all this a few decades ago!

So what's this mean for Lean practitioners?

More next time.