Achieving Operational Excellence:
The Lean Transformation Program (LTP) helps companies to get significantly better performance results, while building a continuous improvement culture to sustain success. The program delivers significant gains in quality, delivery, efficiency by simultaneously addressing structure, skills, processes, and operating system. Such Lean transformation is therefore not a ‘quick fix’ intervention; it requires time to redesign processes bottom-up and to build the skills to operate in the Lean way.
Lean Transformation Model
How the Lean Transformation Model works
- Underperformance is the starting point, caused by waste, variability, complexity, and inflexibility.
- The Lean Transformation tackles those avoidable losses by systematically applying flow, takt, pull, and balancing. Four pillars (4T) enable the transformation:
- T1 – Targets align the program with vision, mission, and strategy, while integrating it into the overall roadmap.
- T2 – Team covers organizational structure, skills and capabilities, roles and responsibilities, mindset and behavior of people involved.
- T3 – Toolbox includes workplace organization, performance management, problem solving, strategy deployment, and work standards.
- T4 – Training builds essential skills, while certifying people at white, yellow, green, and black belt level.
- Peak Performance is the ultimate goal with measurable impact in quality, delivery, efficiency, and employee morale.
- Gains include a more efficient organization, serving customers better and faster, at lower cost and waste.
Lean Transformation Process
How the Lean Transformation Process works
The 6D Process leads people systematically from initiation through improvement to the institutionalization of Lean methods.
- D1 – Define: the first step delivers the project charter, specifying problem, approach, and sponsorship.
- D2 – Diagnose: the second step delivers the current state analysis, specifying baseline and improvement potential.
- D3 – Design: the third steps delivers the future state design, including target and implementation plan.
- D4 – Demo: the fourth step confirms assumptions during the pilot run, while optimizing design parameters.
- D5 – Deliver: the fifth step delivers the impact, while establishing ownership and accountability for results.
- D6 – Delegate: the sixth step establishes standards, while training people in the new way of working.
Quality gates ensure deliverables are being met at each step.
Lean Transformation: Program Details
How it works:
To create real impact, the transformation must be well defined and tightly controlled. Our 6D-Method guides people systematically through the process, ensuring that improvements are properly planned and implemented. A quality gate after each step ensures that minimum success criteria are being met before moving to the next step. Active change management drives staff involvement and embedment of the improvements.
How long it takes:
Dependent on program scope, baseline capability, and resource allocation, a Lean Transformation takes at least one year to design and implement improvements, while building the skills and capabilities to sustain them. As a rule of thumb, it takes 1 week per person involved, or 2 years for evolving an organization of 100 people. It therefore requires a long-term perspective.
Who is involved:
Three roles must be assigned: sponsor, manager, and controller. The sponsor steers the program, is responsible for scope and resource allocation. The manager champions the program, is responsible for planning and implementation. The controller validates financials, is responsible for tracking costs and benefits. Individual team members contribute to the program, are responsible for specific tasks and deliverables. The Leanmap consultant acts as program architect, coach, or leader as described in our Engagement Model, filling knowledge and resource gaps to ensure the program delivers to expectations.
What you can expect:
Ultimate outcome is an efficient operation that steadily raises the bottom line, while creating a competitive advantage from speed and flexibility. Narrowing the gap between current and ideal state by 30% to 50% is a typical result, reducing defect levels, lead-times, and working capital by double-digit percentages each year, until the plateau is reached.
How much it costs:
Obviously, there is an investment required to realize the improvement. As rule of thumb, a medium-size operation with $100M throughput or $50M addressable cost base, requires 1 dedicated expert resource – either freed-up internally, sourced externally, or a mix of both – to identify and implement $1M improvements per year. Leverage typically increases with company size and program scope.
Lean in a Nutshell
Lean focuses on delivering maximum value to the customer at minimal cost and effort for the provider. Value is any product, feature, or even emotion that triggers a buy-decision. Waste refers to any activity or feature deemed unnecessary, anything the customer has not asked for or will miss when not received. Flow is achieved when barriers are removed and processes connected, managed as value-streams. Takt is the pace of production in sync with the rate of customer demand. Balance is achieved when resource allocation matches workload. Costs naturally increase over time when losses are not addressed. Losses are caused, among others, by waste-strain-unevenness or muda-muri-mura. Benefits are created when quality, delivery, and productivity improve. Quality improves as variability, drift, and instabilities are reduced to ensure defect-free output. Productivity improves as waste is reduced, allowing for higher utilization of labor, intellect, space, and equipment. Inventory is lowered as value is pulled through the value stream, requiring less working capital in the system. Leanness can be assessed within 2-3 hours, using the Lean Office Audit and Lean Factory Audit.
The 5 Lean Principles
Creating continuous flow along the value chain, so that items are handed directly from process-to-process or person-to-person without delay or inventory in between.
Establishing rhythm in sync with customer demand, so that the actual pace of work matches the rate the customer orders or consumes the items completed.
Allocating resources strictly based on consumption, so that nothing gets made, touched, or moved before the downstream process actually signals a requirement.
Leveling load and smoothening the schedule, so that capacity matches demand, avoiding idle times and resource shortages, making too many or not enough.
Building quality into products and processes, not to pass on defective work, not to do defective work, and not to accept defective work by stopping and reacting immediately.
Lean Process Checklist
For any process in manufacturing and service to be called Lean, it must meet the following five checkpoints:
Lean Transformation Case
Results from transforming a electronic assembly plant in Mexico. The maquiladora with 2,000 employees achieved within just 12 months:
- 94% less process inventory
- 44% higher productivity
- 66% better first-pass quality
- 25% higher operating margin
The Lean transformation was well supported by employees and executives, resulting in 1100% (11-fold) productivity gain and 90% reduction in defects over a 7-year transformation period. The two Lean transformation cycles matured the operation from Iron » Bronze » Silver.
Lean Transformation Modules
- Flow layout (factory, office)
- Mixed-model design (line, cell)
- Process standardization (SOP, OPL)
- Service standardization (SLA)
- Capacity resource planning (CRP)
- Supply chain rationalization (SCR)
- Make-buy optimization (MBO)
- Supplier audit and qualification
- Cost optimization (ZBB, TCO)
- Yield improvement (FPY, RTY)
- Efficiency boost (OEE, OPE)
- Equipment reliability (TPM)
Lean-Transformed 50+ Operations in 30+ Countries
Lean Transformation Program (LTP) for Norway’s leading environmental services provider to boost operational efficiency by applying Lean management principles to the seven largest processing plants.
Lean Transformation Program (LTP) for Franke, an industrial manufacturer, to bring 13 factories onto a continuous improvement track, gaining 6% productivity annually to achieve margin-targets.
Lean Transformation Program (LTP) for the leading truck manufacturer to resolve constraints in assembly and logistics, meeting critical deliveries of military vehicles to the front-line.
Lean Transformation Program (LTP) to boost manufacturing output of the leading marine-electronics company by de-bottlenecking its main factory in Mexico and rationalizing the manufacturing footprint.