1. 1 Using the Lean “Tools” is the Easy Part! Welcome to “Sustaining Lean”

2. How are We doing with Our Lean Implementations? Little or No Progress Significant Progress Achieved World Class Status 2% 24% 74% Reference: Industry Week Magazine, 2007 2

3. How are We doing with Our Lean Implementations? Manufacturing & Technology News September 30, 2011 edition reported:  70% of reporting organizations reported a < 5% improvement in manufacturing costs as a result of Lean  60% of respondents said their previous Lean improvements were not sustainable  Only 17% of respondents reported seeking long-term culture change in their organization 3

4. How are We doing with Our Lean Implementations? (cont’d) Article conclusions:  Most companies are getting a poor return on their investment in Lean and Six Sigma  Companies are far too focused on implementing Lean tools and processes rather than on basic execution 4

5. Issues to Sustaining Lean While often there is a spurt in activities and improvements early in the Lean implementation, this slows down and stalls when the organization begins to realize that: Lean is not a "magic pill" or "silver bullet" for the organization's problems A Lean implementation requires difficult and company-wide change, especially for top management. 5

6. Issues to Sustaining Lean Not everyone thinks Lean applies to them (i.e., sales, engineering, IT, accounting, human resources, and other key areas). Quick bottom line results do not appear, giving rise to questions about a payback from the investment in Lean. Top management support for the change necessary to implement Lean is limited or missing. 6

7. © 1998 - 2011 WCM Associates7 Four Components of Lean

8. © 1998 - 2011 WCM Associates8 Four Components of Lean

11. Policy Deployment – Mission and Behavioral Expectations Developing the Boundaries for a Lean Culture! Remember, the Lean journey is 80% about people. 11© 2007-2012 WCM Associates

12. Behavioral Expectation Examples 12

13. Your HR Policies – What Kind of Company Leaders & Associates do You Say You Want? Performance What? AcceptableUnacceptable 13© 2007-2011 WCM Associates

14. Your HR Policies – What Kind of Company Leaders & Associates do You Say You Want? (cont’d) Performance Culture What? How?

15. Developing the Boundaries for a Positive Culture with Behavioral Expectations Stop here if the organization’s Leadership Team is unwilling to model these expectations! 15© 2007-2011 WCM Associates

16. Four Components of Lean

17. What is Organizational Culture? Culture is: A set of rules and standards shared by members of an organization which produces behavior that falls within a range the organization considers proper and acceptable. A learned process Developed by the organization as a response to the working environment established by the organization’s Leadership Team

18. What is Organizational Culture? A culture is established in all organizations regardless of whether its development is guided or unguided. Culture can have a positive or negative impact on the organization’s performance.

19. How do You Establish a Lean Culture? A Lean culture is established in two parts: Part 1 – Developing a cultural framework or structure (this can be done quickly) Part 2 – Establishing a “people and team based” environment and filling in the framework (this generally takes years)

20. 20 Developing a Cultural Framework Part 1 – The Lean cultural framework is developed and sets the boundaries for a positive culture by: 1) Establishing “Behavioral Expectations” for the entire organization 2) Linking HR policies and procedures to the Behavioral Expectations and the Lean vision and implementation 3) Establishing organizational leadership and management principles

21. 21 Part 1 Step 2 - HR Policies – Aligning People Measures with the Culture & Lean Implementation Vision Job Descriptions Performance Evaluations Promotions Reward Systems Bonus Systems Recruiting New Associate Orientation

22. Part 1 Step 3 – Developing the Framework for a Positive Culture – Leadership Principles

23. How Do We Begin Implementing Culture Change in Our Company? All Successful and Sustainable Business Change Starts with Top Management

24. 24 Top Management Must Remember: – When problems in an organization occur (i.e. safety, scrap, poor quality, low productivity, etc.), 98% of them are a result of the organization’s systems – not people. Top management must always take responsibility for these problems since management is responsible for the organization’s systems.

25. © 1998 - 2012 WCM Associates25 “You will achieve the level of 5S that you demonstrate you want to achieve.”

26. © 1998 - 2012 WCM Associates26 Developing the People & Team Based Part of the Culture Using the established leadership and management principles, this people & team based environment is developed through: Communication Empowerment Teamwork

27. © 1998 - 2012 WCM Associates27

28. © 1998 - 2012 WCM Associates28

29. © 1998 - 2012 WCM Associates29 Communication Supports Teamwork Development 1) High levels of 2-way communication 2) Team members with diverse backgrounds 3) Common purpose/motivated by mission 4) Common goals/measurements

30. 30 Communication Goals (via both verbal & visual communication) 1) Eliminate company rumors & gossip 2) Establish the mission/vision 3) Support the development of culture and empowerment 4) Establish organization’s goals and the group/individual responsibilities in achieving 5) Display company operational and goal status

31. © 1998 - 2012 WCM Associates31 © 1998 - 2012 WCM Associates Empowering Environment  Associates are recognized as the most valuable resource  Teamwork  Decision making is delegated  Openness, initiative, and risk taking are promoted  Accountability, credit, responsibility and ownership are shared

32. © 1998 - 2012 WCM Associates32 © 1998 - 2012 WCM Associates Empowerment Barriers  Lack of trust  Poor communication - can lead to lack of clear expectations, lack of trust, fear  Fear - people fear the unknown and therefore resist change  Lack of training - inadequate training leads to confusion, frustration, and anger  Lack of measurements - align systems to vision

33. © 1998 - 2012 WCM Associates33 Requirements for Teamwork to Occur in Any Organization 1) High levels of 2-way communication 2) Team members with diverse backgrounds 3) Common purpose/motivated by mission 4) Common goals/measurements

34. © 1998 - 2012 WCM Associates34 Biggest Barriers to Teamwork in Organizations 1) The visible and invisible walls created by departmentalization (silos) 2) Lack of “systems thinking”

35. 35 Thank You! Questions

36. © 1998 - 2012 WCM Associates36 Lean Cultural Elements Checklist Part 1 – Can be done quickly  Establish “Behavioral Expectations” for the entire organization  Link HR policies and procedures to the Lean vision and implementation  Establish organizational leadership and management principles  Start Communicating

37. © 1998 - 2012 WCM Associates37 Lean Cultural Elements Checklist Part 2 – Can take years  Complete communication system  Empowerment  Teamwork

38. © 1998 - 2012 WCM Associates38 Contact Information: Larry Rubrich WCM Associates LLC www.wcmfg.com 260-637-8064 Email: rubrich@wcmfg.com