How lean are you? Part 2

In previous post I described the lean awareness assessment, a relatively simple but not very effective way for assessing leanness.

Its weak point is the assumption lean awareness and operational performance are correlated and this causation is taken for granted. While this assumption makes sense and may be true, experience shows that this cause-effect relationship is not systematic.

It soon becomes obvious that Lean awareness should be checked versus operations’ performance level. This adds a second dimension to the assessment and allows scoring within a two dimensional matrix.

 Bandeau_CH1

Four basic cases

A simple four quadrants matrix is very helpful to categorize an organization among four basic types. Instead of naming each type and explaining it I invite you to read the explanation and guess the name.

Lean Assessement Matrix

1) high awareness low performance

As described in previous post, many organizations may have very lean aware executives, managers, techs and personnel but there is no evidence of lean benefits on shop floor nor in operation’s performance indicators.

While concepts, methods and tools are known, at least in executives’ level, there is little evidence of them in ops and performance is low in comparison of other competitors or similar companies.

I call these organizations “theoreticians”.

2) low awareness high performance

These organizations perform well but at the expenses of their resources. The products are manufactured and delivered at high costs and/or capacities as well as material are wasted. Manpower is sweating to achieve these results or staff is plenty, more than really necessary or staff is working overtime often.

I call these organizations “effective” as they deliver timely (when really required) the awaited products and hopefully make some profit despite all the wastes. Profit could be higher, costs lower or spent energy more reasonable.

Until recently pharma industry was in this category, as sales profits were so high it wasn’t meaningful to strive for leaner operations, any investment in additional capacity eventually paid off. In case of pharma, capacities have often been wasted, low OEE being compensated by investments in additional capacities. Quality is worshiped at a point that any doubt leads to product or material destruction rather than trying to master processes. Times are changing and pharma has to consider leanness.

3) high awareness high performance

This quadrant is the quadrant of best in class, of operational excellence. Knowledge of Lean principles, methods and tools translate into operational practices, yielding good results at lowest costs and resource consumption.

These organizations are “efficient”.

4) low awareness low performance

The last quadrant is the all-danger zone in which the organization shows no awareness about Lean principles, methods and tools nor good operational performance.

If this is a start-up, it is understandable (but no excuse, Lean start-ups do exist!) but in any case this company should react swiftly and jump out of this deadly corner of the matrix.

I found no suitable name for organizations in this quadrant, feel free to suggest one!

When facing such a case in my consultant job, I urge the top management to get out of this “endangered” position, my best naming so far.

What course?

From low/low to high/high, no interest to lose time getting theoretical knowledge first (quadrant “high awareness low performance”) as performance is more important for immediate survival than knowledge. In a pragmatic way, it’s okay to go for “low awareness high performance” first, and then working to get efficient, thus heading for high/high.

Another route, more ambitious, is to head straight for high/high, trying to both improve performance and lean maturity. This may be difficult and risky.

>The next post deals with how to plot the position point in the matrix.

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