Turning LEAN into GREEN Presenter: Mike Leigh LMI Partner Roanoke, VA USA

Agenda Background/History of LEAN Brief Description of LEAN How LMI programs can help

History of Toyota and Lean Sakichi Toyoda began loom business in 1894. Toyoda Automatic Loom Works (1926) Toyota Motor Company (1930) Started by Kiichiro Toyoda Influenced by Ford and U.S. supermarkets Developed concepts of JIT and Kanban

History of Toyota and Lean Taiichi Ohno – began Toyota Production System (TPS) Post WWII, needed to compete with Ford and U.S. Needed to turn cash quickly. Japan demand too low to support mass production. Core principle: One-piece flow

TPS Philosophy “All we are doing is looking at a timeline, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that time line by removing non-value-added wastes.” Taiichi Ohno Toyota Production System Beyond Large-Scale Production, Ohno, 1988 * Most business process are >90% waste and <10% value added

Defining Value Before After Lead Time Work . . . Value Add Time Wait / Waste . . . Non Value Add Time Work . . . Value Add Time Lead Time

Continuous Improvement cycle time Perfect output is delivered immediately is defect free is delivered one request at a time is produced without waste Kaizen is the road to perfection… continuous improvement Kai= change; Zen = for the better not a silver bullet or an one time fix…. requires commitment for big dividends months days hours minutes seconds

7 Types of Waste Over-Processing (excess work) Transportation Motion Defects Inventory Over-Production Waiting Inventory

Four Areas Applicable to LMI 1. Leadership and Culture Organizational Development Servant Leadership / Respect for Employees Leadership Behaviors

Leadership and Culture “Implementing lean thinking requires major change management throughout an entire organization, which can be traumatic and difficult. Strong commitment and inspiring leadership from senior leaders is essential to the success of an effort this challenging. The CEO must be a vocal, visible champion of lean management, create an environment where it is permissible to fail, set stretch goals, and encourage “leaps of faith.” A senior management team that is aligned in its vision and understanding of lean is a critical foundation for “going lean.” - Going Lean in Healthcare, Institute for Healthcare Improvement, 2005

Leadership and Culture Principle 9. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others. Principle 10. Develop exceptional people and teams who follow your company’s philosophy. - The Toyota Way, Liker

Leadership and Culture Strategy Deployment (Hoshin Kanri) Create goal alignment at all levels of organization Two-way feedback True North objectives Performance Measures Visual, Easy to understand at a glance Timely (Rapid feedback) Selective (few key areas important to customer) Goals Feedback Ideas

Organizational Development Value Streams vs. Functional Silos Cross-department coordination Information Flow (Communications) Realignment of Responsibilities Sales | Eng | Ops Products Sales | Eng | Ops Sales | Eng | Ops Sales Engineering Ops

Servant Leadership LEAN requires an engaged workforce Managers need to empower employees Process vs People (no “blame game”) Employee ownership Ideas Creation Operators Dept Managers Facilitators Engineers Upper Mgmt Supported Top Down Driven Bottom Up

Leadership Behaviors Employee Respect and Appreciation Kaizen and Suggestion Management Go to the Gemba Standard Work at all leadership levels Enforcement of Standards / Auditing Collaboration between departments

Additional Information All I Need to Know About Manufacturing I Learned in Joe’s Garage – Miller, Shenk The Toyota Way – Liker Lean Hospitals - Graban www.lean.org