| There is a problem in industry: we have gone into the | | | | tremendous reduction in lead-times and dramatically |
| 21st century with enterprises, organisations and | | | | enhanced responsiveness to clients' needs and |
| business structures conceived and designed in the | | | | expectations - astonishing reductions in product |
| 18th and 19th centuries to perform well in the 20th... | | | | development times - elimination of the division of |
| The principles that gave origin to industry were | | | | labour principle, replaced by the multi-skill |
| conceived back in 1776, when the British economist | | | | multi-function principle - much higher involvement of |
| Adam Smith published his famous book entitled "An | | | | personnel at all levels and incredibly higher levels of |
| Inquiry into the Nature and Causes of the Wealth of | | | | job satisfaction - drastically reduced supervision - and |
| Nations". Considering that in those times there was | | | | many others. |
| practically no industry, some very excellent principles, | | | | There is a name for this new, revolutionary approach: |
| conceived by a real genius, were laid out. Smith | | | | Lean Manufacturing, or manufacturing with no waste |
| visualised that the future wealth of the world would | | | | (where waste is the "fat" in the system). Lean |
| be founded and based on industry. Smith went also a | | | | Manufacturing has proved over the years to be |
| step further, engineering practical principles for the | | | | working very well: Smith/Taylor era has been |
| future would-be industry, including his famous principle | | | | shut-down once and forever, at least in the |
| of "Division of Labour" (the whole job to be | | | | manufacturing operations sector. |
| sub-divided into a number of elementary tasks, each | | | | But not all manufacturers have embraced the Lean |
| assigned to a dedicated, single-skill worker). | | | | approach: many still ignore it - many of them only |
| Those principles, that originated the "first industrial | | | | partially - many of them have rushed through a TPS |
| revolution", were actually deployed and applied | | | | course, introduced some form of "pull" or "kanban" |
| industrially only more than 100 years later, when the | | | | production, replaced some pieces of machinery, and |
| automotive industry was born. Introduced by Henry | | | | proclaimed themselves "lean". Pure deception. Their |
| Ford at the beginning of the last century with the | | | | amount of waste is still enormous. The Lean road |
| first industrial assembly chain, and then perfected in | | | | requires much more than a course and a few |
| the 30's by Sloan, general manager of General | | | | changes or some improvement here and there! |
| Motors, Smith's principles proved to be operationally | | | | And the other industrial sectors? They have been |
| valid and effective: productivity was well acceptable, | | | | much, much slower than manufacturers... |
| if not excellent. | | | | Take the project/construction sector, for instance. |
| Sloan, actually, went one step further: since the | | | | This industry is in some ways not completely shifted |
| principle of labour division was working so well in the | | | | from craft to mass production - much less to lean |
| shop floor, why not applying the same concept to | | | | production. On the other hand, the industry has |
| Management? Functions (administrative, financial, | | | | followed the mass production model in its extensive |
| commercial, production, maintenance…..) and Roles | | | | division of labour and hierarchy-based management, |
| were thus invented, resulting in a number of different | | | | Smith & Taylor style. The consequences? 1) Cost |
| managers each taking charge of a different functional | | | | Overruns 2) Delays on Schedules 3) Waste. |
| area of the organisation. | | | | 9 out of 10 projects show cost overruns (of up to |
| Frederick W. Taylor, one of the first industrial | | | | 50%, and even more). Overrun is found in over 30 |
| consultant in history, perfected even further Smith's | | | | nations on 5 continents. Overrun is constant for the |
| and Sloan's principles, developing his so-called | | | | past 70 years. Delays on completion are typical, |
| "Scientific System" already in 1911. Like Smith and | | | | constant, chronic features of most project works. |
| Sloan, Taylor focused acutely on "efficiency", their | | | | Waste is in many cases of astronomical proportions. |
| common driving force. Taylor's newly introduced | | | | Wasted labour can amount up to 70% (yes, seventy |
| principles were: | | | | percent) of the total labour content (just spend 10 |
| 1) levels of management (so that each manager | | | | minutes observing carefully any construction site at |
| would take care of a controllable number of | | | | any random time in any random day and watch |
| subordinates | | | | people "working": you will discover that most people |
| 2) clear definition of roles, responsibilities and | | | | on site are carrying out non-value-adding activities |
| authorities (so that everyone would know what to | | | | such as handling, moving, transporting, idling, talking, |
| do, what to be accountable for, and what would fall | | | | preparing, searching, walking... or making or repairing |
| under his area of competence and authority) | | | | mistakes... - as opposed to adding value to the object |
| 3) strong accent on "planning" and "control" (so that | | | | of the project). The 3 consequences above are |
| subordinates' jobs, at each hierarchical level, would be | | | | strictly interlinked and have a common denominator: |
| planned properly - and then monitored by their | | | | an inadequate organisational system and an |
| respective supervisors). | | | | inadequate style of thinking. |
| In a nutshell, according to Taylor, for an organisation | | | | And the service industry? And the public sector? |
| to function efficiently it should be "structured" | | | | Exactly the same. The level of wasted manpower is |
| hierarchically and "organised" like a Swiss clock: every | | | | un-measurable. |
| detail should be taken care of - every little gear | | | | The level of dis-service or poor service found in |
| should turn properly, accurately and efficiently. Terms | | | | airlines, airports, banks, insurance companies, hospitals, |
| such as "Role Description" and "Job Description" were | | | | hotels and any other service provider (such as power |
| invented at that time. | | | | generating/distributing companies, telephone |
| Taylor took into due consideration also another | | | | companies and the like) is often astronomical and, |
| principle initially introduced by the US Railways already | | | | unfortunately, on the increase - world-wide. With few |
| from 1860 (the time of the far West...). Since | | | | exceptions. |
| railways were single-track, accidents (trains collisions) | | | | In parallel, the level of value, attention and care given |
| had to be prevented. The solution was simple: rules - | | | | to clients is getting poorer and poorer. Banks still |
| there had to be rules. So that engine drivers would | | | | make mistakes and let you cue indefinitely. Insurance |
| know what to do and what-to-do-not, respecting | | | | claims get settled (when they do get settled) after a |
| rules (signals, timetables….). Obviously, in a | | | | long, painful struggle. |
| rules-governed environment, there must be someone | | | | Hospitals still feature room shortages and long waiting |
| who thinks of and makes the rules, and someone | | | | times for an intervention (not to mention |
| else to obey and comply with the same. That's | | | | mistakes…). Luggage still gets lost by airlines and |
| actually how "bureaucracy" was initiated. | | | | delays on scheduled departures are chronic. Instead |
| This "Functional-Tayloristic" industrial model had its | | | | of a passenger, you become a seat number. You |
| glorious times in the 1950's - 1960's. Yesterday's | | | | open a bank account and become an account |
| industry was born. | | | | number. In a typical hotel, you become a room |
| But also today's industry was born. | | | | number. You report a fault to a telephone company |
| Yes, because still today most enterprises, business | | | | or a power distribution company and you become a |
| organisations and governmental structures are built | | | | reference number. If you have some complaint or |
| according to the first industrial revolution principles. | | | | want satisfaction, you are referred to a "call centre" |
| Maybe with some changes here and there - but not | | | | (mass production! heritage of the Smith & Taylor |
| many. | | | | mentality) where you are nobody and have no joy. |
| The alert reader will now ask: "so, what is wrong | | | | The list could carry on forever. |
| with that"? Well, not much, except for the fact that | | | | What is the problem? Organisations (or most of |
| these principles are rather "dated". | | | | them) seem not to be able to cope with the |
| Because the world changed. When? No-one knows. | | | | complexity associated with the changing environment. |
| Someone says 12 years ago, someone else says | | | | The more pressure is put on them and the more |
| 15-18 years ago... But that is not so important (the | | | | corrective measures they try to adopt, the worse |
| world, actually, has always been changing). What is | | | | the failures! It's the final coma of the first industrial |
| important instead is the degree of acceleration of the | | | | revolution system, culture and mentality. The only |
| change: faster, and faster, and faster, What has | | | | way out of this vicious circle is a revolution in the |
| changed? Everything. From any angle of view: social, | | | | opposite direction. That's where Lean Thinking comes |
| political, economical, financial, commercial, | | | | to the rescue. |
| technological, informatical…. The main differences | | | | Lean Thinking (LT) - that's the name given to this |
| between Smith's and Sloan's and Taylor's world and | | | | rather recent industrial philosophy and operational |
| today's world are stability and predictability. Smith and | | | | discipline - is the extrapolation of lean principles, |
| Taylor lived in a rather stable (almost static) and well | | | | implemented from long time in manufacturing |
| predictable world. We don't. What was true and | | | | operations, for their deployment in all economical |
| certain yesterday is most probably no longer valid | | | | sectors (project - construction - services - continuous |
| today or tomorrow… Moreover, this world of ours | | | | processing - public sector - etc.) as well as in all |
| becomes more and more complex by the day. | | | | enterprises' processes (administrative, product |
| Take clients, for instance. Also clients have changed | | | | development, accounting, etc.). In a nutshell: LT |
| dramatically and are still changing. They demand more | | | | focuses over the removal of waste from the entire |
| and more. Today's clients are real "monsters", never | | | | Value Chain. |
| satisfied, never happy. They want more and more, | | | | The main targets? Maximisation of value to the |
| faster and faster. Today's client want what they | | | | (monster) customer. Drastic elimination of waste in all |
| want, with the features they want, with the speed, | | | | processes (core and support) that generate value for |
| pace and timing they want, at the price they want, | | | | customers. Elimination or drastic re-dimensioning of all |
| and even with a smile on top (the cherry on the | | | | those processes (and functions) that do not |
| cake). They are pretending, they are demanding, | | | | contribute to generate value to the customers. |
| they are absurd sometimes in their requests. | | | | Minimisation of all times required to provide value to |
| This facts alone puts a tremendous pressure on any | | | | the customers. Zero defects, errors and |
| industrial, commercial, business and governmental | | | | non-conformities. |
| system. The impact is enormous. | | | | How are these achieved? By scrapping once and |
| That's where we start discovering the deficiencies of | | | | forever all the principles of the first industrial |
| the Smith/Taylor system, which does not seem to | | | | revolution. |
| be ready to cope with that pressure and impact. This | | | | In practice: flattening of organisational structures - |
| became evident already in the late 60's - 70's. | | | | thorough re-engineering of the organisation "per |
| Pipe-smoking consultants and university professors | | | | process" and not "per function" - insertion of multi-skill |
| started squeezing their brains in search of new | | | | multi-function workers/operators/employees in |
| methodologies, management techniques and | | | | value-generating processes, which they self-control |
| sophisticated organisational philosophies, with the aim | | | | and for which they are accountable - continuous, |
| of helping industry and business organisations to | | | | uninterrupted flow (of the necessary value-adding |
| remain competitive, to increase efficiency and | | | | activities) triggered and "pulled" by the customers - |
| productivity, to excel or at least survive in a world | | | | continuous aim at lean excellence, by eliminating the |
| becoming more and more turbulent. Hundreds of | | | | residual, inherent or surrounding waste. This is done |
| disciplines have been invented over the last 40-50 | | | | by deploying operationally a number of "lean" tools: |
| years. To mention just a few: Management by | | | | tools for "seeing" the waste - tools for "measuring" |
| Objectives, Effective Leadership, Diversification, Z | | | | the waste - tools for "mapping" the waste - tools for |
| Theory, Situational Leadership, Effective | | | | "scrapping" the waste - tools for enhancing value and |
| Communication, Zero-based-Budgeting, | | | | value added - tools for generating lean opportunities - |
| Decentralisation, Team Building, Management by | | | | tools for lean, creative thinking - tools for continuous |
| Exception, Dale Carnegie techniques, Interpersonal | | | | improvement in the "lean" direction. |
| Skills, Quality Circles, Excellence, Restructuring, | | | | LT principles can be applied to any industrial, |
| Portfolio Management, Interactive Management, | | | | commercial and human activity. They can be applied |
| Matrix Organisational Structure, Kaizen and Continuous | | | | to commercial and trade operations, to office work, |
| Improvement, Total Quality Management, ISO 9000, | | | | to health practices. Under the larger LT umbrella now |
| 6 Sigma, Theory of Constraints..... and One-Minute | | | | fall disciplines such as Lean Manufacturing |
| Managing...... | | | | (manufacturing industry) - Lean Project & |
| All of them have somehow succeeded in bringing a | | | | Construction Management (project-driven industry) - |
| bit of fresh breeze on slack enterprises' sails. But all | | | | Lean Processing (service and public sector) - Lean |
| of them have also failed because most organisations, | | | | Kaizen (all sectors) - Lean Accounting (all sectors). |
| still today seem not to be able to find their way to | | | | Obviously, disciplines are disciplines, and tools are |
| real performance and high, stable competitiveness, in | | | | tools. They can be learnt, they can be obtained, they |
| spite of their hard efforts. | | | | can be purchased. Culture cannot. Modern, industrial |
| The real break-through came only in the 80's. The | | | | lean culture can only be "fabricated" in-house, within |
| Manufacturing Industry started feeling the hard pinch | | | | the organisation, by those concerned - starting from |
| of the environmental change almost 30 years ago. | | | | top management. |
| The famous TPS - the Toyota Production System - | | | | This is the hardest and trickiest part of the transition |
| created the revolution in manufacturing. Just-in-Time, | | | | to "lean": changing culture. Unfortunately, the Smith & |
| Flow Production, and other allied disciplines such as | | | | Taylor heritage is very heavy. It has taken |
| Total Productive Maintenance, Quick Change-Over | | | | generations to digest and implement the principles of |
| and Total Employee Involvement were then | | | | the first industrial revolution. It will take years or |
| conceived and systematically deployed at Toyota, in | | | | decades to digest those of the second one. Our |
| Japan, and gradually all over the world. Their | | | | industrial DNA is heavily polluted by traditional |
| common-base principles? Exactly the opposite of | | | | principles. We are still in love with the mass and batch |
| those preached by Smith and Taylor. After all, the | | | | production mentality, with traditional planning, |
| Smith/Taylor system was good and right for their | | | | supervision and control. With order and efficiency. |
| times, when people had limited or no education, and | | | | With roles, authorities and job descriptions. With rules |
| industrial culture didn't even exist. The Japanese were | | | | and procedures. Even hairdressers, retailers, and |
| the first to realise the draw-backs of the system: | | | | housewives (yes, housewives!) have fallen in love |
| based on localised "efficiency" associated with mass | | | | with batch production principles. The resistance to |
| production and economies of scale, the system | | | | "lean" is and remains heavy. |
| overlooked or ignored completely the "fat" between | | | | We'll need to "slaughter", to change skin, like snakes |
| points of efficiency, around and above them: all the | | | | do. We'll need to transform managers into coaches. |
| non-value-adding activities (such as handling, moving, | | | | We'll need to "fabricate" a new breed of people, |
| transporting, storing, parking, stockpiling, controlling, | | | | people driven by value principles and not by "job" |
| inspecting…. and searching, idling...) between or | | | | principles. People dedicated to re-conceive, improve |
| around "points of efficiency" - all non-value-adding | | | | and perfect the processes they handle, which they |
| activities in the very "points of efficiency" (such as | | | | can understand, and for which they are responsible. |
| making mistakes or producing defects, or machinery | | | | People who enjoy working and producing value, and |
| breaking down, or idling, or stopping... or lines or | | | | draw satisfaction from it. New millennium craftsman in |
| machines being set-up for production...) - and the fat | | | | their workshops. New millennium traders in their shop. |
| associated with the governing structure above | | | | In strict contact with their customers. People to |
| (management waste: such as waste in supervision, | | | | whom pride and professional and work dignity, |
| waste in control, waste in inadequate or | | | | usurped by over a century of labour division and |
| un-necessary planning, waste in bureaucracy, waste in | | | | top-control practices, will finally be given back. People |
| paperwork, waste in meetings...). | | | | who can think: lean (that's why the name: Lean |
| Two core key-words were identified by the | | | | Thinking). It will take time. |
| Japanese: value and waste, the one the enemy of | | | | Yet, lean practices start being deployed in many |
| the other. By systematically eliminating waste and | | | | areas other than manufacturing operations: project |
| perfecting/enhancing value-adding activities, the | | | | works - health industry - retail sector - insurance |
| Japanese first and then the Western Manufacturers | | | | companies - to mention just a few. And there are |
| have reached tremendous goals: productivity | | | | examples even in the public sector. The results are |
| improvements above 100% (compared to the mass | | | | astonishing and very, very encouraging. |
| production/efficiency-based system of before) - zero | | | | There is space for lean. There is hope to make this |
| defects in the quality domain - zero break-downs in | | | | world of ours function in a better, leaner, value-based |
| the plant/machinery area - almost zero set-up time - | | | | way. |