Transforming Lean Disappointments into Lean/TOC Successes

What’s Possible?
Regardless of the results you’ve seen (or not seen) so far from Lean, if you have invested time, energy and  money in Lean training we can help you convert that quickly into large-scale results. Results that give you a decisive competitive edge and make a BIG difference to Profits and ROI.

The results you’ve recorded so far are not relevant. If they are poor, you’re no different from the types of company that have gained enormously from TOC over the past 30 years. There have been virtually no failures (don’t take my word for it, Google for them. You won’t find them.)

If they are good – well, there are PUBLISHED case histories of TOC improving the performance of companies that have won awards from Japanese organizations for being superlative examples of Lean.

And please be aware: I have professional alliances with experts (educators, consultants, practitioners) in Lean, Six Sigma and ERP.  We can bring them in as needed.

I know it’s blasphemy to say so but 20+ years of documented research will confirm that Lean results are often disappointing.

Lean has taken on religion-like overtones with some managers. They and the Lean experts who have presided over their failures yet retained their client’s complete confidence will disagree strongly with what I’m about to say.

But I can back EVERY claim up, with logic, data, and common sense.

Inconvenient Truth #1: “Big Picture” Lean – the whole shebang, as described in the books and taught in the courses – simply doesn’t fit a lot of companies. It was never intended to; so it’d be a miracle if it did. (That fact surprises a lot of people.) Where it DOES fit it can be extremely powerful, of course.

Inconvenient Truth #2: When it DOES fit, it STILL might be insufficient to have a significant bottom-line impact. In some circumstances, it will. In others, it won’t. It doesn’t take long to explain this one – and the resulting “Aha!” is often accompanied by a slap of a hand to a forehead.

Inconvenient Truth #3
: When it DOES fit, it STILL might NOT be the BEST solution for the company.  Not stand-alone. This might not be a big deal, of course, provided the improvements are there and significant. But it means major results are usually being left on the table.

However … Lean in combination with other technologies can be a “killer app.” It’s the “stand-alone” aspect I’m focusing on here. Most managers seem to think Lean is always “either/or.” They even define themselves “we’re a Lean company.” But Lean should NOT be “either/or.”  Combine Lean with Theory of Constraints, for example, and the results will make you drool.

Inconvenient Truth #4: When “Big Picture” Lean doesn’t fit, some “Lean Fragments” WILL fit. And they are irresistible to managers determined to show progress, to get an early “win.”  Things like “5S.” and “Value Stream mapping.” “Set-up reduction.” Less often but … maybe a partial re-organization of work flow, even into cells. Even less often … sometimes kanbans in a few places.

THIS IS A BIG DEAL! At a guess, I’d say as many as 90% of companies that claim to be “doing Lean” in my local area are actually just implementing a few Lean Fragments. It’s not politically correct to say this but implementing a few Lean Fragments is NOT implementing Lean. I am shown empty shadowboards. I’ve tagged along on “Gemba walks” that are embarrassing. And the other people following behind the leader, like ducklings obediently following the mother duck, were equally embarrassed. But daren’t say so. I’ve seen cells created that have divided a company’s capacity in ways that cause multiple pain points. Cells can of course be terrific. But their set-up needs a deeper understanding of flow and capacity than we commonly encounter.

Inconvenient Truth #5:  Most “Lean fragments” have little or no bottom line impact whatsoever. They look good, and feel good, and people feel proud of them, and they provide the “quick wins” that management consider important but … they’re purely Local improvement.

Companies tell us with pride of their “Local” Lean Fragment accomplishments. They have measurements to judge how well they’re doing. Charts on the wall.

But those measurements do NOT connect to the bottom line. All they measure is, how well are they implementing the Lean Fragments? Like, how many shadow-boards they have. Or how many “kaizen events” they hosted. How much time they’ve trimmed from change-overs.

Here are the 3 questions that SHOULD be asked when you want to know, what did we (or they) get out of it?

  1. Did you sell more as a result of whatever actions you took in the name of Lean, and the “Local” outcomes you recorded?
  2. Did your inventories shrink as a result of whatever actions you took in the name of Lean?
  3. Did your operating expenses come down — not “product costs,” those are calculations that can be made to look like whatever you want – but did your ACTUAL operating costs come down? Do you have fewer people (often the opposite of “improving,” by the way, but I’m just making a point)? Substantially less scrap? Substantially lower obsolescence? Substantially less overtime?

If the answer is NO … or, “not very much” … then don’t fool yourself. Local improvements most often DO NOT equate to Global (whole-business) improvements. And trimming people often takes a company in the opposite direction to sales and profit growth. 

That’s why the late Eli Goldratt wrote “The Goal” 36 years ago! That was EXACTLY his message! And here we are 36 years later and “local improvements” are once again “the norm,” except that this time they come under the heading of “Lean” so they must be OK, right?


(By the way, look back at Question #3. We’re NOT advocating for workforce reduction; quite the opposite. If you implement what you COULD be implementing, sales will boom and your business will grow and the time will come when you’ll need to HIRE more people. But we use the question as written to hold up a mirror to management’s face to be 100% clear when we ask … did REAL operating expenses come down?)

Look, like I said at the beginning, there are some environments — in fact, MANY environments — that full Lean simply does not fit.

Lean was never intended to fit everywhere. Lean was based on Toyota’s system, and while you can get into some heated debates around this, what Toyota did  was to adapt Henry Ford’s ideas to THEIR specific environment. Sure, they both made cars, but the differences in the environments were critical. And understanding those differences is equally critical.

It was the genius of Taiichi Ohno that he was able to adapt the principles, to make it work in Toyota’s specific environment. But I don’t think he ever claimed that what would work in Toyota would work everywhere. He was looking for a specific set of solutions to a specific set of problems inside Toyota.

If you understand the EXPLICIT assumptions underneath Lean it becomes immediately obvious why it works so well in Toyota, and why it will not, and cannot work well — in “Big Picture” form — in some other organizations.

There are high-profile Japanese companies, in Japan, that have sweated blood to try to make Lean work, using the top Japanese Lean experts; and in some cases Toyota itself has been generous with it’s support. But after multiple attempts “Big Picture” Lean STILL didn’t fit, and it STILL didn’t work.

Now, no question, sometimes what the Lean books describe, CAN be duplicated almost in its entirety, elsewhere. At least, enough of it to totally transform an organization. The case studies are inspiring.

And SOME of what the books and courses describe will ALWAYS be able to be used elsewhere. In Fragments.

But some of it won’t. And trying to force-fit it, is a recipe for frustration and for failure.

The only people who argue that “Big Picture” Lean fits everywhere are those people who really don’t understand Lean. They might be experts, they might be Sensei’s, they might have 10 or 50 success stories under their belt but they do NOT REALLY understand Lean. They don’t understand the assumptions that underlie Lean’s effectiveness. Sorry, but there’s no other conclusion.

In environments where the “fit” is poor, the blame for disappointing results will be aimed at all sorts of things – managers weren’t fully committed, perhaps. Or, you didn’t “turn off” the MRP system like the book (or the experts) say. Or, you didn’t work with the vendors to prevent the shortages problem. Or, there was resistance from the people. Or …or, or … there is no limit to the number of directions to which blame can be assigned.

But the ONLY thing that cannot, MUST NOT be challenged is … the conviction that “Big Picture” Lean will fit every environment. You’re not allowed to go there. This is the sacred cow that you must tip-toe around.

Unfortunately, the conviction, the belief, is not valid. And this isn’t a matter of opinion. It’s a matter of understanding. It can be explained.

Again, I have to stress: No question, pretty much ANY environment can benefit from Lean.

And in those environments, there’s a wide range of possibilities.

At one extreme, some companies can put Lean to work and the “fit” is so good that the results flow quickly and they hit the bottom line and they are impressive and inspirational. But I have to tell you, in our personal experience they are far and few between. (An aside: if you know of one in BC, with substantial bottom-line improvement as a consequence of an implementation, please let us know. )

And even in these successes, 30 minutes is sometimes enough to highlight just how much these companies are leaving on the table, missing the full potential of their business opportunity.  (Hint: It’s a LOT.)

Are they better than they were before? Almost always.

Are they better than their competitors still are? Possibly. (Depends on competitor realities, of course).

Are they as good as they could be? No.  But it might not matter. (I accept this is Sacrilege, of course.)

Are they moving in the right direction? Maybe. But not necessarily, not just because they are “doing Lean.”

Is what they’ve achieved, “good enough?” Maybe! For now. (Sacrilege yet again.)

At the other extreme, a company implements FRAGMENTS of Lean. The “improvements” may be real, and tangible … but most often, purely “local” in their scale of impact.

At this point, a company may be setting itself up for major problems.

Managers backed Lean. At least one championed it, probably several. Most will have been educated in it and all will have had to give lip-service to it even if they didn’t fully back it.

And, their people have been educated, and become believers. And been trained. And the message is, “Lean is good, if we do Lean the results will be great”. And because it seems to make so much sense – it really does, doesn’t it? How can you argue against eliminating waste, for heaven’s sake? — and Lean “talk” is everywhere, and everyone says Lean is good, Lean is great … they TRUST.

And they LEARN. And they DO.

The new knowledge is empowering! They feel valued! And they take pride in the early “wins.”

But they’re not stupid. Slowly they see that the big win isn’t coming. That something, somewhere, is missing. They are puzzled. And they get frustrated.

And for the veterans of previous improvement initiatives, they get more cynical and more jaded. This one hurt more than most because it truly seemed to make sense, and EVERYONE says it’s the right thing to do. A let-down following an emotional buy-in is a real problem.

So, months later and sometimes tens or even hundreds of thousands of dollars later, everyone’s done what seemed to have been the right thing but the results aren’t there and no-one can explain it, and management are frustrated, and the people are frustrated, but worse than all of these — management is scared.

Scared their investment isn’t going to pay off, of course. But even more scared because they can’t explain the lousy results, they can’t offer any way out of the disappointment, they think they’re going to look like fools in front of the people and they think they’re going to lose the trust of the people, the people who followed their leadership.

BUT — it doesn’t have to be this way.

A little deeper understanding of the factors at play will make it very clear to you EXACTLY …

  • Why you’re getting the results you’re getting
  • Why you’re not getting the results you want; and
  • How to get the results you want

In many environments – small to mid-size manufacturers for sure, but even some larger companies– the good news is, you can move from where you are, to terrific results, in fewer than 90 days. Quite possibly you’ll see serious results in under 30 days. Sometimes in a couple of weeks.

And, this can be done in ways that maintains management credibility, and gets support from even the most jaded and cynical, project-shy employees.

These ways do NOT make management look like they were wrong. They do not pose a threat of making management look like fools. And, they get a strong buy-in from employees in every function, at every level.

This way takes advantage of the investment you’ve made, it takes advantage of the training people have received and of the work they’ve already done and the accomplishments they’ve already recorded.

Does this resonate with you?

The Lean dilemma is a horrible one for you, if you’re a leader or manager in a plant where Lean results are disappointing. And it’s NOT your fault, which adds to the frustration.

You are absolutely caught between a rock and a hard place, and it’s not of your making.

You probably did EVERYTHING right. The books, the courses, the experts, all agree. You have prestigious national associations, and sometimes even local government and the Federal Government urging you to go Lean, and offering incentives.  You’ve seen others get results, or at least claim to have … which makes your results seem even more like an internal failure.

But when you do what you’re supposed to … and it doesn’t work … what the heck are you supposed to do then? Where can you turn?

On the one hand, the Lean initiative hasn’t generated what it needed to, for it to be a success for you.

On the other hand, you can’t back down, can’t walk away, can’t just write it off. Nor do you want to — because you KNOW there’s “good” in what you’ve done. Not just because everyone says so, not just because it makes intellectual sense, but because so many aspects of Lean feel right at a “gut” level, too.

The Theory of Constraints offers you a beautiful, no-compromise way out that capitalizes on the Lean work you’ve done, generates results, gets a payback for the time and money invested so far and makes everyone – with justification – look good.

Fast, sustainable results that captures the enthusiasm of even the most cynical employees and supports sales growth while keeping costs contained.

Does this interest you?

If this interests you, and you’d like to explore it more to validate that it genuinely applies to your business, your products, your circumstances …

Call Steve Jackson or Rod Gelhorn at: 604 – 668 – 3253.