TOC Lean ERP and Six Sigma

What’s possible:

Take advantage of whatever investment of time, money and energy you have already made in an improvement technology such as Lean, ERP or Six Sigma, regardless of where on the spectrum of results you are today.

If you’ve had great “localized” results that have made serious contributions to the bottom line – we can improve it. A lot.

If you’ve had great “localized” results that didn’t seem to reach the bottom line – we can transform that situation to a solid ROI, quickly.

If the results have been truthfully very disappointing, even if your people are demoralized and frustrated, and even if there’s a lack of trust in anything new that management bring to the table – we can transform that quickly and regain full employee support almost immediately. .

By adding Focus and Leverage we can help you gain fast and dramatic performance improvements that translate into Competitive Edge advantages and ROI boosts very quickly. And we can do so without any appearance of “mixed messages” or backtracking on any stances you championed.


Owners and managers today are between a rock and a hard place. Maybe it’s always been so but it’s the worst I’ve known it, in 40 years in this industry.

The problem they have is that they are usually smart people, with experience. And they hire smart consultants, with experience. And they implement technologies that are the go-to technologies for high performance, for World Class, according to EVERY authority on this planet. Business Schools, Colleges, Universities, Professional Organizations. Government Organizations intended to help business. All the Major Consultants. Most of the Independent Consultants.

– Lean
– Six Sigma

And while they will almost never concede the point, internally or externally, many of these companies experience disappointing results. Especially at the ROI level, even if they’re happy with some internal improvements.

But often they are disappointed at the competitive edge factor level, too. And sometimes they achieve competitive edge improvements – they thought. But they simply don’t translate into increased sales (and profits). And they can’t figure out why.

Now, this is NOT true of all companies who take the “do what everyone says is right” route.

Some Lean implementations for example are highly successful, even inspiring. Some ERP implementations go fairly smoothly and at the end, people feel they have a superior business system in place, and their employees value it and use it. And Six Sigma is a very honest technology; when it’s used appropriately it can yield impressive results.

But while it’s apparently not OK to speak out loud about it, I’d say that the VAST MAJORITY of companies I encounter are highly dissatisfied with their ERP implementations.

And the same managers who tell me they are happy with their Lean investments, who even rave about their Lean implementations and can’t wait to show me the shadow boards on the shop floor (which is sometimes as far as “Lean” went in their environment!) — will also admit — in private, reluctantly — that they can’t point to a single dime of ROI or a single customer they won away from a competitor as a result of their internal improvements.

(What they often don’t realize is that even Lean advocates have acknowledged a failure rate roughly between 70% and 95% depending on how “failure” is defined. But certainly in terms of ROI. And this has been true for 20 and more years. And you shouldn’t take my word for it — you can prove this to yourself in about 30 minutes with year-by-year Google searches.

What’s astonishing is that this surprises anyone.
The Legends who built the Toyota Production System, and especially the genius Taiichi Ohno, were looking for a specific solution to some specific problems. What emerged after decades of trial and error provided the solution in THEIR environment. It works beautifully when certain conditions are in place.

But EVERY powerful solution works inside certain boundary conditions. The methods that were such a powerful solution inside Toyota were never developed to be a Universal solution. When you apply the elements of that solution in situations where those “best fit” conditions largely exist, outcomes can be superb.

But if you apply the same “proven” solution in an environment where those conditions are NOT met, you get disappointing results (where “fragments” of Lean produce genuine but localized improvements only) or even complete failure.

To bring this point home: there is a high-profile Japanese manufacturer, a name that is VERY well-known in Western industry, that tried multiple times to make Lean work. They are based in Japan. It was an embarrassment to management that they could not make Lean work. They hired the best of the best of the best to help them. And EVERY attempt failed. Every time, they (and of course the external consultants) were convinced they were just doing it wrong.

Reluctantly they eventually gave Theory of Constraints a shot.

The PUBLISHED outcome was lead times cut in half. Due date performance boosted from 40% to 85%. A 20% increase in sales in a stable market. And a FIVE-FOLD increase in profits despite the raw materials costs increasing more than 20% at that time. Their new profit ratio became the highest EVER recorded for this type of industry.

No-one is arguing that Lean isn’t powerful. But what even the Lean consultants don’t seem to understand is that EVERY powerful solution works within a set of Conditions. You can’t simply ignore that and act as if a solution fits everywhere, all the time.)

But here’s the Rock and the Hard Place.
In fact, there are more than one.

First is, these things — ERP, Lean, Six Sigma — just make so much sense, when they’re explained, don’t they? And even more so as you get deeper into them.
So if you’re struggling … it’s easy to conclude that it must be your fault, right?

Then, if EVERYONE is doing these things, EVERYONE says they are the right things to do, then they MUST be good things, right?
So if a company is having a bad experience … again, it’s easy for management to conclude that it must be THEIR fault, right?

And if the consultants can point to other clients getting good results, this reinforces that it must be the company’s own fault they are not getting good results. Because the consultant has demonstrably happy clients. And the technology itself is beyond challenge, of course.

Adding to the whole “Rock and Hard Place” … management have gone out on a limb. They researched this. They championed it. They hired the consultants or chose the educators or helped select the ERP system, and they spent a LOT of their time and their employees time — and a lot of money and a lot of energy — getting buy-in, getting commitment, conducting education and training.

So for them to admit it’s not working … “Steve, our people are going to think we’re idiots. And we still don’t know why it didn’t work here! It still seems to me we did everything right … but the results everyone promised, and we expected, just didn’t happen.”

Well, here’s the bad news and the good news.

The bad news is, if you’ve been wrestling with this and you’re on your 2nd, 3rd, even 4th go-around trying to make it work — your people probably already think you (management) are … well, if not idiots, then at least not very bright.

Sorry, but that boat has sailed. Probably a long time ago. You should hear what employees tell me, unprompted, when I interview them out of earshot of management.

Now, the good news.


Having an unsatisfactory or partially implemented ERP system does not block massive performance improvement. It might make it more difficult but it doesn’t block it. And in fact, it’s often the reverse — when you put those things in place that create fast, direct and massive performance improvement, suddenly the real value of an ERP system can become apparent and it can be “pulled in” — rather than, “pushed onto.”

Having tried to get value from a Lean implementation and failed … well, 90% of the education will stand you in good stead for the improvements that will in reality generate the massive results you were hoping for. 10% will have to be … well, sidestepped. Adapted. But there are ways of doing this that doesn’t leave anyone embarrassed. Or feeling that they did something wrong. Or blaming anyone.

And when Six Sigma is a disappointment it’s ALWAYS simply because it’s being badly deployed. What we do is help you recognize Focus and Leverage. When you deploy Six Sigma the right way in the right place with the right goals, it’s extraordinarily powerful. Your investment in Green Belts, Black Belts etc. can be capitalized on beautifully.