LEAN
ENTERPRISE
SELF
ASSESSMENT
TOOL
Version 1.0
AUGUST 2001
FACILITATOR’S GUIDE
LEAN ENTERPRISE
SELF-ASSESSMENT TOOL
(LESAT) Version 1.0
Facilitator’s Guide
August 2001
Table of Contents
Foreword .........................................................................................................2
Acknowledgements ...........................................................................................5
Part I - Introduction...........................................................................................7
Part II – Lean Enterprise Architecture..................................................................11
Part III - Development of Lean Maturity Matrices .................................................14
Part IV – Assessment Methodology ....................................................................22
Part V - LESAT Maturity Matrices .......................................................................32
Appendix A – The “What and Why” of Lean .....................................................86
Appendix B – LESAT Glossary ...........................................................................104
Appendix C – TTL Tutorial .................................................................................108
Appendix D – Comparison of LESAT to Other Assessment Approaches ................125
Appendix E – LESAT Assessment Aids ................................................................136
© Copyright Massachusetts Institute of Technology, 2001
Foreword
The Lean Aerospace Initiative (LAI) is a collaborative
published as a three volume set. This guide (called
effort among major elements of the United States Air
the TTL Guide) describes a logical sequence of
Force and related government organizations, leading
actions required for transitioning an enterprise to a
companies within the aerospace industry, and the
Lean state. Both the TTL Guide and the LEM may
Massachusetts Institute of Technology. LAI was formed
be
to identify and implement Lean principles and prac-
http://lean.mit.edu or by contacting the MIT LAI
tices throughout the aerospace industry.
office.
An early LAI product, the Lean Enterprise Model
The tool described in this document is called the Lean
(LEM) provided a convenient framework for integrat-
Enterprise Self-Assessment Tool (LESAT). It is
ing lean principles and practices. In providing a tax-
closely aligned with the structure and content of the
onomy of lean principles and practices, the LEM
TTL Guide. Therefore, the TTL Guide is highly rec-
addresses the issue of the “whats” of lean, but does
ommended as read-ahead material for the enterprise
not address the “hows” of implementation. Another
performing a Lean self-assessment.
accessed
from
the
LAI
web
site,
LAI product was developed to address the broad
issues of implementation. Called “Transitioning to
The relationships between the LEM, the TTL Guide
a Lean Enterprise: A Guide for Leaders”, it is
and LESAT are illustrated in Figure 1.
Figure 1. LAI Enterprise Tool Triad
IMPLEMENTATION
LEM
Principles and
Practices
TTL
Guide and
Roadmap
BEST PRACTICES
LESAT
Self
Assessment
ASSESSMENT
Page 2 of 166
© Copyright Massachusetts Institute of Technology, 2001
Western manufacturers were slow to comprehend the
ful transition and may begin asking “How much progress
significant paradigm shift initiated by Toyota’s new
have we made?” “How much farther is it to lean?” “How
model of production operations.
do we compare to others in getting lean?”
The awareness
occurred in “bits and pieces” as some of the practices
became known. As more and more of the lean prac-
These types of questions led LAI to realize that consor-
tices were uncovered, the principles underlying those
tium members needed a means of assessing their
practices began to be perceived. Many of the principles
progress relative to the TTL Roadmap and of determin-
and practices of lean are captured and organized with-
ing the extent to which lean principles, practices and
in LAI’s Lean Enterprise Model (LEM).
behavior have become “the way we do business” across
the enterprise.
Acquiring an understanding of the fundamental principles of lean was a necessary prerequisite for being able
The Lean Enterprise Self-Assessment Tool (LESAT) was
to conceive and develop a process for converting an
developed and field-tested over an 18-month period,
enterprise organized and managed under the mass pro-
resulting in the release of LESAT Version 1.0 in August
duction mind set to one based on lean principles and
2001. As the name implies, LESAT was designed for
practices. The LAI consortium developed the “Transition-
use in self-assessment by enterprise leaders. LESAT is
to-Lean (TTL) Model and Roadmap” that provides an
not intended to provide any basis for comparison
organizing framework for achieving a lean transforma-
between different organizations. Each organization is
tion.
unique and will have distinct goals and objectives.
These varying objectives will translate into different lev-
As consortium members gained experience with TTL,
els of desired lean maturity for each enterprise. LESAT
they began to acquire an understanding of what it
is also not intended to be used for comparative evalua-
means to be a lean organization. They perceived that a
tion or source selection.
lean organization not only must change its practices, it
must also change its behavior. It is much more difficult
It is important to note that LESAT facilitates self-assess-
to change behavior than to change practices.
ment of an organization at the enterprise level and is
intended to highlight the key integrative practices at the
The lean transformation is a lengthy journey for any com-
uppermost levels of an enterprise. Other assessment
pany. After launching upon the journey there are typi-
tools have been developed that focus on specific process
cally some quick successes as well as some setbacks, and
or functional areas, such as production operations,
frequently some initiatives take longer than expected.
product development, and supply chain management.
Enterprise executives are naturally anxious for a success-
© Copyright Massachusetts Institute of Technology, 2001
Page 3 of 166
The LESAT material is contained in two volumes:
LESAT Guide
(this volume) has been written for Lean Change Agents and others who are deeply involved in facilitating
lean transformations within their organizations. It describes the rationale underlying the development of
LESAT, a suggested outline of steps for conducting an assessment, and several assessment aids for analyzing and presenting the assessment data. The LESAT Maturity Matrices are also included for completeness.
LESAT Maturity Matrices
contains only the maturity matrices and minimal auxiliary discussion. It is designed as a “workbook” for
the assessment participants, to be marked up while performing the assessments. LESAT Facilitators within
each organization are expected to provide guidance and assistance to those participating in the assessment.
Both volumes of LESAT may be accessed from the LAI web site, http://lean.mit.edu or
by contacting the MIT LAI office.
Page 4 of 166
© Copyright Massachusetts Institute of Technology, 2001
Acknowledgements
This Lean Aerospace Initiative (LAI) product utilizes
and all members of both the U.K. and U.S. LAI are
elements of the Enterprise Transition To Lean (TTL)
hereby acknowledged and thanked.
Roadmap and the Lean Enterprise Self-Assessment
Tool (LESAT Version 1.0) to provide a structure and
The U.S. Lean Aerospace Initiative is a consortium
implementation reference for the self-assessment
consisting of 25 industry, 13 government, and 2 labor
process.
union members joined with the Massachusetts Institute
of Technology. The consortium is a 50%-50% cost
This LESAT Guide has been developed at the
share partnership with industry, MIT and government.
Massachusetts Institute of Technology (MIT) to assist
The Air Force Aeronautical Systems Center with the
members of the U. S. Lean Aerospace Initiative in the
Air Force Research Laboratory’s Manufacturing
use of the Lean Enterprise Self-Assessment Tool
Technology program provides government leader-
(LESAT) and addresses the specific needs of the U. S.
ship.
Lean Aerospace Initiative members. Members of the
U.S. LAI LESAT Guide Development Team included:
The U.K. Lean Aerospace Initiative is a consortium
Professor Deborah Nightingale (MIT Co-Lead), Mr.
consisting of the University of Bath, Cranfield
Chris Cool, Northrop Grumman (Industry Co-Lead),
University, the University of Nottingham, the
Mr. Kelly Brown, Aeronautical Systems Center,WPAFB
University of Warwick and some 40 participating
(Government Co-Lead), Dr. Joe Mize, MIT, Mr.
company members of the Society of British Aerospace
Thomas Shields, MIT, and Mr. Cory Hallam, MIT. All
Companies (SBAC). The initiative has 50%-50% joint
facts, statements, opinions, and conclusions expressed
funding by participating SBAC members and IMI
herein are solely those of the core team members in
Aerospace (Link) Sector, Engineering and Physical
their capacity as principal co-authors of the Guide.
Sciences Research Council.
The Massachusetts Institute of Technology (MIT) and
The core team consisting (alphabetically) of Mr. Trevor
the Warwick Manufacturing Group of the University
Broughton, Mr. Kelly Brown, Mr. Chris Cool, Dr.
of Warwick under the auspices of the U.K. and U.S.
Valerie Crute, Mr. Mike James-Moore, Dr. Joe Mize,
Lean Aerospace Initiatives have developed the current
Prof. Deborah Nightingale, Mr. Tom Shields, and Dr.
version of the Lean Enterprise Self-Assessment Tool
Martin Womersley developed the current and Beta
(LESAT). The tool development was a result of active
versions of the LESAT. We would also like to acknowl-
participation by many members of the U.K. and U.S.
edge the valuable inputs received from the rest of the
Lean Aerospace Initiatives. The contributions of mem-
U. S. LAI research team and staff and the U. K. LAI
ber organizations were critical to this development
research team and staff in the preparation of the cur-
© Copyright Massachusetts Institute of Technology, 2001
Page 5 of 166
Acknowledgements
Continued
rent version of LESAT and previous assessment ver-
Propellers, FR HiTemp, GenCorp Aerojet, Hurel
sions. All facts, statements, opinions, and conclusions
Dubois (UK), Lockheed Martin Aeronautics, Lockheed
expressed herein are solely those of the core team
Martin Space Systems, Matra BAe Dynamics,
members in their capacity as principal co-authors of
Northrop Grumman, Pratt & Whitney, Raytheon,
the tool.
Rockwell Collins, Rolls Royce, Sikorsky Helicopters,
Smiths Industries Aerospace, Textron Systems, TRW
The contributions and/or feedback from real-life test-
Aeronautical Systems and the United States Air Force
ing by the following companies alphabetically: AIR-
(USAF) in the development of LESAT are gratefully
BUS (UK), BAE SYSTEMS, Boeing Helicopters, Dowty
acknowledged.
Page 6 of 166
© Copyright Massachusetts Institute of Technology, 2001
Part I - Introduction
Part I provides an introduction to assess-
nies and which result in national awards and/or cer-
ment processes in general, a discussion of
tification or qualification.
how the LESAT format was selected, and a
grams include:
Examples of such pro-
brief description of how the LESAT was
developed and tested.
Malcolm
Baldridge
National
Quality
Award:
Assessment Processes
An overall performance award governed by the
As management practices have evolved over the past
Department of Commerce and the National Institute
century, organizations have learned that to be suc-
of Standards and Technology (NIST). An independ-
cessful they must become adept at continuously
ent, external assessment is conducted by evaluating 7
defining and re-defining their directions and goals.
categories of performance and scoring them against
They must also develop means of determining the
a 1000 point scale.
degree to which their goals are being achieved.
Leadership, Strategic Planning, Customer/Market
Traditional performance measures are employed to
Focus, Information & Analysis, Human Resource
display financial performance, operational efficien-
Focus, Process Management, and Business Results.
The categories include:
cy, etc. These traditional measures are inadequate,
however, in portraying progress toward achieving
ISO 9000:
behavior changes or in showing the effectiveness of
The ISO 9000 quality series represents a set of inter-
comprehensive improvement strategies.
national quality management standards and guidelines. They are based on eight quality management
A variety of assessment tools have emerged which
principles that are considered by the international
facilitate initiatives aimed at implementing continual
quality community to represent best management
improvement strategies. A variety of organizational
practices. A third party assessment is usually per-
survey instruments are available (Kraut 1996) for
formed to provide customers assurance that the
assessing employee morale, determining customer
enterprise establishes and maintains a quality system
satisfaction, and aligning the key stakeholders of an
that meets the requirements of the ISO 9001,
enterprise.
Quality
The Total Quality movement has also
spawned a number of performance based assess-
Management
Systems-Requirements
standard.
ment tools (Wilson and Pearson 1994).
European Quality Award (EFQM):
Assessment processes are imbedded in several pro-
The European Foundation for Quality Management
grams which encourage competition among compa-
grants an award annually based upon criteria related
© Copyright Massachusetts Institute of Technology, 2001
Page 7 of 166
Part I - Introduction
to the EFQM Excellence Model.
Continued
The nine categories assessed include Leadership, Policy & Strategy, People,
Partnerships & Resources, Processes, Customer Results, People Results, Society Results, and Key Performance Areas.
In Appendix D, LESAT is compared to these three models.
An important category of assessment tools has emerged in recent years called “Capability Maturity Matrix” (CMM).
The basic concept underlying the CMM is to first determine the most important factors relative to an organization’s
performance. Then for each factor, a series of “levels” are defined, such that progressively greater levels of capability are reflected as an organization “matures” in its performance on that factor.
Selection of the LESAT Approach
The LESAT Development Team first gathered extensive input from LAI consortium members regarding their needs relative to assessment. The needs were analyzed and consolidated into a set of user requirements:
• Must assess degree of “leanness” for an enterprise and all its core processes
• Must provide feedback for improvement, guidance for “next steps”
• Assessment must be data driven, based on documentable evidence
• Should be consistent with other LAI tools, i.e. LEM and TTL
• Should require minimal time and effort to create
• Should be flexible to allow assessment of varying organizational scope
• Should be understandable and easy to apply
• Should align with Business Planning Process
Several alternative approaches to performance assessment were examined and compared. The various assessment
tools were grouped into three categories for comparison purposes:
• Capability Maturity Matrix
• Baldridge Type (quality of documented processes)
• Outcome based (measured change in performance over time,
e.g. financial scorecard)
Page 8 of 166
© Copyright Massachusetts Institute of Technology, 2001
The several user requirements were assigned weights
relative to an organization’s performance. An organ-
corresponding to their relative importance in deter-
ization progresses through several levels of maturity
mining which of the three approaches is best for
on each performance factor. (For LESAT, five levels of
LESAT.
By a substantial margin, the Capability
maturity are employed. Level 1 indicates least capa-
Maturity Matrix approach was judged to best fit the
ble; level 5 indicates most capable, or world-class
needs of LESAT.
performance.)
Accordingly, for each performance
factor, statements are constructed that characterize an
The basic concept underlying the Capability Maturity
organization’s maturity at each of the five levels of
Matrix is to first determine the most important factors
achievement.
As an example, one of the factors considered very important in an enterprise’s transition to Lean is a “Lean
Enterprise Vision”. The five capability levels for this factor are:
Level 1 - Senior leaders have varying visions of Lean, from none to well defined
Level 2 - Senior leaders adopt common vision of Lean
Level 3 - Lean vision has been communicated and is understood by most employees
Level 4 - Common vision of Lean shared by the extended enterprise
Level 5 - All shareholders have internalized the Lean vision and are an active part
of achieving it
An organization, at any given point in time, can assess itself on this particular performance factor and determine
the means for elevating the organization to the next level of capability.
Development and Testing of LESAT
The LESAT Development Team engaged in a series of
For each lean practice, five maturity levels had to be
meetings, conference calls, and email exchanges to
defined. A three-day session was held at MIT during
develop the initial set of lean practices that were
the summer of 2000, at which knowledgeable indus-
included in the assessment matrices. More than a
try, government and university representatives devel-
dozen members of the LAI consortium companies par-
oped the level descriptions. This LESAT Prototype was
ticipated in this effort.
reviewed by a small number of companies to obtain a
© Copyright Massachusetts Institute of Technology, 2001
Page 9 of 166
Part I - Introduction
Continued
quick read on its usefulness. Another three-day session
The LESAT Beta version was field tested in both the U.S.
was held at MIT in August 2000 to finalize the Alpha ver-
and U.K. during the winter and spring of 2001.
sion, which was then field-tested or reviewed by more
A LESAT Workshop was conducted at MIT on June 13 –
than 10 LAI members.
14 to consider numerous suggestions for refinements
that were offered during the field-testing. The field-test-
Following the Alpha field test, a workshop was conduct-
ing in the U.K. also generated numerous suggestions for
ed at MIT in November 2000 to further refine the assess-
refinement.
ment tool, resulting in the LESAT Beta version.
The U.S. and U.K. LESAT Development Team conducted
Concurrently, LAI researchers discovered that the U.K.
an intensive three-day session (June 19 – 21, 2001) at
LAI was also developing an enterprise level assessment
the University of Warwick, with the objective of deriving
tool. Following discussions and with input from several
a common set of LESAT Maturity Matrices, LESAT Version
U.S. LAI consortium members, it was decided to attempt
1.0, for release in August 2001.
to develop a common set of assessment matrices.
Page 10 of 166
© Copyright Massachusetts Institute of Technology, 2001
Part II – Lean Enterprise Architecture
Many of the early lean initiatives focused on picking
The full benefits of lean can be realized only by re-
the “low hanging fruit” primarily at the factory floor
thinking the entire enterprise: its structure, policies, pro-
level. Viewed as a collection of practices with names
cedures, processes, management practices, reward
such as “Kaizen”, “Kanban”, and “Poka-yoke”, lean
systems, and external relationships with customers and
is frequently implemented in production operations
suppliers.
with little or no integration with other enterprise functions or processes.
Both the Transition-to-Lean Roadmap and LESAT focus
on the key integrative practices at the uppermost level
While some benefits were gained with these efforts,
of an enterprise. A generic lean enterprise architec-
the results were often less than had been hoped for.
ture is used as the organizing framework, as shown in
In-depth analysis reveals that the practices were being
Figure 2.
implemented in a bottom-up fashion within an incom-
basic groups, each consisting of a number of enter-
patible enterprise environment.
prise level processes. All of these processes must be
The architecture is organized into three
transformed in order to achieve a lean enterprise.
Enterprise Leadership Processes:
These processes are developed and maintained by leadership to guide the activities of the enterprise. They cut
across all of the entities that make up the enterprise. Enterprise leadership provides the direction and resources to
break down barriers among and within Life Cycle Processes that result in wasted resources and reduced value to
customers and stakeholders. They also provide the leadership to transform the Enabling Processes to eliminate
waste and improve responsiveness to the rest of the enterprise.
Life Cycle Processes:
These processes define the product life cycle, from initial conception through operational support and ultimate disposal. They directly determine the value provided to customers and stakeholders alike. The degree to which an
enterprise is successful in making these processes Lean is one measure of its effectiveness and efficiency in delivering value to the customer and the other stakeholders.
Enabling Infrastructure Processes:
These support the execution of Enterprise Leadership and Life Cycle processes. The enabling processes provide supporting services to other organizational units whom they serve as internal customers. Since they enable rather than
directly result in enterprise success, they can be easily overlooked as sources of waste within the value stream.
However, waste that is inherent in these processes can negatively impact the enterprise as a whole and the life cycle
processes, and therefore they should be attacked vigorously.
© Copyright Massachusetts Institute of Technology, 2001
Page 11 of 166
Part II – Lean Enterprise Architecture
Continued
In a “Lean Enterprise”, Lean principles and practices
provide the basis for product and process design,
(e.g. pull, flow, waste minimization, etc.) are imple-
involving customers and key suppliers. The produc-
mented in all processes. The Life Cycle processes are
tion process is organized and managed according to
aligned horizontally along the customer value stream.
lean production practices. Suppliers are integral to
They begin with defining customer value and translat-
the extended enterprise. Distribution and post-deliv-
ing this into requirement definitions. These, in turn,
ery support are the final processes in the life cycle.
Figure 2 - Generic Lean Enterprise Process Architecture
Life Cycle Processes
•
•
•
•
•
•
Business Acquisition and Program Management
Requirements Definition
Develop Product and Process
Supply Chain Management
Produce Product
Distribute and Service Product
Enabling Infrastructure Processes
•
•
•
•
•
•
Finance
Information Technology
Human Resources
Quality Assurance
Facilities and Services
Environment, Health and Safety
Enterprise Leadership Process
•
•
•
•
•
•
Page 12 of 166
Strategic Planning
Business Models
Managing Business Growth
Strategic Partnering
Organizational Structure and Integration
Transformation Management
© Copyright Massachusetts Institute of Technology, 2001
Lean principles and practices also must be imple-
skilled workforce that is capable of performing a wide
mented in all enabling infrastructure processes, but
array of tasks, many of which were performed by spe-
only after these processes have been re-defined and
cialists in a mass production situation. Likewise, HR
re-structured consistent with the fundamental nature of
must facilitate continuous just-in-time education and
the Lean paradigm.
For example, the Human
training consistent with the Lean paradigm. Similar
Resources process in a Lean Enterprise not only
modifications must be made to all other HR functions,
applies Lean thinking to its traditional operations, it
such as employee benefits, incentives, etc. Analogous
re-defines those operations to support Lean through-
modifications are required in all the enabling infra-
out the remainder of the enterprise. When HR recruits
structure processes: Finance, Information Technology,
new employees for production, selection criteria must
Facilities & Services, Environment/ Health/Safety.
now recognize that Lean production requires a multi-
In general, there are three aspects involved in transforming the above processes to
“lean:”
First, the mission, procedures, practices, processes, and metrics of each organizational unit must be re-created, consistent with the requirements of a lean business model.
Second, the fundamental principles of lean behavior (waste elimination, balanced flow, etc.) must be
implemented within a framework of on-going continuous improvement.
Third, the enterprise must be integrated across all the important dimensions: organizations, information,
processes, and enabling infrastructures.
© Copyright Massachusetts Institute of Technology, 2001
Page 13 of 166
Part III - Development of Lean Maturity Matrices
The Lean Enterprise Self-Assessment Tool (LESAT) has
As described in Part I, several alternative approach-
been designed to assist an organization assess its
es to performance assessment were examined and
progress in its transformation to a Lean enterprise. It
compared. The approach that best satisfies the user
is expected that the assessment will be performed on
requirements is called a Capability Maturity Matrix.
a regular, periodic schedule. The outcomes of a par-
There are two primary steps in developing a
ticular assessment should provide guidance to the
Capability Maturity Matrix. The first is to determine
organization in refining/adjusting its continuous
the particular factors against which the organization
improvement plans.
will be assessed. Once the factors are specified, the
progressive maturity levels related to each factor must
be carefully constructed
Generic Capability Level Definitions
A significant number of factors are considered important in transitioning to Lean. Five maturity statements were
developed for each factor, ranging from least capable (Level 1) to world class (Level 5). It was considered important to develop generic definitions or characterizations of each capability level. These definitions served as a reference for the teams who developed the specific maturity statements for each of the Lean practices included in the
assessment. These generic definitions are shown in Figure 3.
Figure 3. Generic Level Definitions
Generic Definition
Level 1 Some awareness of this practice; sporadic improvement activities may be
underway in a few areas.
Level 2 General awareness; informal approach deployed in a few areas with
varying degrees of effectiveness and sustainment.
Level 3 A systematic approach/methodology deployed in varying stages across most
areas; facilitated with metrics; good sustainment.
Level 4 On-going refinement and continuous improvement across the enterprise;
improvement gains are sustained.
Level 5 Exceptional, well-defined, innovative approach is fully deployed across the
extended enterprise (across internal and external value streams); recognized
as best practice.
Page 14 of 166
© Copyright Massachusetts Institute of Technology, 2001
These levels are intended to depict a progression in
dynamic and therefore Lean practices will continue to
the capability of the organization relative to the par-
evolve and improve. Level 5 is not the end of the Lean
ticular performance factor being evaluated.
The
journey, because one of the key tenets of Lean is con-
enterprise must have fully satisfied all elements of a
tinuous improvement. The definition of Level 5 (and
particular level before it can progress to the next high-
for all other levels as well) for the various factors (Lean
er level.
practices) will evolve through time as competitive
enterprises develop ever-higher standards for world-
It is important to recognize that an organization may
class performance.
not aspire to attain Level 5 in all the performance factors. It is management’s prerogative and responsibil-
The Lean Maturity Matrix Form
ity to decide the level it wishes to ultimately attain on
A “Lean Maturity Matrix” form has been designed for
each factor. These decisions should collectively reflect
organizing the information contained in the assess-
the strategic objectives of the organization.
ment exercise. A blank copy of this form is presented
in Figure 4. The contents of each portion of the form
In performing the assessment exercise, an organiza-
are described in italics. A sample, completed form is
tion should not be overly concerned with determining
shown in Figure 5. It is instructive to compare the five
a precise measure of its current state (e.g., deciding
capability levels in the sample form with the generic
whether it is currently at a high Level 2 or a low Level
capability level definitions presented in the previous
3). Rather, it should recognize that its present state is
section. The progressive nature of the five capability
either matching its desired level for that factor or that
levels for each Lean practice should be obvious to the
further improvement is needed. It is also important to
reader.
recognize that the competitive environment is very
© Copyright Massachusetts Institute of Technology, 2001
Page 15 of 166
Inputs to plans of action to leverage opportunities or to move to the desired level of capability
Opportunities
❑C ❑D
Level 4
Supporting data utilized in assessing the current capability level of the Enterprise on this lean practice
❑C ❑D
Level 3
Evidence
Level 2
• Outcomes and lean behaviors that an enterprise will exhibit as it proceeds on its Lean transformation
❑C ❑D
Statement describing little
awareness of this lean
practice
Level 1
CAPABILITY LEVELS
Lean Indicators
(Examples)
Sound bite phrase
A specific lean
practice associated
with this Group
LEAN PRACTICES
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Check the box with “C” for current capability or box “D” for desired capability
LP#
• Generic questions regarding the performance of the enterprise relative to this Group of practices
Diagnostic Questions
❑C ❑D
Page 16 of 166
❑C ❑D
Statement describing
world-class behavior for
this lean practice
Level 5
Brief description of this Group number. In Section I, The Group is one of the Primary Activities from the Transition-to-Lean (TTL) Roadmap.
Section, Group # and Group Name:
Definition: Brief description of the primary characteristics of the process contained in this section
Section #: Section name
Figure 4. Blank LESAT Maturity Matrix
Figure 5. Sample LESAT Maturity Matrix
LEAN PRACTICES
❑C ❑D
Improvement gains provide
resources to facilitate future
improvements. Potential
business opportunities from
applying lean thinking
across core competences
are recognized and plans
have been developed.
❑C ❑D
Benefits sustained from
applying lean thinking within the enterprise are used to
retain current business
and/or win new business.
Level 3
❑C ❑D
There is full use of the
enhanced capabilities and
customer knowledge
throughout the enterprise to
leverage opportunities for
competitive advantage.
Level 4
❑C ❑D
opportunities.
The strategic plan dynamically incorporates extended
enterprise capabilities and
stakeholder interests to
identify and leverage
Level 5
Page 17 of 166
• A process is used to scan the competitive environment to exploit opportunities arising from the enhanced capabilities of the lean enterprise.
• The ability to improve and refine processes quickly is used extensively to respond to changing customer requirements.
• Reduced cost, increased quality and faster response times from waste eliminated are used to maintain or win new business.
❑C ❑D
Level 2
Level 1
Business improvement
initiatives are ad hoc and
are focused on operational
efficiency.
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
lean enabled capabilities
opportunities arising from
Exploiting new business
II.A.1 Leverage Lean
Capability for
Business Growth
LP#
• Are skills and resources drawn from across the extended enterprise to enhance program development efforts?
• Are program risks and resource requirements balanced to assure optimal flow throughout the product life cycle?
• Are assets allocated across the value stream in a consistent and balanced manner?
• Does customer feedback and usage data drive new business process development?
• Are new business opportunities arising from lean enabled capabilities being fully exploited?
Diagnostic Questions
To be successful in the globally competitive environment of the twenty-first century, enterprises must develop and manage partnerships with their
customers and be able to dynamically re-configure and align core competencies among suppliers, the enterprise and its partners in order to deliver
best life cycle value to customers.
II.A. Business Acquisition and Program Management
Definition: Implement lean practices across life-cycle processes for defining customer requirements, designing products and processes, managing supply chains,
producing the product, distributing product and services, and providing post delivery support.
LIFE-CYCLE PROCESSES
Structure of LESAT Assessment Matrices
The LESAT Development Team solicited input from a wide variety of LAI consortium members to determine the set of
factors considered most important in transitioning to a Lean enterprise. The Team determined an overarching organizing structure for the LESAT matrices consisting of three major sections (See Figure 6), consistent with the Lean
Enterprise Architecture described in Part II.
Figure 6 - LESAT Architecture
Section I
Lean Transformation/ Leadership
Section II
Life Cycle Processes
Section III
Enabling Infrastructure
The Enterprise Level Assessment Architecture is the basis for the Lean Enterprise Self-Assessment Tool (LESAT). It provides the generic process definition found in most aerospace enterprises. The LESAT is organized into these three
assessment sections:
Lean Transformation/Leadership
the processes and leadership attributes nurturing the transformation to lean principles and practices
Life Cycle Processes
the processes responsible for the product from conception through post delivery support
Enabling Infrastructure
the processes that provide and manage the resources enabling enterprise operations
Page 18 of 166
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Consequently, the Lean maturity matrices for LESAT are organized as shown in Figure 7.
Figure 7. Organization of LESAT Maturity Matrices
Section I - Lean Transformation/Leadership
I.A. Enterprise Strategic Planning (3 Lean Practices)
I.B. Adopt Lean Paradigm (4 Lean Practices)
I.C. Focus on the Value Stream (4 Lean Practices)
I.D. Develop Lean Structure and Behavior (7 Lean Practices)
I.E. Create and Refine Transformation Plan (3 Lean Practices)
I.F. Implement Lean Initiatives (2 Lean Practices)
I.G. Focus on Continuous Improvement (5 Lean Practices)
Section II - Life-Cycle Processes
II.A. Business Acquisition and Program Management (4 Lean Practices)
II.B. Requirements Definition (2 Lean Practices)
II.C. Develop Product and Process (3 Lean Practices)
II.D. Manage Supply Change (3 Lean Practices)
II.E. Produce Product (2 Lean Practices)
II.F. Distribute and Service Product (4 Lean Practices)
Section III - Enabling Infrastructure Processes
III.A. Lean Organizational Enablers (5 Lean Practices)
III.B. Lean Process Enablers (3 Lean Practices)
A total of 54 Lean practices are included in the LESAT Maturity Matrices (see Part V). Each of these is to be assessed
according to the five level scale presented.
Section I – Lean Transformation/Leadership,
assesses the leadership of an enterprise and their ability to effect a transformation to a Lean enterprise. The focus is
on the Lean practices and processes that are developed and maintained at the top level to guide the activities of the
organization. These overarching practices cut across all of the entities that make up the organization, and so the
emphasis is on how well Lean has been integrated across the enterprise.
© Copyright Massachusetts Institute of Technology, 2000
Page 19 of 166
Structure of LESAT Assessment Matrices
Continued
Section II – Life Cycle Processes,
are defined by the product life cycle, from initial conception through operational support and ultimate disposal.
These processes directly determine the value provided to customers and stakeholders alike. The degree to which an
enterprise is successful in making these processes Lean is a measure of its effectiveness and efficiency. Enterprise
leadership provides the direction and resources to break down barriers among and within Life Cycle processes that
result in wasted resources and reduced value to customers and stakeholders. This section of the LESAT addresses
the level of Lean implementation applicable to these Life Cycle Processes.
Section III - Enabling Infrastructure Processes,
supports the execution of enterprise leadership and life cycle processes. These enabling processes provide supporting services to other organizational units whom they serve as internal customers. Since they enable rather than
directly result in enterprise success, they can be easily overlooked as sources of waste. However, waste that is inherent in these processes can negatively impact the enterprise as a whole in a manner hidden from view.
The focus in these sections is at the Enterprise level and is meant to highlight the key integrative practices at the
uppermost level of an enterprise. A set of Lean practices is identified for each of these sections. These practices
are not meant to be all-inclusive but do represent some of the more important behaviors that Lean organizations
exhibit. Assessing the enterprise against this subset of leading indicator practices will provide a good “snapshot”
of how well an organization is progressing along the Lean journey.
Linkage of LESAT Section I to TTL Roadmap
The Section I practices are directly linked to the Transitioning To A Lean Enterprise (TTL) Guide. They are closely
aligned with the TTL Roadmap, shown in Figure 8.
Page 20 of 166
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Outcomes on
Enterprise Metrics
Environmental
Corrective Action
Indicators
Initial
Lean
Vision
Detailed Corrective
Action Indicators
Detailed Lean Vision
Enterprise Level Roadmap
Figure 8
Enterprise Level
Transformation Plan
Lean
Transformation
Framework
Page 21 of 166
Part IV – Assessment Methodology
For those who have the responsibility for facilitating the assessment process within their organization, it is important to recognize that the assessment methodology consists of several steps that need to be carefully planned and
scheduled. A general overview of the LESAT methodology is shown in Figure 9.
Figure 9
LESAT Methodology
Step 1: Facilitated meeting to introduce tool and pass out materials. Enterprise Leader Champions.
Step 2: Enterprise leaders (with staff as needed) examine LESAT and conduct assessment.
Step 3: Leadership reconvenes to discuss results and determine present maturity level.
Step 4: Leadership determines desired level and measure gap.
Step 5: Develop action plan and prioritize resources.
Prior to the assessment, a number of issues need to be
or other appropriate entity. The distinguishing char-
addressed. The first decision that needs to be made
acteristic of an enterprise is that it should have prof-
has to do with the timing of the assessment.
The
it/loss or other performance accountability. Another
assessment will likely be performed on an annual or
characteristic of an enterprise is that it usually includes
semi-annual basis. Some companies have found that
the life cycle core processes (program management,
conducting the assessment about one month prior to
requirement definition, product development, supply
their annual business planning exercise allows for
chain, production and support) and the enabling
greater impact on setting the annual business objec-
processes (finance, human resources, information sys-
tives. Another issue that needs to be addressed is the
tems, etc.). The particular nature of the enterprise to
definition of the boundaries of the enterprise to be
be assessed will define its senior leadership, cus-
assessed. The “enterprise” may be a division of a
tomers, suppliers, and other stakeholders at an enter-
major corporation, a particular site, a business unit,
prise level.
Page 22 of 166
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Pre-assessment Preparation
LESAT Kick-off Session
Those companies that have been involved with the
A facilitated kick-off meeting is suggested as a means
Lean Aerospace Initiative at MIT will likely have a
of introducing LESAT and bringing everyone to a
good understanding of the Lean Enterprise Model
common level of understanding of the tool, its termi-
(LEM) and how it can be used to identify lean
nology, the assessment process, the time schedule and
practices.
anticipated utilization of the results.
A more recent LAI product, the
A set of
Transition-to-Lean (TTL) Guide and Roadmap may
PowerPoint slides has been prepared by MIT that are
be new to many managers. It is strongly recom-
available for use in this meeting. The slides can be
mended that the “Lean Focus Group” of each com-
tailored to fit a particular company if desired.
pany re-familiarize themselves with the three volumes of the TTL Guide. It is also recommended
Attending this meeting should be the Enterprise
that the enterprise leaders/managers who will
Leader and his/her management team.
participate in the self-assessment read Volume I of
attendee will normally perform the assessment in col-
the TTL Guide, which is an executive overview and
laboration with their own direct reports and key staff.
Each
Volume II, that provides details about the TTL
Roadmap. (A brief overview of Lean is presented
The facilitator should make clear the “ground rules”
in Appendix A and a brief introduction to TTL is
for performing the assessment, distribute materials
presented in Appendix C.) It is also highly recom-
and indicate the timetable for completion.
mended that a “Lean Advocate” be named who is
responsible for planning, coordinating, and facili-
Although the meeting should be facilitated by the
tating the LESAT self-assessment.
appointed LESAT Facilitator, the announcement of the
meeting should come from the Enterprise Leader. It
The LESAT Facilitator should assemble the materials
should be clear to all that the Enterprise Leader is cham-
that will be used in the assessment.
pioning the transition to lean and this assessment.
A LESAT
Workbook (known as the “Blue Book”) containing the
maturity matrices will be required for each participant.
Group Completion of the Assessment
Each of the Enterprise Leader’s management team will
The time horizon for achieving the “Desired Level”
meet with his/her own direct reports and key staff to
for the various lean practices should be specified.
complete the LESAT assessment matrices.
This not only will make the choices for desired levels
assessment is performed, it must be remembered that
easier to determine, it will assure that there is con-
the assessment is being made of the entire enterprise,
sistency among those who participate in the assess-
not individual organizational units. Each group is to
ment.
address all of the 54 lean practices in LESAT, not just
As the
those directly applicable to the group’s mission. Prior
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Page 23 of 166
Part IV – Assessment Methodology
Continued
to actually doing the assessment, it is highly recom-
competitive level on each lean practice. The group
mended that each participant spend some time
reaches consensus on current and desired levels for
reviewing the entire set of LESAT matrices so that their
each of the 54 practices contained in LESAT. It is
overall intent is better understood.
sometimes helpful to have the LESAT Facilitator present during the assessment.
The group manager will schedule a meeting with
his/her direct reports and key staff to perform the
Facilitation of Assessment
assessment. Clarification of any questions should be
The LESAT Facilitator, as the “resident expert”, will
sought from the LESAT Facilitator. Each lean practice
normally be available to assist the various groups in
in LESAT is analyzed and evaluated to determine the
completing the assessment matrices. This assistance
current maturity level for the entire enterprise relative
may range from attending and facilitating the group
to that practice
meetings to simply being available to answer questions and provide guidance.
In arriving at the assessed current maturity level, a
determination is made as to which capability level
Initial Summarization
depicts the organization’s present Lean status for that
The LESAT Facilitator will gather the consensus inputs
practice. The rationale and supporting evidence for
from the various groups and consolidate them for the
each assessment level should be recorded. This doc-
entire enterprise. The inputs are typically entered into
umentation will help provide an ability to create cor-
spreadsheets for summarization. The usual calcula-
rective action plans and will provide inputs for the
tions for each practice include high, low and range of
continuous improvement effort. Additionally, it will
current level and high, low and range of desired level.
help provide consistency for comparison of perform-
Average current and average desired are calculated,
ance in subsequent assessments.
along with the gap between average current and
average desired. Sub-totals by major groupings of
A determination is then made to specify the capabili-
lean practices are sometimes useful. Pareto analyzes
ty level the organization is striving to attain in each of
on current levels and gaps can reveal the key pressure
the practices. Although attaining Level 5 in all prac-
points. Several examples of LESAT rollups are pre-
tices would be an indication of a very Lean enterprise,
sented in Appendix E.
it may not be achievable given the fact that all enterprises have limited resources. Also, some practices
LESAT Wrap-up Meeting
may not be applicable for a particular enterprise. The
The Enterprise Leader, with the assistance of the LESAT
organization must look at its strategic goals and
Facilitator, will schedule a meeting of the same man-
objectives,
agement team who attended the LESAT Kick-off
competitive
advantages,
available
resources and other factors, then decide its desired
Page 24 of 166
Meeting.
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Assessment results across the entire enterprise will be
depth examination of the assessment results will typically
presented, discussed and analyzed. The primary inter-
involve a comparison to current business plans and ini-
est in the results is not so much that specific lean prac-
tiatives. Appropriate adjustments can be determined.
tices were scored high or low, but in learning the regions
of the Transition-to-Lean Roadmap that need special
Post-assessment
attention. It is not uncommon, for example, for a par-
Planning
ticular organization to assess itself at a low capability
The use of the LESAT assessment results will vary among
level on several of the practices within the Roadmap
different organizations. There will usually be some short
grouping “Adopt Lean Paradigm”.
term “quick hits” that are suggested by the results. These
Analysis
and
Action
can be programmed and incorporated into on-going
In addition, the meeting can be used to seek clarification
initiatives as appropriate.
Care should be taken to
on lean practices having a wide range of responses.
assure that any such short-term fixes are not inconsistent
Scores of level 1 (lowest capability) and level 5 (highest
with the long-term lean vision.
capability) should be clarified and explained.
The principle use of the results will be to identify the
It is usually helpful at this meeting to identify and discuss
more critical “gaps” that exist between current and
all lean practices having an average current capability
desired maturity levels and to determine their impact on
level less than some value that the organization feels is
the Enterprise Level Lean Transformation Plan. Changes
a threshold minimum. For example, the team may wish
to the Enterprise Level Plan will almost certainly affect
to identify those practices scoring below, say 1.8 to
one or more Detailed Lean Implementation Plans.
determine if there are common root causes underlying
these low scores. The executive may also wish to chal-
The enterprise should look at the results from all the
lenge average current capability levels greater than, say
practices, not each practice in isolation, to determine
3.5 by asking certain managers to convince him/her
future courses of action. The key here is to analyze gaps
that their capability is really this great.
against the enterprise business objectives so that becoming Lean is not the goal but the means to achieve strate-
Gap analysis is commonly performed to identify lean
gic objectives. It is important to identify enterprise wide
practices for which the gap between the calculated aver-
resources available and then compare this against the
age lows and average highs is greater than 2. These
estimate of resources needed so that the plans can be
indicate those practices for which much opportunity for
prioritized.
improvement exists. Concentration of low current values
practices are most crucial to their enterprise perform-
within certain LESAT sections and grouping of practices
ance and attack these first. Particular attention should
often signify high priority areas for improvement. In-
be paid to additional education and training needs.
Leadership can determine which of the
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Page 25 of 166
Part IV – Assessment Methodology
Continued
Improvement plans should become an integral part of
replaced as better means are developed for perform-
the Enterprise culture. The initial planning for a Lean
ing fundamental tasks. The Transition-to-Lean (TTL)
transformation will not be perfect and modifications
Roadmap provides a structure and overall general
may be required.
flow for transforming an organization over time.
The self-assessment results will
highlight areas for improvement.
Some of these
There is no “ultimate lean state” beyond which
improvements may be effected fairly quickly within the
improvements are no longer possible, so the
existing enterprise structure. Others will require sig-
Roadmap reflects a never-ending journey.
nificant structural modifications. The TTL Roadmap
and Guide contains further guidance for the enter-
Figures 11 and 12 are included as aids to visualizing
prise on how to develop corrective action plans and to
these processes and their on-going relationships.
foster continuous improvement. It suggests a framework in which the organization learns from past
LESAT Checklist
behavior, strives to increase the focus on providing
The several stages of the LESAT assessment process
value to the customer and continually adapts the plans
that are explained above have been collected and
to continue the Lean journey.
shown as a “checklist” in Figure 13.
It is recom-
mended that all steps be followed, although a few are
Figure 10 is included, courtesy of Northrop
marked as “optional”.
Grumman, as an illustration of how the TTL Roadmap
is linked to the LESAT assessment, which in turn pro-
LESAT Assessment Aids
vides the basis for modifications to the Enterprise Level
Appendix E contains a number of forms, formats,
Lean Implementation and Action Plans.
sample meeting agendas, spreadsheet programs, etc.
that are intended to provide guidance and sugges-
The Continuous Improvement/Assessment
tions for the LESAT Facilitator. Rather than prescribing
Cycle
one single approach, alternatives are included for
One of the fundamental principles of the lean para-
selection or modification.
digm is that waste elimination and process improve-
Appendix E were among those that were utilized by
ments are never-ending endeavors.
the companies who participated in the field tests of the
The examples shown in
LESAT Beta version.
The Lean Enterprise Model (LEM) is a repository of
“best practices” that have been collected and organized according to the “Overarching Practices” of lean.
Today’s “best practices” will be improved further or
Page 26 of 166
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Figure 8
Lean
Enterprise Level
LP#
PROGRAM:
Section I.A. Lean Transformation/Leadership
Objective
The decision to pursue a lean transformation is
strategic in nature. Its impact throughout the
CAPABILITY LEVELS
enterprise is profound and pervasive, affecting
Level 3
4
Level 5
all businessLevel
practices
and processes.
The lean
Strategic plans leverage
Transitioning to lean is
The growth implications of
the results of lean
adopted
as a key enterprise
lean are understood
and
enterprise
will
behave
in a fundamentally
new
implementation to achieve
strategy and included in the
lean implementation plans
growth, profitability
strategic plan.
are formulated,
but not inte-significantly
manner,
eliminating
wasteandand
market position.
grated into the strategic plan.
enhancing
all stakeholders
D
❑ C ❑ D relationships
❑ C ❑with
❑C ❑D
Opportunities
Evidence
Lean Indicators
(Examples)
market penetration
profitability and
Lean impacts growth,
Integration of Lean
in Strategic
Planning Process
LEAN PRACTICES
• The strategic planing process includes key
stakeholder’s needs form across the enterprise
• The enterprise is involved in defining and
documenting the best methods for contributing
to customer success.
Success Criteria
• Enterprise leaders are aware of the strategic
opportunities associated with transitioning to a
“lean enterprise.”
• Strategic planning makes allowance for anticipated gains from lean improvements.
Responsibility:
• Lean implementation is included explicitly in the enterprise strategic plan.
❑C ❑D
Lean is recognized, but
relegated to lower levels
of the enterprise and
application is fragmented.
❑C ❑D
Level 2
Level 1
Concepts and benefits of
lean principles and practices
are not evident in culture
or business plans.
• Has full leverage of the extended enterprise stakeholders been incorporated into the strategic plan?
• Does “customer value” strongly influence the strategic direction?
• Has a suitable strategy for growth been identified to utilize resources freed up by improvements?
organization as a result of transitioning to lean?
• Are enterprise leaders fully aware of the potential opportunities (i.e. greater growth, profitability and market penetration) that can be realized within their own
• Understanding Need
for Change
• Build Awareness
Within Senior
Leadership Team
• Establish Enterprise
Strategy
Task
1
01
2 3
1
2
02
3
4
Page 27 of 166
4
(to be completed by responsible person
Major Milestones
Issues:
Impacts/Issues
Impact:
Lean Roadmap Action Plan
• Are enterprise leaders familiar with the dramatic increases in competitiveness that many companies have realized as a result of transitioning to lean?
Diagnostic Questions
enhancing relationships with all stakeholders.
affecting all business practices and processes. The lean enterprise will behave in a fundamentally new manner, significantly eliminating waste and
The decision to pursue a lean transformation is strategic in nature. Its impact throughout the enterprise is profound and pervasive,
I.A. Enterprise
Strategic
Planning
Transformation
Plan
tage, and (3)- satisfaction of stakeholders; along with a continuous improvement in all three parameters.
Definition: Develop, deploy, and manage lean implementation plans throughout the enterprise, leading to: (1)- long-term sustainability, (2)- acquiring competitive advan-
Transformation
I.A. Lean Transformation/Leadership
Framework
Detailed Corrective
Action Indicators
Detailed Lean Vision
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other rights are reserved.
Outcomes on
Enterprise Metrics
Environmental
Corrective Action
Indicators
Initial
Lean
Vision
Enterprise Level Roadmap
Figure 10
TTL R O A D M A P
Execute Next
Cycle of Plan
Changing Customer
Values/Needs
Create/Refine
Enterprise
Prepare the
Organization for
Change
Create Future
State Vision
Assess Current
Strategic Planning
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All other rights are reserved.
LESAT
Identify
Gaps/Prioritize
Actions
Specify Desired
Level
Assess Current
Maturity Level
Changing Customer
Values/Needs
External Forces
Continuous Improvement/Assessment Cycle
Figure 11
LEM
Utilize Best
External Inputs,
Benchmarking
Page 28 of 166
Assessment
(Lean Principles, Practices & Behaviors)
Page 29 of 166
LESAT
Self Assessment
Best Practices
Results
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All other rights are reserved.
TTL
Guide & Roadmap
Lean
Transformation
Best Practices
LEM
Principles and Practices
Preparation
Staging
Lessons Learned
Calibration
External Input
Relationship of LEM, TTL and LESAT to Lean Transformation
Figure 12
Figure 13 LESAT ASSESSMENT PROCESS
Essential
Pre-assessment Preparation
Determine timing of the assessment
Optional
X
Administer a “test” of management’s understanding of Leanidentify areas for education prior to using LESAT
X
Conduct management Lean Education event
X
TTL Exposure/Familiarization
Facilitator
Enterprise leaders/managers who will participate in assessment
X
Assemble Assessment Material
X
Enterprise leadership defines boundaries for assessment
X
Define time horizon for Desired Level determinations
X
LESAT Kick-off Session
Introductory presentation
X
Define “Ground Rules” for assessment
X
Distribute assessment materials
X
Provide schedule for completion
X
Provide contact point for assistance
X
Group Completion of the Assessment
Read entire LESAT before starting
X
Seek clarification from Facilitator
X
Analyze each lean practice, determine current maturity
level for the entire enterprise. Note evidence to support this determination
X
For the time horizon specified, determine the desired maturity level
X
Discuss among members of the group to arrive at consensus
X
Provide group results to LESAT Facilitator
X
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other rights are reserved.
Essential
Facilitation
Attend group assessment sessions
Provide guidance, answer questions
Optional
X
X
Initial Summarization
Consolidate inputs
X
Prepare summaries, prepare for Wrap-up Meeting
X
LESAT Wrap-up Meeting
Review of LESAT process
X
Clarification of results
X
Consensus on future direction
X
Interpretation
X
Alignment with other initiatives
X
Areas for further study
X
Next steps/actions indicated
X
Post-assessment Analysis and Action Planning
Suggested quick hits
X
Impact on Enterprise Level Lean Implementation Plan
X
Adjustments to Detailed Lean Implementation Plans
X
Re-deployment of resources
X
Additional education and training
X
Preparation for Next Assessment
X
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other rights are reserved.
Page 31 of 166
Part V - LESAT Maturity Matrices
This part of the LESAT Facilitator’s Guide contains the Lean Maturity Matrices used in assessing the current status of the enterprise in its lean transformation. The version included here includes the complete set of 54 lean
practices, the five level descriptions for each practice, Diagnostic Questions and Lean Indicators. The version of
the matrices contained in the LESAT Maturity Matrices follows the same organization, but contains all the information for each practice as shown in Figure 4 in Part III. The LESAT Maturity Matrices version is designed for
actually entering data, marking up, etc.
Linkage of LESAT Section I to TTL Roadmap
The LESAT contains three major sections:
Section I – Enterprise Transformation/Leadership
Section II – Life-cycle Processes
Section III – Enabling Infrastructure Processes
Section I is tied directly to the Transition-to-Lean Roadmap. A TTL Roadmap diagram is included before each major
segment of Section I to indicate the Major Tasks that are being assessed at that point.
Page 32 of 166
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LESAT Maturity Matrices
Section I: Lean Transformation/Leadership
I.A.
Enterprise Strategic Planning
I.B.
Adopt Lean Paradigm
I.C.
Focus on the Value Stream
I.D.
Develop Lean Structure and Behavior
I.E.
Create and Refine Transformation Plan
I.F.
Implement Lean Initiatives
I.G. Focus on Continuous Improvement
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Page 33 of 166
Section I
Lean Transformation/ Leadership
Enterprise Strategic Planning
Adopt Lean Paradigm
Focus on the Value Stream
Develop Lean Structure and Behavior
Create and Refine Transformation Plan
Implement Lean Initiatives
Focus on Continuous Improvement
Section II
Life Cycle Processes
Section III
Enabling Infrastructure
Lean Transformation/Leadership consists of the major elements contained within the Transition to Lean
(TTL) Roadmap. The TTL Roadmap describes a logical sequence of Primary Activities and the Major Tasks
required to complete each of these Primary Activities. The TTL Roadmap portrays the overall “flow” of
action steps necessary to initiate, sustain, and continuously refine an Enterprise Transformation based
upon Lean principles and practices.
Page 34 of 166
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ronment and conditions necessary for a successful Lean transformation are
created. The organization is then prepared for launching into detailed
planning and implementation. The third cycle is the Short Term Cycle, in
which detailed implementation is planned, executed, and monitored. This
framework for assisting companies in their transition to Lean. It portrays
an overall “flow” of action steps that can initiate, sustain, and continuous-
ly refine the transformation of an Enterprise based upon Lean principles
and practices.
occurring in the dynamic external environment.
paradigm. This cycle is closely linked to the Enterprise Strategic Planning
Page 35 of 166
TRANSITION-TO-LEAN ROADMAP: ENTERPRISE LEVEL
on lessons learned during implementation and to accommodate changes
which specifies the actions associated with the decision to adopt the Lean
© Copyright Massachusetts Institute of Technology, 2000
action phases. The Long Term Cycle is re-entered periodically to capitalize
The Roadmap comprises three “cycles.” First is the Entry/Re-entry Cycle,
cycle has a fast clock speed, with ongoing action-monitoring-corrective
cycle. The second cycle is called the Long Term Cycle, in which the envi-
The Enterprise Level Transition-to-Lean Roadmap provides a general
Transition-To-Lean Roadmap: Enterprise Level
Page 36 of 166
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SECTION I - ENTERPRISE STRATEGIC PLANNING
encompass the extended enterprise.
practices, policies, and behavior will no longer be valid. A lean enterprise
Full benefits of lean implementation are achieved when they
plans.
tives and as such must be an integral part of strategic and operational
Many of the traditional assumptions underlying the Enterprise’s processes,
fundamental structure and its relationship with the external environment.
Lean implementation activities are enablers for achieving strategic objec-
nally and externally) in fundamentally new ways.
affected enterprise to undertake a comprehensive review of its “collective
mental model.” This amounts to a thorough analysis and evaluation of its
has a far different “look and feel;” indeed, it will “do business” (both inter-
Significant, fundamental shifts in the competitive environment cause each
Enterprise Strategic Planning
Opportunities
Evidence
Lean Indicators
(Examples)
market penetration
profitability and
Lean impacts growth,
Integration of Lean
in Strategic
Planning Process
LEAN PRACTICES
❑C ❑D
• Strategic planning makes allowance for anticipated gains from lean improvements.
• Lean implementation is included explicitly in the enterprise strategic plan.
❑C ❑D
Page 37 of 166
SECTION I.A. - ENTERPRISE STRATEGIC PLANNING
❑C ❑D
❑C ❑D
Strategic plans leverage
the results of lean
implementation to achieve
growth, profitability and
market position.
Transitioning to lean is
adopted as a key enterprise
strategy and included in the
strategic plan.
The growth implications of
lean are understood and
lean implementation plans
are formulated, but not integrated into the strategic plan.
Lean is recognized, but
relegated to lower levels
of the enterprise and
application is fragmented.
Concepts and benefits of
lean principles and practices
are not evident in culture
or business plans.
❑C ❑D
Level 5
Level 4
Level 3
Level 2
Level 1
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
LP#
• Has full leverage of the extended enterprise stakeholders been incorporated into the strategic plan?
• Does “customer value” strongly influence the strategic direction?
• Has a suitable strategy for growth been identified to utilize resources freed up by improvements?
organization as a result of transitioning to lean?
• Are enterprise leaders fully aware of the potential opportunities (i.e. greater growth, profitability and market penetration) that can be realized within their own
• Are enterprise leaders familiar with the dramatic increases in competitiveness that many companies have realized as a result of transitioning to lean?
Diagnostic Questions
enhancing relationships with all stakeholders.
affecting all business practices and processes. The lean enterprise will behave in a fundamentally new manner, significantly eliminating waste and
The decision to pursue a lean transformation is strategic in nature. Its impact throughout the enterprise is profound and pervasive,
I.A. Enterprise Strategic Planning
tage, and (3)- satisfaction of stakeholders; along with a continuous improvement in all three parameters.
Definition: Develop, deploy, and manage lean implementation plans throughout the enterprise, leading to: (1)- long-term sustainability, (2)- acquiring competitive advan-
I.A. Lean Transformation/Leadership
LEAN PRACTICES
LEAN PRACTICES
Means of defining value to
customer(s) is informal and
unstructured.
❑C ❑D
Page 38 of 166
❑C ❑D
SECTION I.A. - LEAN TRANSFORMATION/LEADERSHIP
• Risk and responsibilities are apportioned when leveraging the extended enterprise suppliers and partners.
• Strategic planning encompasses the total enterprise, including customer, alliances/partners, employees and suppliers.
❑C ❑D
Integration of the extended
enterprise contributes to
innovation, growth,
increased profitability and
market position.
Integration and balancing of
stakeholder values are
achieved via collaborative
supplier relations and
strategic partnering.
Strategic planning process
explicitly includes
consideration of key
stakeholders in value
streams.
❑C ❑D
Level 5
Level 4
❑C ❑D
Competitiveness is
enhanced, as customer
value becomes the predominant driving force throughout the extended enterprise.
Customer definition of value
strongly influences the
strategic direction.
❑C ❑D
Level 5
Level 4
Level 3
• Strategic planning is strongly influenced by stakeholder and customer value.
❑C ❑D
Initial opportunities
identified for establishing
extended enterprise linkages.
Relations with customers
and suppliers reflect a
“We-They” mentality.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
• Customer value strongly influences policies, practices and behavior.
• A formal process exists to measure and assess customer satisfaction.
• The enterprise understands what constitutes success for its customers.
❑C ❑D
How the enterprise can
best contribute to customer’s
success is well defined and
incorporated into most
projects/programs.
Level 3
• Enterprise employs a formal process for determining customer value.
Structured process for
defining value is applied to
selected customers.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
enterprise to suppliers
customer through the
Value stream extends from
I.A.3. Leveraging the
Extended
Enterprise
LP#
Opportunities
Evidence
Lean Indicators
(Examples)
enterprise value stream
Customers pull value from
I.A.2. Focus on
Customer Value
LP#
segment of the Roadmap provides a framework for acquiring an in-depth
understanding of Lean and for obtaining full commitment from Senior
Managers to launch a Lean transformation.
duction. Most of today’s business leaders climbed the ladder of success
while following the same mass-production practices they are now being
asked to abandon.
Page 39 of 166
SECTION I.B. - ADOPT LEAN PARADIGM
Enterprise and a vision for its interactions with the rest of the world. This
that are counter-intuitive and diametrically opposed to those of mass pro-
© Copyright Massachusetts Institute of Technology, 2000
Lean requires a deep understanding of the fundamental aspects of an
The Lean paradigm consists of many concepts, principles, and practices
Adopt Lean Paradigm
LEAN PRACTICES
❑C ❑D
Leaders are actively seeking
opportunities to learn about
lean. There is an initial
grasp of the extent of the
paradigm shift for the
enterprise.
Little interest in learning
lean principles is evident
among enterprise leadership.
Page 40 of 166
❑C ❑D
Leaders contribute to the
development / refinement
of the body of knowledge
about lean.
Level 4
❑C ❑D
Lessons learned in
implementing lean are
actively shared across the
organization and within
the extended enterprise.
Level 5
SECTION I.B. - ADOPT LEAN PARADIGM
• Majority of enterprise leaders have received significant exposure and education in lean principles, practices and behavior.
• Leaders regularly apply and use lessons learned in “lean”.
❑C ❑D
The leaders are adopting
lean learning and continuously applying lean principles across the enterprise.
Level 3
• A formal lean education process for senior leaders has been established.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
learning the new
“Unlearning” the old,
I.B.1. Learning and
Education in
“Lean” for
Enterprise
Leadership
LP#
• Has a compelling case been developed for the Lean transformation?
• Has a common vision of lean been communicated throughout the enterprise and within the extended enterprise?
• Do all senior leaders and management enthusiastically support a transformation to lean?
• Do enterprise leaders and senior managers understand the lean paradigm at the enterprise level?
Diagnostic Questions
different ways.
understands and buys into the lean paradigm since they will be required to create a vision for doing business, behaving and seeing value in fundamentally
Transitioning to lean requires a significant modification to the business model of the enterprise. It is imperative that the enterprise leadership
I.B. Adopt Lean Paradigm
LEAN PRACTICES
LEAN PRACTICES
Page 41 of 166
❑C ❑D
Common vision of lean is
shared by the extended
enterprise.
Level 4
❑C ❑D
Senior leaders are
championing the
transformation to lean
within the enterprise.
Level 4
SECTION I.B. - ADOPT LEAN PARADIGM
❑C ❑D
an active part of achieving it.
Stakeholders have internalized the lean vision and are
Level 5
❑C ❑D
extended enterprise.
Senior leaders and
management mentor and
foster lean champions
internally and through the
Level 5
• The vision incorporates a new mental model of how the company would act and behave according to lean principles and practices.
• The vision has been communicated to all levels and has extensive buy-in by most employees.
❑C ❑D
Lean vision has been
communicated and is understood by most employees.
Level 3
• The role that lean plays in achieving the vision is clearly defined.
❑C ❑D
Senior leaders adopt
common vision of lean.
Senior leaders have varying
visions of lean, from none
to well-defined.
❑C ❑D
Level 2
Level 1
❑C ❑D
CAPABILITY LEVELS
• Senior management are champions in transforming the enterprise.
• Management provides support and recognition for positive actions
• There is a consensus commitment supporting a transformation to lean.
❑C ❑D
“Lean” is integral to enterprisewide meetings, senior staff
meetings, etc.; senior
managers personally and
visibly lead lean transition.
Level 3
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
of the enterprise
New mental model
I.B.3. Lean Enterprise
Vision
LP#
Opportunities
Evidence
Lean Indicators
(Examples)
some endorse while others
may actively resist.
management is variable –
leading it personally
❑C ❑D
Senior management buys
into group commitment; senior leaders / managers who
cannot or will not adapt are
replaced.
Level of commitment
among senior leaders and
Level 2
Level 1
Senior management
I.B.2. Senior
Management
Commitment
LP#
LEAN PRACTICES
Level 1
-
Level 2
❑C ❑D
Enterprise senior leaders
develop an urgent and
compelling case for the lean
transformation.
Level 3
❑C ❑D
Urgent and compelling case
for lean transformation has
been communicated and the
organization rallies behind it.
Level 4
• Lean transformation progress is integral to leadership discussions and events.
Page 42 of 166
Level 5
❑C ❑D
extended enterprise.
Urgent and compelling case
for lean is expanded to and
accepted throughout the
SECTION I.B. - ADOPT LEAN PARADIGM
❑C ❑D
Urgent and compelling case
for lean is expanded to and
accepted by key suppliers.
• The implications and time scales of the vision have been translated for each area of the enterprise.
• A compelling business case for lean has been developed and communicated.
❑C ❑D
Scan of environment
identifies competitive
threats and need for action.
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
force for Lean
The primary driving
I.B.4. A Sense of Urgency
LP#
tomer’s perception of value.
resource expenditure that cannot be associated with this goal is regarded
systems view.
tions. The pulling action extends beyond the Enterprise to suppliers and
Page 43 of 166
© Copyright Massachusetts Institute of Technology, 2000
SECTION I.C. - FOCUS ON THE VALUE STREAM
It is important to optimize across these value streams by taking a global
ing in cascaded pulling actions back upstream across all Enterprise func-
other external agencies.
of the primary value streams that flow to all of the primary “stakeholders.”
It is helpful to visualize customers “pulling” value from the company, result-
In a complex Enterprise, it is useful to visualize and consider the balance
added, thereby better defining for the Enterprise how to capture the cus-
firm should be focused on creating value for its customers. Any action or
as waste and should be eliminated.
Enterprise goals and metrics should also be expressed in terms of value-
A primary concept of Lean thinking is that all actions and resources of a
Focus On The Value Stream
LEAN PRACTICES
The documented process
flow differs from the actual
flow. There is an initial
understanding of the need
for formal mapping and
analysis.
❑C ❑D
❑C ❑D
Principal current value
stream(s) are defined,
allowing the identification of
critical interactions.
Significant opportunities for
eliminating waste and creating value are identified and
aligned with the strategic
objectives.
Level 3
Page 44 of 166
❑C ❑D
Depth and breadth of
knowledge of value stream
elements and supporting
processes exposes
interdependencies across
the enterprise.
Level 4
SECTION I.C. - FOCUS ON THE VALUE STREAM
❑C ❑D
extended enterprise.
Updated value streams
and their independencies
are evaluated across the
Level 5
• Current value streams of major customers/product lines have been mapped, and hand off points and interfaces clearly defined.
• The practice and language of value stream mapping is recognized as an important part of an iterative improvement process.
• A formal process has been established for identifying customer and stakeholder value.
Key stakeholders and what
they value are identified.
Present processes are
mapped and initial analysis
is underway.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
value to customers
How we now deliver
I.C.1. Understanding the
Current Value
Stream
LP#
• Has a system of balanced performance measures been established that reflect progress towards strategic business objectives?
• Does the enterprise understand clearly how it currently delivers value to customers?
• Are enabling infrastructure processes being aligned to value stream flow?
• Does the enterprise understand how material and information flow throughout the various elements of the enterprise?
• Have the value streams of all stakeholders been mapped, integrated and balanced?
• Is a formal process utilized to explicitly determine “value to the customer”?
Diagnostic Questions
documented, followed by improving the value stream by minimizing waste. Lean metrics are specified and stakeholder involvement clarified.
Value creation with minimal waste becomes the primary driving force of the enterprise. The current means of delivering customer value are
I.C. Focus on the Value Stream
LEAN PRACTICES
LEAN PRACTICES
Level 1
Level 2
❑C ❑D
Some primary flow paths
have been overhauled to
overcome significant barriers to flow.
❑C ❑D
Primary flow paths are
simplified and aligned to the
value stream(s), which
allows information and
material to flow as required.
Level 3
Management understands
that the present processes
do not meet the future lean
enterprise objectives.
❑C ❑D
❑C ❑D
Future value stream(s) are
developed, which encompass future enterprise goals
and satisfy stakeholder
requirements.
Level 3
Page 45 of 166
❑C ❑D
Future value stream(s) are
refined to accommodate a
changing environment.
Level 4
❑C ❑D
extended enterprise.
Future value stream(s) are
refined to dynamically
accommodate a changing
environment across the
Level 5
❑C ❑D
the extended enterprise.
Material and information
flow seamlessly and
responsively throughout
Level 5
SECTION I.C. - FOCUS ON THE VALUE STREAM
• Future value stream(s) designs have been generated for the primary value stream(s) and their supporting processes.
• The future value stream(s) reflects new and improved ways to realize value and minimize non-value adding activities.
• A formal process has been established to identify how the enterprise can best deliver value to customers and stakeholders.
A concept for future value
stream(s) design has been
created based on balanced
stakeholder requirements.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
• Information and material flows are responsive to stakeholder needs.
• Material flow paths have been simplified and shortened to enhance flow.
❑C ❑D
Material and information
flow seamlessly throughout
the enterprise.
Level 4
• Information flows have been rationalized to assure interoperability among enterprise elements.
❑C ❑D
Material and information
flows are disjointed and
“optimized” process by
process. “Push” mentality
prevails.
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
enterprise vision
Value stream to meet the
I.C.3. Designing the
Future Value
Stream
LP#
Opportunities
Evidence
Lean Indicators
(Examples)
materials and information
“Single piece flow” of
I.C.2. Enterprise Flow
LP#
LEAN PRACTICES
Baseline performance
measures are established to
stimulate progress towards
the lean future state and
are visible throughout the
enterprise.
❑C ❑D
Performance measures are
ad hoc, inconsistent and
focused on functional areas
rather than value streams.
❑C ❑D
❑C ❑D
Performance measurement
system uses a minimal and
balanced set of measures
based on strategic objectives
and aligning local with
enterprise metrics.
Level 3
Page 46 of 166
❑C ❑D
Measurement systems and
target setting pulls
performance improvement
throughout the enterprise.
Level 4
• Performance measures used assure that local and enterprise measures are aligned.
SECTION I.C. - FOCUS ON THE VALUE STREAM
❑C ❑D
extended enterprise.
A common target setting
and measurement process
pulls performance
improvement across the
Level 5
• A balanced and minimal set of performance measures are used to track lean implementation progress towards the strategic direction.
-
Level 2
Level 1
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
drive enterprise behavior
Performance measures
I.C.4. Performance
Measures
LP#
ous improvement efforts, facilitated by change agents.
Lean may have an impact on organizational structure. Incentives must be
rationalized with the new behavior desired. There will be an impact on
most business systems, processes, and policies.
tation of Lean principles and practices.
Both the structure and the behavior of Lean organizations are significant-
ly different from those of mass-production organizations. The mass-pro-
duction mentality, so firmly embedded in the organization’s collective
Page 47 of 166
SECTION I.D. - DEVELOP LEAN STRUCTURE AND BEHAVIOR
and practices must be learned, practiced, and perfected through continu-
conditions within the Enterprise that will enhance the successful implemen-
© Copyright Massachusetts Institute of Technology, 2000
mindset, must be relentlessly rooted out and banished. Lean principles
This section of the Roadmap deals with creating the mental model and
Develop Lean Structure and Behavior
LEAN PRACTICES
• Career progression potential exists across both processes and functions.
❑C ❑D
Partially deployed crossfunctional organizational
processes are aligned with
enterprise value stream(s).
Level 3
• There is extensive use of cross-functional processes across the enterprise.
• Functional barriers have been minimized.
❑C ❑D
Initial efforts are underway
to identify functional barriers and understand their full
implications.
The enterprise operates as
functional silos.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
Page 48 of 166
enterprise.
❑C ❑D
Cross-functional, processbased orientation is aligned
across the extended
Level 5
SECTION I.D. - DEVELOP LEAN STRUCTURE AND BEHAVIOR
❑C ❑D
Extensive cross-functional
processes are implemented
across the enterprise.
Functional units now serve
as knowledge centers for
skill retention.
Level 4
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
value delivery
Organize to support
I.D.1. Enterprise
Organizational
Orientation
LP#
• Are lean change agents positioned and empowered to provide guidance and leadership for the lean transformation?
• Is prudent risk taking encouraged?
• Has decision-making been delegated to the lowest practical level?
• Have incentives been developed which are consistent with the behavior desired?
• Have policies and procedures been revised to promote and encourage lean behavior?
• Are relationships with stakeholders based on mutual respect and trust?
• Is organizational structure designed for flexibility and responsiveness to changes in the external environment?
• Has an organizational structure been implemented that focuses on core processes along the customer value stream?
Diagnostic Questions
implementation of lean principles and practices.
structure, incentives, policies, business systems and processes must be aligned and coordinated to elicit the behavior required for successful
Organization infrastructure must be assessed and modified prior to launching a lean initiative as well as throughout the transformation. Organizational
I.D. Develop Lean Structure and Behavior
LEAN PRACTICES
LEAN PRACTICES
❑C ❑D
Enterprise leaders are
accessible and visible,
developing two-way
communications in open,
concise and timely form.
Level 3
Page 49 of 166
❑C ❑D
Communication processes
are undergoing continuous
refinement and information
is exchanged or can be
pulled as required.
Level 4
• Employee input is valued and plays a key part in decision-making.
❑C ❑D
❑C ❑D
extended enterprise.
Comprehensive system of
two-way communication is
employed throughout the
Level 5
(win-win).
Stakeholders modify behavior so as to enhance extended enterprise performance
Level 5
SECTION I.D. - DEVELOP LEAN STRUCTURE AND BEHAVIOR
• Technology has been leveraged to speed communications flow and accessibility, while filtering unnecessary communications.
• Open and timely communications exist among stakeholders. i.e. regular meetings with employees, newsletters, etc.
❑C ❑D
Basic communication
mechanisms are employed
but are not uniform;
communication strategy is
under development.
Communication is largely
top-down, limited and
lagging.
❑C ❑D
Level 2
CAPABILITY LEVELS
• Stable and cooperative relationships exist among most enterprise stakeholders.
Level 1
❑C ❑D
Mutual respect and trust
exists across the extended
enterprise with equitable
sharing of benefits from
continuous improvement
initiatives.
Stable and cooperative
relationships exist across
the enterprise; cooperative
relations are established
with some enterprise partners.
❑C ❑D
Level 4
Level 3
• Communication barriers based upon organizational position have been significantly reduced.
❑C ❑D
Selective application of
enterprise perspective
results in breaking down of
organizational barriers and
developing mutual trust.
Relationships tend to be
determined by organizational role, resulting in a
“we-they” perspective.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
when required
Information exchanged
I.D.3. Open and Timely
Communications
LP#
Opportunities
Evidence
Lean Indicators
(Examples)
“Win-win” vs. “we-they”
I.D.2. Relationships
Based on Mutual
Trust
LP#
LEAN PRACTICES
LEAN PRACTICES
Centralized decision-making occurs in a hierarchical
structure with limited
delegation of authority.
❑C ❑D
❑C ❑D
Organizational environment
and management system
supports limited decisionmaking at point of
application and need.
Level 3
❑C ❑D
Executive compensation and
employee incentives are
linked directly to attainment
of lean objectives.
Level 3
Page 50 of 166
❑C ❑D
Incentive systems successfully
contribute to achievement
and sustainability of lean
objectives.
enterprise.
❑C ❑D
Lean incentives are
deployed, with measurable
success across the extended
Level 5
❑C ❑D
application.
Decision-making across the
extended enterprise is
delegated to the point of
Level 5
SECTION I.D. - DEVELOP LEAN STRUCTURE AND BEHAVIOR
• Incentives encourage local improvements that will benefit multiple processes or value steam performance.
• Incentives are based on performance measures that encourage lean activity.
• Incentives include a balance of money and non-monetary rewards / recognition to encourage lean activity.
❑C ❑D
Incentives that reward and
encourage lean behavior
are deployed in some areas.
There is sporadic use of
incentives and an awareness that some incentives
discourage lean behavior.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
Level 4
• The extent and types of empowerment are tailored to match the environment and people empowered.
• Empowerment enables swift and effective decision-making closest to the point of use.
❑C ❑D
Decision processes are
continually refined to
promote increased
accountability and
ownership at point of use.
Level 4
• Managers and supervisors serve as mentors and educators, promoting lower level decision-making.
Appropriate structure and
training is being put in
place to enable empowerment.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
want
Reward the behavior you
I.D.5. Incentive
Alignment
LP#
Opportunities
Evidence
Lean Indicators
(Examples)
lowest possible level
Decision-making at
I.D.4. Employee
Empowerment
LP#
LEAN PRACTICES
LEAN PRACTICES
Innovation initiatives are
sporadic and ad hoc; security, stability and risk aver
sion drive most decisionmaking.
❑C ❑D
❑C ❑D
Innovation initiatives are
underway in selected areas;
measures for assessing
impact are in use.
Level 3
Page 51 of 166
❑C ❑D
Innovation initiatives are
flourishing across the
enterprise; prudent risk
taking is encouraged
and rewarded.
Level 4
❑C ❑D
Appropriately skilled change
agents are assigned to key
areas with the authority to
effect changes.
Level 3
❑C ❑D
❑C ❑D
the extended enterprise.
Change agents are providing a critical resource of
lean knowledge, skill and
experience in transforming
Level 5
enterprise.
Comprehensive innovation
program is implemented
and positive results recognized across the extended
Level 5
SECTION I.D. - DEVELOP LEAN STRUCTURE AND BEHAVIOR
• Process for developing “lean masters” and other change agents has been established.
❑C ❑D
Change becomes
self-generating, initiated by
employees as well as
change agents.
Level 4
• Lean change agents operate throughout all areas and cross-transfer lean implementation experience.
• Lean change agents have been designated and empowered.
❑C ❑D
There is formal identification
of change agents, along
with role definition, authority delegation and program
of education and training
for change agents.
Change agents are
sporadically distributed, but
without change authority.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
• Suggestion programs have been properly incentivized to give recognition to originators of innovative ideas.
• The review process for suggestions has been streamlined and gives clear visibility of the progress of each suggestion.
Initial efforts are underway
to develop systems, processes and procedures for fostering innovations.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
drivers of change
The inspiration and
I.D.7. Lean Change
Agents
LP#
Opportunities
Evidence
Lean Indicators
(Examples)
risk rewarding
From risk aversion to
I.D.6. Innovation
Encouragement
LP#
Page 52 of 166
© Copyright Massachusetts Institute of Technology, 2000
previously established, thereby aligning the strategic and Lean visions. It
The Enterprise-Level Plan must be designed to address the explicit “need”
SECTION I.E. - CREATE AND REFINE TRANSFORMATION PLAN
Critical resources (including education and training) must be assured.
Key enterprise transformation activities must be identified and prioritized.
formed in the “Focus on Value Stream” block.
we are now in a position to develop, implement, and monitor a compre-
hensive Enterprise-Level Plan to achieve the desired transformation.
will also draw heavily from the enterprise-level value-stream mapping per-
Having prepared the organization for implementing the Lean paradigm,
Create & Refine Transformation Plan
LEAN PRACTICES
❑C ❑D
Enterprise improvement
plans are coordinated and
prioritized across enterprise
value stream(s), with a
timeline for expected
measurable results.
Level 3
• Plans balance long-term and short-term stakeholder objectives for the best overall solution.
• The milestone targets of the lean transformation plan are broken-down by section and deployed across the enterprise.
Page 53 of 166
❑C ❑D
Lean transformation plan is
continuously refined through
learning from implementation results and changing
strategic requirements.
Level 4
• A process is in place to incorporate lessons learned into the enterprise-level lean transformation plan.
❑C ❑D
Enterprise-level view
identifies lean implementation projects, which are prioritized to meet long and
short-term strategic objectives.
Individual planning efforts
are mostly bottom up initiatives with little priority or
coordination established
at enterprise level.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
❑C ❑D
Lean transformation plan
balances mutual benefits
of stakeholders across the
extended enterprise.
Level 5
SECTION I.E. - CREATE AND REFINE TRANSFORMATION PLAN
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
enterprise
across the extended
Charting the course
I.E.1. Enterprise-Level
Lean
Transformation
Plan
LP#
• Have lessons learned and best practice been effectively incorporated within lean transformation planning?
• Does the current education and training program adequately support the strategic direction(s) and lean transformation?
• Have adequate resources been provided to facilitate lean transformation?
• Is the enterprise level lean transformation plan prioritized and aligned with strategic business objectives?
Diagnostic Questions
Identify, prioritize and sequence a comprehensive set of lean initiatives that collectively constitute the plan for achieving the desired transformation.
I.E. Create and Refine Transformation Plan
LEAN PRACTICES
LEAN PRACTICES
❑C ❑D
Level 3
❑C ❑D
Resources are allocated as
required for execution of the
lean transformation plan
and prioritized across the
value stream.
Level 4
Page 54 of 166
❑C ❑D
A pool of earmarked
resources is provided for
lean initiatives with minimal
justification required.
Level 5
❑C ❑D
Education and training
program is comprised of a
balanced and sequenced set
of elements to support the
coordinated transformation
plan.
Level 3
❑C ❑D
Education and training at all
levels is periodically
reviewed to check alignment
and suitability to the lean
transformation plan.
Level 4
❑C ❑D
transformation plan.
Education and training
program supports the
upcoming needs of the
extended enterprise
Level 5
SECTION I.E. - CREATE AND REFINE TRANSFORMATION PLAN
• The application of lean principles learned in training and education is formally appraised.
• Education and training has a balanced and sequenced set of elements to support the lean transformation plan.
• Education and training programs, including refreshers, are provided on a just-in-time basis.
❑C ❑D
Education and training covers a set of skills required to
support the lean
transformation projects.
There is little coordination
of education and training
programs to facilitate
change.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
❑C ❑D
extended enterprise.
A pool of earmarked
resources is provided for
lean initiatives across the
• The procedure to apply for improvement resources has been simplified, and gives priority to improvements that benefit multiple areas.
• Time to build on improvements by personal contribution is given at all levels.
• Resources are committed to support the level and speed of lean transformation required.
❑C ❑D
Level 2
Limited enterprise-level
resources are committed
and often applied to the
symptom rather than the
root cause.
Level 1
Little or no resources are
provided for process
improvement or waste
elimination.
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
Just-in-time learning
I.E.3. Provide Education
and Training
LP#
Opportunities
Evidence
Lean Indicators
(Examples)
lean
Resource provision for
I.E.2. Commit Resources
for Lean
Improvements
LP#
ule. These plans are executed and monitored. Short-term corrective
action is determined and incorporated as necessary.
required to respond to the identified critical needs. Within these parame-
ters and overall schedule, specific short-term action plans and programs
© Copyright Massachusetts Institute of Technology, 2000
Page 55 of 166
SECTION I.F. - IMPLEMENT LEAN INITIATIVES
resources are provided within the framework of a comprehensive sched-
provides the broad parameters and directions for achieving the changes
are now developed. Detailed plans at the Enterprise level are linked to
lower-level plans. The lower-level plans are prioritized and time-phased
The Enterprise-Level Transformation Plan created in the previous segment
Implement Lean Initiatives
LEAN PRACTICES
❑C ❑D
Detailed lean implementation plans supporting the
enterprise level plan are
developed and coordinated
across processes.
Level 3
Page 56 of 166
❑C ❑D
transformation plan.
Implementation plans from
extended enterprise are
coordinated with and
support the lean
Level 5
SECTION I.F. - IMPLEMENT LEAN INITIATIVES
❑C ❑D
Detailed lean implementation plans accounting for
any interdependencies are
refined and integrated
across the enterprise. Best
practices are shared.
Level 4
• Detailed improvement plans are coordinated throughout the enterprise where shared implications exist.
• A process is in place to incorporate lessons learned in detailed implementation plans.
• Detailed implementation plans are aligned to milestone targets of the enterprise-level plan.
❑C ❑D
Key goals of the enterprise
lean transformation plan are
understood by most
employees. Process owners
are involved in developing
detailed plans linked to the
goals/strategic objectives of
the enterprise plan.
Improvements are generally
optimized for individual
areas and employees can
not clearly see the links
between localized and
enterprise goals.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
improvements
Coordinating lean
I.F.1. Development of
Detailed Plans
Based on
Enterprise Plan
LP#
• Do lean initiative plans contain a feedback mechanism for revision and to share lessons learned?
• Has a uniform system been established to track the progress of lean initiatives with respect to the overall plan?
• Has the enterprise level lean transformation plan been translated into detailed execution projects?
Diagnostic Questions
determine how they are integrated at the enterprise level.
Flow down the enterprise-level plan into specific actions, programs and projects that are executed within each process organizational area and
I.F. Implement Lean Initiatives
LEAN PRACTICES
Results of process
improvement initiatives are
observed but not quantified.
❑C ❑D
❑C ❑D
There is a project
management process
implemented to track
progress of detailed lean
projects against milestones,
with feedback provided to
enterprise level. Appropriate
corrective action is initiated
within individual projects.
Level 3
Page 57 of 166
❑C ❑D
The project management
process can readily assess
detailed plans and can
accommodate revisions
mandated by changes to
the enterprise level lean
transformation plan.
Level 4
❑C ❑D
enable real-time tracking.
The project management
process is deployed across
the extended enterprise to
Level 5
• Changes to processes / value stream map(s) are documented and updated regularly.
SECTION I.F. - IMPLEMENT LEAN INITIATIVES
• The responsibility and accountability for improvement success is assigned locally to enable fast corrective action on deviations from the plan.
• Lean initiatives are coordinated and tracked, with the individual results “rolled up” and assessed against enterprise level milestones and targets.
Process is under
development to permit
tracking and quantification
of progress of the detailed
lean implementation. Data
from some projects is being
reviewed.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
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All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
Assessing actual
outcomes against goals
I.F.2. Tracking Detailed
Implementation
LP#
“Focus on the Value Stream”, taking us back to the Long Term Cycle.
and continuity. Only when the activities in this segment become a natural
the segment “Enterprise Strategic Planning” in the Entry/Re-entry Cycle.
“Create and Refine Transformation Plan” segment.
Page 58 of 166
© Copyright Massachusetts Institute of Technology, 2000
On those occasions when significant structural modifications seem to be
within the Enterprise’s strategic plan, a third flow path may occur through
tation initiatives. Modifications will be required and fed back through the
SECTION I.G. - FOCUS ON CONTINUOUS IMPROVEMENT
strategic planning process.
This occurs when the results of lean implementation directly impact the
When the Lean transformation process becomes recognized as a keystone
state of being Lean. The organization will learn from various implemen-
part of the Enterprise’s culture can the organization achieve a significant
called for, the flow will proceed along a second path, to the segment
This “oversight” segment is critically important for long-term effectiveness
Focus On Continuous Improvement
LEAN PRACTICES
❑C ❑D
Systematic, structured
methodology for continuous
improvement and value
creation is developed and
deployed across many
areas.
Level 3
Page 59 of 166
❑C ❑D
extended enterprise.
Structured continuous
improvement process is fully
ingrained throughout the
Level 5
SECTION I.G. - FOCUS ON CONTINUOUS IMPROVEMENT
• Lean principles are being applied to most enterprise systems and processes, utilizing lessons learned.
• The continuous improvement process challenges people to tackle the root cause, rather than the symptom.
❑C ❑D
Structured continuous
improvement process is
deployed at all levels across
the enterprise, using value
analysis to target
improvements.
Level 4
• A consistent improvement/transformation approach is implemented, sustaining improvements gained.
❑C ❑D
An improvement process for
the enterprise is broadly
defined and being selectively applied.
Improvement initiatives are
ad hoc and not data driven.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
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All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
we get better
Uniformity in how
I.G.1. Structured
Continuous
Improvement
Processes
LP#
• Are lean implementation results impacting strategic planning?
• Are lessons learned being captured in a consistent, systematic manner?
• Is appropriate support and encouragement being provided to all participants in lean implementation?
• Are senior managers actively involved in monitoring progress of lean implementation at all levels?
• Are enterprise participants being challenged to build-on and sustain existing improvements?
• Are guidelines for continuous improvement sufficiently developed for effective facilitation of enterprise-wide transformation plans?
Diagnostic Questions
lessons learned are captured, and improved performance becomes a strong driving force for future strategic planning by enterprise executives.
Successful execution of lean implementation plan forms the basis for further improvement. The improvement process is monitored and nurtured,
I.G. Focus on Continuous Improvement
LEAN PRACTICES
LEAN PRACTICES
Page 60 of 166
❑C ❑D
strategic objectives.
Results of implementation
projects are aggregated to
permit reallocation of
resources and to ensure
on-going alignment with
Level 4
❑C ❑D
Managers seek to identify
and remove barriers to lean
implementation. Teams and
individuals who successfully
implement lean practices are
recognized and rewarded.
Level 3
❑C ❑D
Senior managers across the
entire enterprise are highly
visible in their involvement,
support and encouragement
of the lean initiative. An
enthusiastic atmosphere is
evident.
Level 4
• Positive actions and the effort taken are recognized and rewarded, even if improvements are not fully successful.
• Management actively supports and is involved in ensuring the success of improvements.
❑C ❑D
Some senior managers are
providing encouragement,
support and recognition,
which is not consistent
across the enterprise.
There is growing awareness
that successful lean implementation is highly dependent upon senior management support and encouragement.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
• Lean progress reviews are documented in a common format and disseminated.
SECTION I.G. - FOCUS ON CONTINUOUS IMPROVEMENT
❑C ❑D
the extended enterprise.
Senior executives and
managers champion and
nurture a culture of
continuous improvement in
Level 5
❑C ❑D
Senior managers monitor
lean progress throughout
the extended enterprise.
Results are impacting
future enterprise strategic
planning.
Level 5
• Leaders actively participate in monitoring implementation progress and addressing deficiencies within the transformation plan.
• Lean transformation progress is judged by the aggregate benefits, not individual or localized improvements.
❑C ❑D
A formal methodology is used
by enterprise leaders to analyze the overall progress
across all lean implementation
projects. Current plans are
adjusted based on learning
from lean implementations.
Implementation plan
progress is reviewed against
enterprise level milestones
and success criteria, for
some projects.
Enterprise leaders are not
actively involved in the
review of overall lean
implementation plan
progress.
❑C ❑D
Level 3
Level 2
Level 1
❑C ❑D
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
involvement
Assure executive level
I.G.3. Nurturing the
Process
LP#
Opportunities
Evidence
Lean Indicators
(Examples)
prise objectives
toward achieving enter-
Assessing progress
I.G.2. Monitoring Lean
Progress
LP#
LEAN PRACTICES
LEAN PRACTICES
Lessons learned from
improvement activities are
not documented, residing
only in the memories of
participants.
❑C ❑D
❑C ❑D
A formal process for readily
capturing and communicating lessons learned is being
applied. Employee
contributions are actively
sought.
Level 3
Page 61 of 166
❑C ❑D
Forecasted improvements
from lean implementation
are incorporated into enterprise planning and budgeting decisions.
Level 4
SECTION I.G. - FOCUS ON CONTINUOUS IMPROVEMENT
❑C ❑D
potential market impact.
Executive management
integrates forecasted future
results of lean implementation in its assessment of new
business opportunities and
Level 5
❑C ❑D
lation of new lean initiatives.
A formal knowledge
management process is
adopted. Lessons learned
are routinely and explicitly
incorporated into the formu-
Level 5
• Gains realized from lean implementation are leveraged to achieve growth, profitability, market position and employment stability.
• Strategic planning makes allowance for anticipated gains from lean improvements.
❑C ❑D
Executive management
considers potential impact of
performance improvement
initiatives in its assessment
of new business
opportunities.
Level 3
• Business results reflect improvements resulting from lean implementation.
❑C ❑D
Benefits of lean
implementation are
beginning to influence the
strategic planning process.
Results of lean
implementation are not fed
back to strategic planning
process.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
• Lessons learned are periodically reviewed to maintain relevance of information kept.
• A formal process has been established throughout the enterprise for capturing and reusing lessons learned.
❑C ❑D
Lessons learned are
consistently captured,
communicated and regularly
used in a structured manner.
An enterprise knowledge
base is created.
Level 4
• “Best” practice, suggestions and lessons learned are maintained in a concise and clear standard format.
Lessons learned in some
areas are documented and
maintained in paper files,
design rulebooks, etc.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
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All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
opportunities
Results lead to strategic
I.G.5. Impacting
Enterprise Strategic
Planning
LP#
Opportunities
Evidence
Lean Indicators
(Examples)
lead to more successes
Ensuring that successes
I.G.4. Capturing Lessons
Learned
LP#
Distribute and Service Product
II.F.
Page 62 of 166
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Produce Product
II.E.
II.D. Manage Supply Chain
II.C. Develop Product and Process
II.B. Requirements Definition
II.A. Business Acquisition and Program Management
Section II: Life Cycle Processes
LESAT Maturity Matrices
SECTION II - LIFE CYCLE PROCESSES
wasted resources and reduced value to customers and stakeholders. This
section of the LESAT addresses the level of lean implementation applicable
to these Life Cycle processes.
above, these processes directly determine the value provided to customers
and stakeholders alike. The degree to which an enterprise is successful in
making these processes lean is a measure of its effectiveness and efficien-
Page 63 of 166
SECTION II - LIFE CYCLE PROCESSES
down the barriers among and within Life Cycle processes that result in
ception through operational support and ultimate disposal. As shown
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cy. Enterprise Leadership provides the direction and resources to break
Section III
Enabling Infrastructure
Life Cycle Processes are defined by the product life cycle, from initial con-
Distribute and Service Product
Produce Product
Manage Supply Chain
Develop Product and Process
Requirements Definition
Business Acquisition and
Program Management
Section II
Life Cycle Processes
Section I
Lean Transformation/ Leadership
LEAN PRACTICES
❑C ❑D
Improvement gains provide
resources to facilitate future
improvements. Potential
business opportunities from
applying lean thinking
across core competences
are recognized and plans
have been developed.
Business improvement
initiatives are ad hoc and
are focused on operational
efficiency.
❑C ❑D
Benefits sustained from
applying lean thinking within the enterprise are used to
retain current business
and/or win new business.
Level 3
Page 64 of 166
❑C ❑D
There is full use of the
enhanced capabilities and
customer knowledge
throughout the enterprise to
leverage opportunities for
competitive advantage.
Level 4
❑C ❑D
opportunities.
The strategic plan dynamically incorporates extended
enterprise capabilities and
stakeholder interests to
identify and leverage
Level 5
SECTION II.A. - BUSINESS ACQUISITION AND PROGRAM MANAGEMENT
• A process is used to scan the competitive environment to exploit opportunities arising from the enhanced capabilities of the lean enterprise.
• The ability to improve and refine processes quickly is used extensively to respond to changing customer requirements.
• Reduced cost, increased quality and faster response times from waste eliminated are used to maintain or win new business.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
lean enabled capabilities
opportunities arising from
Exploiting new business
II.A.1 Leverage Lean
Capability for
Business Growth
LP#
• Are skills and resources drawn from across the extended enterprise to enhance program development efforts?
• Are program risks and resource requirements balanced to assure optimal flow throughout the product life cycle?
• Are assets allocated across the value stream in a consistent and balanced manner?
• Does customer feedback and usage data drive new business process development?
• Are new business opportunities arising from lean enabled capabilities being fully exploited?
Diagnostic Questions
To be successful in the globally competitive environment of the twenty-first century, enterprises must develop and manage partnerships with their
customers and be able to dynamically re-configure and align core competencies among suppliers, the enterprise and its partners in order to deliver
best life cycle value to customers.
II.A. Business Acquisition and Program Management
Definition: Implement lean practices across life-cycle processes for defining customer requirements, designing products and processes, managing supply chains,
producing the product, distributing product and services, and providing post delivery support.
LIFE-CYCLE PROCESSES
LEAN PRACTICES
LEAN PRACTICES
❑C ❑D
Program reviews assess risk
within individual programs
and staffing is adjusted as
necessary to mitigate risk.
Level 3
• A risk management process is fully integrated across the enterprise.
• Programs and process reviews have a portfolio approach to achieve enterprise balance.
❑C ❑D
There is a management
system to monitor and
control program performance and staffing. Regular
reviews focus on cost,
schedule and performance
of individual programs.
Programs are managed and
staffed as independent
entities.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
Page 65 of 166
❑C ❑D
portfolio of programs.
Risk abatement processes
are used to optimize
performance of the
Level 5
❑C ❑D
SECTION II.A. - BUSINESS ACQUISITION AND PROGRAM MANAGEMENT
❑C ❑D
The programs are reviewed
assessing the risk across the
portfolio of programs with
appropriate reallocation of
resources.
Level 4
• Available assets and resources are coordinated throughout the enterprise to leverage resources to the maximum.
• Workforce and its knowledge is nurtured, reallocated and maintained where possible.
❑C ❑D
The ability exists to easily
and quickly shift or divest
resources to new
opportunities.
As a result of the application of lean concepts and
techniques, assets are freed
up to be applied across the
enterprise to support current
or growth activities.
An enterprise approach
provides consistent and
balanced asset allocation
across the value stream.
❑C ❑D
Level 5
Level 4
Level 3
• Assets freed up from lean implementation are readily redeployed.
❑C ❑D
There is evidence of ad hoc
cooperation between
functional units to eliminate
waste and share resources.
❑C ❑D
Level 2
Level 1
Utilization of people and
material assets is optimized
within functional units.
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
risk management
Success follows effective
II.A.3. Provide Capability
to Manage Risk,
Cost, Schedule and
Performance
LP#
Opportunities
Evidence
Lean Indicators
(Examples)
redeployment of assets
growth through the
Lean enables business
II.A.2. Optimize the
Capability and
Utilization of
Assets (People,
equipment, facilities, etc.)
LP#
LEAN PRACTICES
❑C ❑D
Program development
efforts rely on functional
units for allocation of the
required skills.
Level 3
❑C ❑D
Some of the skilled
resources are routinely
shared across programs.
Formal methods are being
developed for determining
team makeup and assignment of necessary skills.
Level 4
Page 66 of 166
effort(s).
SECTION II.A. - BUSINESS ACQUISITION AND PROGRAM MANAGEMENT
❑C ❑D
“Virtual organizations” are
created as needed from the
extended enterprise and
provided with the skills and
resources necessary to
execute the development
Level 5
• Resources and skills are easily and quickly shifted or divested to balance requirements across all program development efforts.
❑C ❑D
Resources and skills are
routinely balanced and
shared across the portfolio
of programs.
• A process is defined and used to ensure that cross-disciplinary skills are represented on teams.
❑C ❑D
Level 2
Some but not all skills /
resources necessary are
dedicated and assigned to
program development.
Skilled resources are
narrowly guarded within
programs.
Level 1
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
Teaming for success
II.A.4 Allocate Resources
for Program
Development
Efforts
LP#
LEAN PRACTICES
❑C ❑D
Requirements definition
process leverages value
chain capabilities and focuses on overall life cycle implications.
Level 3
Page 67 of 166
❑C ❑D
An iterative requirements
definition process spans
the value chain resulting in
a minimal set of requirements that balances cost
and performance.
Level 4
• Structured methods are used to elicit and gather needs from the different stakeholders/customers.
• The process ensures a balanced representation from all disciplines across the value chain.
❑C ❑D
business opportunities.
The requirements process
is a strategic advantage for
the extended enterprise
contributing to increased
responsiveness and new
Level 5
SECTION II.B. - REQUIREMENTS DEFINITION
• There is a process in place to determine clear and concise product and life cycle requirements, with acceptable ranges.
❑C ❑D
Requirements definition
process, which balances
cost, schedule and performance, is partially developed,
deployed and documented.
❑C ❑D
Level 2
Level 1
Requirements are defined
internally based on past
experience, rather than on
a formal requirements
definition process.
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
technology/product push
Stakeholder pull vs.
II.B.1. Establish a
Requirement
Definition Process
to Optimize
Lifecycle Value
LP#
• Are product and process capability data matched to design criteria?
• Is product life-cycle data used in determining requirements and subsequent specifications?
• Is a data collection and customer feedback process defined and deployed?
• Are the customer’s needs continually evaluated in determining product and process requirements?
Diagnostic Questions
Customer needs and values must be assessed continuously and translated into requirement statements that form the basis for product and process design.
II.B. Requirements Definition
LEAN PRACTICES
❑C ❑D
❑C ❑D
Data are collected on
usage, maintenance, disposal and future needs from
across the present value
chain and fed into future
design solutions and
requirement definitions.
Level 3
Page 68 of 166
SECTION II.B. - REQUIREMENTS DEFINITION
• Enhanced knowledge of customer and stakeholder requirements and desires is used to leverage future requirements.
❑C ❑D
requirements.
The process is established
across the extended
enterprise to actively seek
data on needs, usage and
process capability to populate a data repository that
can be mined for future
Level 5
• A database of usage, maintenance and disposal data is maintained and extensively used to establish future requirements definitions.
❑C ❑D
Process allows real-time
access, collection and
dissemination of data
from across the extended
enterprise for analysis by
stakeholders for future use.
Level 4
• Customer feedback is actively sought and provided as input to the requirements definition process.
❑C ❑D
Level 2
A proactive process is being
developed to collect product
usage data as the basis for
future requirements.
Level 1
Warranty claims and
deficiency reports represent
the primary source of data
that is collected and analyzed for impacts to present
requirements.
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
data
operational performance
are in place to capture
Closed loop processes
II.B.2. Utilize Data from
the Extended
Enterprise to
Optimize Future
Requirement
Definitions
LP#
LEAN PRACTICES
❑C ❑D
The customer(s) are formally
represented on Integrated
Product Teams (IPT) and
feedback mechanisms exist
to facilitate timely design
iterations.
Level 3
• Designs satisfy customer value requirements, without unnecessary functionality.
• Customer inputs are sought and used actively throughout the development process.
❑C ❑D
Customer inputs are
considered qualitatively
through top-level liaison
and occasional reviews.
Customer inputs are
captured only at the
beginning of the
development.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
Page 69 of 166
❑C ❑D
The customer(s) are routinely
involved with IPT with effective,
continuous communication.
Sharing of benefits is well
established; value quantification and tradeoffs are a continuous and automatic part of
the process.
Level 5
SECTION 11.C. - DEVELOP PRODUCT AND PROCESS
❑C ❑D
The customer(s) are actively
involved with the IPT at
multiple levels to jointly
improve the effectiveness
and quality of the product
and process design.
Level 4
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
and process
improvement of product
value allows continuous
Understanding customer
II.C.1. Incorporate
Customer Value
into Design of
Products and
Processes
LP#
• Are products and processes being developed concurrently?
• Has the development cycle been simplified and aligned to the critical path?
• Have most of the unnecessary iterations in the development cycle been removed?
• Are downstream stakeholder issues in design and development considered and incorporated as early as possible in the process?
• Are customers and other lifecycle stakeholders regularly involved in product and process development?
• Is the product development process formalized and understood?
Diagnostic Questions
Product and process design decisions must be based upon value quantifications and tradeoffs that incorporate inputs from affected stakeholders.
II.C. Develop Product and Process
LEAN PRACTICES
LEAN PRACTICES
Manufacturing issues are
considered late in design.
❑C ❑D
❑C ❑D
Multi-functional teams
include some downstream
disciplines and key
suppliers.
Level 3
Page 70 of 166
❑C ❑D
Priorities of downstream
stakeholders are quantified
as early as possible in
design, and used for
process evaluation and
improvement.
Level 4
process.
❑C ❑D
Downstream stakeholders’
values in the extended
enterprise are quantified,
and balanced via tradeoffs,
as a continuous part of the
Level 5
❑C ❑D
Multidisciplinary development is used extensively;
metrics are established for
process evaluation.
Level 3
CAPABILITY LEVELS
❑C ❑D
Multidisciplinary techniques
are deployed for most
programs/product
development efforts;
metrics are used for process
evaluation and improvement.
Level 4
• Suitability and timing of design information released, is matched to the requirements of subsequent processes.
• Resources and skills are balanced across projects and programs, to aid maximum re-use and sharing of knowledge.
❑C ❑D
Multidisciplinary development is used to a limited
extent.
Development is performed
in functional organizations.
❑C ❑D
Level 2
Level 1
• Products are easier to produce and have lower life-cycle costs.
SECTION 11.C. - DEVELOP PRODUCT AND PROCESS
❑C ❑D
Product and process
definition is seamlessly
integrated both internally
and with the upstream and
downstream stakeholders.
Level 5
• The scope of considerations integrated into designs has been extended to include manufacturing, assembly, serviceability and cost implications.
• There is early consideration and incorporation of downstream stakeholders issues throughout design development.
Manufacturing and assembly issues are considered
earlier in projects, but in an
ad hoc manner. Supplier
and cost considerations are
limited.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
value flow
less communication and
tional silos enables seam-
Breaking down of func-
II.C.3 Integrate Product
and Process
Development
LP#
Opportunities
Evidence
Lean Indicators
(Examples)
flow seamlessly to customer
stakeholders allows value to
Understanding downstream
II.C.2 Incorporate
Downstream
Stakeholder Values
(Manufacturing,
Support, etc.) into
Products and
Processes
LP#
LEAN PRACTICES
❑C ❑D
Supplier network is defined
based on strategic analysis
of value creation processes
internally and across
suppliers.
Level 3
Page 71 of 166
❑C ❑D
Strategic outsourcing and
make-buy decisions focus
on achieving an optimal
combination of core
competencies both within
the enterprise and across
the supplier network.
Level 4
❑C ❑D
entire product lifecycle.
Supplier network is defined,
developed and integrated
to ensure efficient creation
of value for enterprise
stakeholders over the
Level 5
SECTION II.D. - MANAGE SUPPLY CHAIN
• Supplier network is flexible and can quickly adapt to changing requirements and unanticipated disruptions.
• Supplier expertise and capabilities complement enterprise core competencies; unnecessary overlap and duplication has been removed.
• The supplier network is defined and developed in line with the strategic plan to ensure efficient creation of value for all enterprise stakeholders.
❑C ❑D
The supplier base has been
rationalized to focus on key
suppliers with high impact
on strategic objectives.
Large number of direct
suppliers in an hierarchical
structure. There is little
evidence of a defined supplier strategy and limited
knowledge of the
relationships within the
supplier network.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
network
aligned across supplier
Core competencies
II.D.1 Define and
Develop Supplier
Network
LP#
• Are supplier partnerships and strategic alliances established to strengthen dynamic competitive advantage?
• Are constraints and bottlenecks throughout the extended enterprise identified and rapidly resolved to ensure continuous flow?
• Have opportunities for supply chain development been fully exploited?
• Are in-house capabilities balanced with supplier capabilities to optimize network-wide performance?
• Do contractual arrangements enable supplier flexibility and adaptation to both expected and unexpected changes?
• Have the number of suppliers been reduced to a level that can be effectively managed?
Diagnostic Questions
extended enterprise.
Internal enterprise core competencies are aligned with those of suppliers such that the customer value chain is optimized throughout the
II.D. Manage Supply Chain
LEAN PRACTICES
LEAN PRACTICES
Page 72 of 166
❑C ❑D
Strategic alliances with key
suppliers emphasize a high
degree of information- sharing, risk-sharing & benefit
sharing. For others a differentiated set of strategies and
practices are in place.
Production and delivery
are synchronized across the
supplier network.
Level 4
❑C ❑D
Technology roadmaps
include suppliers in pursuance of common strategic
vision. Shared metrics for
continuous improvement are
utilized.
Level 3
SECTION II.D. - MANAGE SUPPLY CHAIN
❑C ❑D
Mutually-beneficial arrangements are established to foster innovation across suppliers. A process for on-going
communication of needed
changes in vision, strategy,
metrics and implementation
is in place.
Level 5
❑C ❑D
Supplier capabilities are
dynamically optimized to
ensure efficient value
creation and building
durable competitive
advantage, creating
flexibility and responsiveness to shifts in the marketplace.
Level 5
• A mutually beneficial continuous improvement process is established throughout the supplier network over the entire product lifecycle.
❑C ❑D
Knowledge transfer mechanism is created for open
and rapid access throughout
the supplier network.
Level 4
• Processes to facilitate sharing and transfer of innovation, knowledge and technology are deployed.
• Long-term collaborative relationships are established and maintained where possible.
❑C ❑D
Internal organizational
structures and processes are
established to leverage supplier-based knowledge and
innovation.
Primary focus on internal
capabilities, with little cognizance of tacit (experience-based) or explicit
(formal) knowledge across
suppliers.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
• Production and delivery are synchronized throughout the supplier base to ensure continuous flow, with minimal waste.
• Roles and responsibilities are clearly defined in contractual relationships, and risk and reward shares agreed upon.
❑C ❑D
Common objectives, roles
and responsibilities are
established and communicated, with a few supplier
partnerships or strategic
alliances in place. Early
involvement of key
suppliers in design and
development.
Level 3
• Formal processes are in place for supplier assessment and approval.
❑C ❑D
Formal processes are in
place for supplier assessment and approval. Longterm purchase agreements
focus on cost reduction.
Limited visibility into supplier
business processes.
Supplier relationships are at
arm’s length and adversarial.
Purchasing department
manages a large number of
short-term, lowest-bid
contracts.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
technology transfer
Incentivizing innovation &
II.D.3. Foster Innovation
and KnowledgeSharing
Throughout the
Supplier Network
LP#
Opportunities
Evidence
Lean Indicators
(Examples)
tomer value
processes to achieve cus-
ers and optimizing
Partnering with key suppli-
II.D.2. Optimize NetworkWide Performance
LP#
LEAN PRACTICES
❑C ❑D
Production capabilities are
understood and utilized
across the enterprise.
Enterprise strategy and
manufacturing capabilities
are aligned.
Level 3
Page 73 of 166
❑C ❑D
• Knowledge of production capabilities are maintained and shared throughout the extended enterprise.
creation.
❑C ❑D
Production knowledge is
leveraged across the
extended enterprise to
generate strategic
opportunities for value
Level 5
SECTION II.E. - PRODUCE PRODUCT
Manufacturing system
design is integrated with
strategic make/buy decisions across the enterprise
and aligned with enterprise
strategy to create competitive advantage.
Level 4
• Production capability constitutes a major consideration in enterprise level long-range, strategic planning.
❑C ❑D
Production knowledge and
capabilities are captured
and used to influence
manufacturing strategy
including make/buy
decisions.
Production capability is not
understood outside the
manufacturing organization.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
manufacturing capability
Strategic leveraging of
II.E.1 Utilize Production
Knowledge and
Capabilities for
Competitive
Advantage
LP#
• Are inventories maintained at minimal levels throughout the production process?
• Have the production processes been ordered and adapted for flow?
• Are products pulled in accordance with customer demand in real-time?
• Has enterprise strategy been aligned with manufacturing capability?
• Is production knowledge and capability regarded as a strategic competitive advantage?
Diagnostic Questions
The production system must be designed and managed according to the principles and practices of the lean production paradigm.
II.E. Produce Product
LEAN PRACTICES
Production system operates
on a batch and queue
schedule with high inprocess inventory, with
quality based on inspection
rather than prevention.
❑C ❑D
❑C ❑D
Product flow paths are
identified and key elements
of the layout have been
reordered enhancing flow
and reducing in-process
inventory, with some
suppliers delivering to point
of use where appropriate.
Level 3
• Work is performed only when “pulled” from subsequent “customers” in the value chain.
• Inventory levels have been reduced in line with gains made to process stability and variation reductions.
Page 74 of 166
suppliers.
❑C ❑D
Work is segmented and
organized along the value
stream flows to achieve
defect free production upon
demand through the
implementation of pull from
customer through material
Level 5
SECTION II.E. - PRODUCE PRODUCT
❑C ❑D
Selected products are
produced using a flow system pulled directly by customer demand (take time),
which includes key suppliers.
Level 4
• Conversion to lean has freed up floor space, equipment, human resources and capital for re-deployment.
Production system operates
with a batch and queue
schedule with limited cellular
or in-line layouts to improve
flow.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
pulled by the customer
Defect free production
II.E.2. Establish and
Maintain a Lean
Production System
LP#
LEAN PRACTICES
Marketing pushes product
sales/bids with little
consideration of current
production capacity.
❑C ❑D
❑C ❑D
Products are supplied in
smaller more frequent
batches, balancing orders to
current production capacity.
Most running orders are
fully visible to production.
Level 3
Page 75 of 166
❑C ❑D
Matching real-time customer
demand and delivery
requirements with
production capabilities,
using extensive knowledge
base of customer preferences.
Level 4
• Sales / bids commit product delivery to real-time customer demand, without the use of buffer stocks.
• There is constant feedback and input between sales/marketing and production elements across the enterprise.
• Sales / bids are aligned to current and future production capacity and capabilities.
Marketing provides
production with partial
visibility to current and
future potential order base.
Order base not aligned to
production capacity.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
enterprise.
❑C ❑D
Actual and future
prospective orders are
matched in real-time with
production capabilities
throughout the extended
Level 5
SECTION 11.F. - DISTRIBUTE AND SERVICE PRODUCT
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
and capabilities
Matching demand
II.F.1. Align Sales and
Marketing to
Production
LP#
• Are customer rejects/returns treated as opportunities?
• Are in-service usage data deployed to appropriate personnel?
• Does the organization satisfy customer maintenance requirements effectively?
• Are product delivery data flowed throughout the value chain?
• Are production schedules and capacity considered prior to making a sales/contract commitment?
Diagnostic Questions
On-time deliveries of defect free products are complemented by superior post delivery service, support and sustainability.
II.F. Distribute and Service Product
LEAN PRACTICES
LEAN PRACTICES
Distribute from inventories
by batch; customer inspects
products upon receipt.
❑C ❑D
❑C ❑D
Product distribution from low
stock levels is triggered by
an internal pull system;
some products are delivered
directly to point of use with
limited inspection.
Level 3
❑C ❑D
Support system flow paths
are identified and are
beginning to be integrated
with lean product
development and
production flows.
Level 3
CAPABILITY LEVELS
Page 76 of 166
❑C ❑D
Standardized customer and
product support processes
provide responsive
information and product
flow fully integrated with
development and production
flows.
Level 4
• Disruptions to design and production flow from support services has been minimized.
• Customer and product support processes have been standardized and are regularly reviewed against customer feedback.
• Solutions to product / service issues are coordinated throughout the extended enterprise to find fast, cost effective solutions.
❑C ❑D
Support system delivers
products / services on time,
but with disruptions to
production flow and
associated resources.
Product support system
reacts to customer needs,
usually on-time and from
inventory.
❑C ❑D
Level 2
Level 1
• Delivery cycle is shorter and more reliable.
• Deliveries are synchronized to minimize goods in transit and transportation requirements.
❑C ❑D
Defect free items are
produced and delivered
without receipt inspection
to real-time customer usage;
customers are given access
to databases for order status
visibility.
Level 4
• Point of use delivery to customers with minimal receipt inspection has become standard practice.
Distribute in smaller batch
sizes more frequently in line
with increased reliability.
There are programs in place
to reduce customer receipt
inspection.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
provided.
❑C ❑D
Customer needs for postdelivery products / services
are anticipated in enterprise
plans and fulfilled by adaptation and extension of
capabilities already
Level 5
❑C ❑D
through material suppliers.
Defect free distribution on
demand is achieved via the
implementation of customer
pull from end customer
Level 5
SECTION 11.F. - DISTRIBUTE AND SERVICE PRODUCT
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
of the customer
Responding to the voice
II.F.3 Enhance Value of
Delivered Products
and Services to
Customers and the
Enterprise
LP#
Opportunities
Evidence
Lean Indicators
(Examples)
quantity at the right time
Right product, right
II.F.2. Distribute Product
in Lean Fashion
LP#
LEAN PRACTICES
❑C ❑D
❑C ❑D
The enterprise is increasingly involved in addressing
customer maintenance solutions. Spare levels are
reduced through common
platforms; root cause analyses are fed back into product design.
Level 3
Page 77 of 166
❑C ❑D
The enterprise is part of the
customer’s maintenance
solution by ensuring
availability through replacement of critical components
before failure.
Level 4
• Spares levels are reduced in line with short predicable lead times for replacement spares.
• Customer feedback is proactively maintained and used to predict any emerging service issues and enhance future designs.
Collection of data on failure
trends permits both
determination of service
interval points for
preventative maintenance
and a reduction of spare
part levels.
❑C ❑D
Level 2
Level 1
High level of spares
necessary because of
unknown failure rates and
long lead times for spare
replenishment.
CAPABILITY LEVELS
❑C ❑D
product performance.
The enterprise has become
part of customer’s business
solution via warranting of
Level 5
SECTION 11.F. - DISTRIBUTE AND SERVICE PRODUCT
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
solutions
Providing customer
II.F.3 Provide Post
Delivery Service,
Support and
Sustainability
LP#
Page 78 of 166
III.B. Lean Process Enablers
III.A. Lean Organizational Enablers
Section III: Enabling Infrastructure
LESAT Maturity Matrices
SECTION III - ENABLING INFRASTRUCTURE
a manner hidden from view. This section of the LESAT addresses the level
of lean implementation applicable to the Enabling Infrastructure.
aging the resources to the organizations they serve as internal customers.
Since they enable rather than directly result in enterprise success, they can
Page 79 of 166
SECTION III - ENABLING INFRASTRUCTURE
ent in these processes can negatively impact the enterprise as a whole in
life cycle processes. These enabling processes provide the means for man-
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
be easily overlooked as a source of waste. However, waste that is inher-
Lean Process Enablers
Lean Organizational Enablers
Section III
Enabling
Infrastructure
Enabling Infrastructure supports the execution of enterprise leadership and
Section II
Life Cycle Processes
Section I
Lean Transformation/ Leadership
LEAN PRACTICES
❑C ❑D
❑C ❑D
Finance system is overhauled to provide data and
financial information to support and enable a lean
transformation at any level.
Level 3
Page 80 of 166
❑C ❑D
Financial system scope is
expanded to integrate with
non-traditional measures of
value creation (e.g.,
intellectual capital,
balanced scorecard, etc.).
Level 4
• The financial system has been overhauled to ensure fast and efficient processing of information as required.
• The financial system handles a balanced set of financial and non-financial measures to assist decision-making.
• Financial measures that conflict with lean activity are no longer used to measure progress and performance.
Initial efforts are underway
to adapt or modify systems
to compensate for the
inadequacies of the formal
financial system.
❑C ❑D
Level 2
Level 1
Finance system provides
basic balance sheet and
cost accounting data; there
is little awareness and
exploration of broader
support roles for finance.
CAPABILITY LEVELS
❑C ❑D
for all stakeholders.
Financial systems provide
seamless information
exchange across the
extended enterprise, with
emphasis on value creation
Level 5
SECTION III. A. - LEAN ORGANIZATIONAL ENABLERS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
financial data
Lean requires appropriate
III.A.1. Financial System
Supports Lean
Transformation
LP#
• Do processes create the least amount of environmental hazards practical?
• Are the information technology systems compatible with stakeholder communications and analysis needs?
• Are human resource practices reviewed to assure that intellectual capital matches process needs?
• Can stakeholders retrieve financial information as required?
• How well have the financial and accounting systems been integrated with non-financial measures of value creation?
• Do the finance and accounting measures support the implementation of lean?
Diagnostic Questions
that they support lean implementation within the life cycle processes and the lean transformation/leadership processes.
The support units of an enterprise must themselves become lean in executing their assigned function, but they must also redefine what they do such
III.A. Lean Organizational Enablers
Definition: To achieve a successful lean transformation, the enterprise infrastructure must support the implementation of lean principles, practices and behavior.
Section III - Enabling Infrastructure
LEAN PRACTICES
LEAN PRACTICES
Lagging financial information is reported through
regularly scheduled standardized reports. Specific
requests for measures
require extraordinary effort.
❑C ❑D
❑C ❑D
Users are able to directly
access and use financial
information to make tradeoff decisions.
Level 3
The human resources
processes concentrate on
recruiting, placement and
benefits. Personnel training
is ad hoc and not aligned
to organizational needs.
❑C ❑D
❑C ❑D
Personnel development
process is extended to all
employees and incorporates
the anticipated future needs
of the lean enterprise.
Resources and facilities are
dedicated for learning.
Level 3
Page 81 of 166
❑C ❑D
A learning climate is
promoted within the
enterprise through ready
access to information and
input to strategy/ policy
making. Opportunities
for extending learning
experiences are provided.
Level 4
• Employees actively capture and incorporate lessons learned into future training and practices.
❑C ❑D
practice.
❑C ❑D
A learning climate is
promoted throughout the
extended enterprise by
the sharing of capabilities,
knowledge, skills and best
Level 5
results.
Users across the extended
enterprise generate and
share timely financial and
performance data. Data
reflects extended enterprise
Level 5
SECTION III. A. - LEAN ORGANIZATIONAL ENABLERS
• Employees have individual training plans, which are aligned to the current and projected skill base requirements.
• Intellectual capital is regarded as a corporate asset.
A well-defined personnel
development process,
aligned with organizational
needs, is applied for selected employees.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
• System provides up to date information on request and rationalizes information no longer used.
• Financial information can be extrapolated to forecast outcomes.
❑C ❑D
Users are able to pull
financial and other value
creation information to
support decision analysis
in the format desired.
Level 4
• Financial and performance measurement data can be accessed as needed in user-defined format.
Finance actively provides
traditional financial
information to assist users
in planning and programming activities.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
force
create a flexible work-
Learning Organizations
III.A.3. Promulgate the
Learning
Organization
LP#
Opportunities
Evidence
Lean Indicators
(Examples)
Data on demand
III.A.2. Enterprise
Stakeholders Pull
Required Financial
Information
LP#
LEAN PRACTICES
LEAN PRACTICES
❑C ❑D
Elements of a common
information infrastructure
have been determined, and
an implementation plan is
under development.
Maintenance of legacy systems consume most IT
resources.
The information
infrastructure consists mainly
of stand-alone systems. The
need for systems integration
is recognized but no
improvement plan exists.
❑C ❑D
The information
infrastructure has been
formalized and is in use in
selected locations. Legacy
systems are rationalized and
aligned across the value
stream.
Level 3
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❑C ❑D
An information infrastructure is deployed that supports seamless information
exchange across the
enterprise.
Level 4
❑C ❑D
A process is in place to
proactively identify
Environmental protection,
Health and Safety (EHS)
risks and manage them
appropriately, with a preference for source prevention.
Forward thinking solutions
Level 3
❑C ❑D
to potential life cycle EHS
risks are implemented early
in product (service) design
and throughout the value
stream.
Level 4
❑C ❑D
petitive advantage.
EHS risk prevention and
mitigation is part of the
natural way business is
conducted across the
extended enterprise, creating a sustainable environment and creating a com-
Level 5
❑C ❑D
Information systems are fully
interoperable and the
pertinent information is
easily accessible and usable
across the extended
enterprise.
Level 5
• Designs meet current environmental regulations and are capable of easy adaptation to meet projected changes over the life cycle of the product.
• Processes and designs are proactively adapted to minimize environmental, health and safety issues at source.
• Health and safety issues are routinely addressed in employee driven improvement activities.
❑C ❑D
Consideration is given to
means of mitigating
conditions that cause
environmental, health
and safety issues.
The enterprise complies with
all known legal and regulatory requirements and reacts
if issues are identified.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
• Information systems and tools complement lean processes and practices and are easily adapted to accommodate change.
• Information systems facilitate fast and effective transfer and retrieval of information required.
• Compatible information systems and tools exist across the extended enterprise.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
SECTION III. A. - LEAN ORGANIZATIONAL ENABLERS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
“Cleaner, healthier, safer”
III.A.5. Integration of
Environmental
Protection, Health
and Safety into the
Business
LP#
Opportunities
Evidence
Lean Indicators
(Examples)
edge
information and knowl-
Facilitate the flow of
III.A.4. Enable the Lean
Enterprise with
Information
Systems and Tools
LP#
LEAN PRACTICES
❑C ❑D
Level 3
❑C ❑D
Selected processes are
standardized across the
enterprise.
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❑C ❑D
Process standardization and
reuse is consistently
employed across the
enterprise.
Level 4
• Processes are standardized where applicable throughout the extended enterprise.
• Process improvements are documented in a concise and easy to use standard format and transferred.
SECTION III.B. - LEAN PROCESS ENABLERS
❑C ❑D
been standardized.
Extended enterprise
interface processes have
Level 5
• The workforce plays a significant role in devising standard processes and practices, which are adhered to and periodically updated.
❑C ❑D
Level 2
Key processes in the
organization have been
identified that could benefit
from standardization, with
initial efforts underway.
Level 1
Processes vary by program
or product line.
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
and re-use
Strive for consistency
III.B.1. Process
Standardization
LP#
• Is process variation continually reviewed and reduced in all processes throughout the enterprise?
• Are common tools and systems used throughout the enterprise?
• Has process standardization and reuse been imbedded in enterprise policies and procedures?
• Have the full benefits from process standardization been realized across the enterprise?
Diagnostic Questions
A number of enablers can facilitate lean implementation via consistent application throughout the enterprise.
III.B. Lean Process Enablers
LEAN PRACTICES
LEAN PRACTICES
Tools and systems vary by
program or work center.
❑C ❑D
❑C ❑D
Plans are in place for achieving common tools and systems and have been implemented to varying degrees
across the enterprise.
Level 3
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❑C ❑D
Common tools and systems
have been implemented
throughout the enterprise.
Level 4
❑C ❑D
There is evidence that
sources of variation are
being identified and analyzed. Initial efforts are
underway to reduce variability.
Level 2
❑C ❑D
A formal approach that
balances customer value
and variation reduction is
implemented in many parts
of the enterprise.
Level 3
❑C ❑D
Considerable benefits are
realized from reduced
variation in processes and
practices across the
enterprise.
Level 4
SECTION III.B. - LEAN PROCESS ENABLERS
• Variation reductions achieved enable short predicable lead times for information and material flow.
❑C ❑D
extended enterprise.
Benefits of reduced variation
are realized across the
Level 5
• High levels of process stability are maintained by utilizing mistake proofing and root cause identification techniques to the fullest.
• Process ownership and visual displays of process variation enable quick and easy identification of adverse trends.
❑C ❑D
There is limited use of
variation reduction tools
and methods. There is
some evidence of variation
understanding in parts of
the organization.
Level 1
CAPABILITY LEVELS
❑C ❑D
extended enterprise.
Compatibility of tools and
systems with those of
enterprise partners in the
Level 5
• Enterprise-wide use of common tools and systems provides enhanced compatibility between processes and aids employee transfer.
• Common tools and systems provide easy access and reuse of knowledge across the product life cycle.
• Policies have been established and deployed that require the use of common tools and systems throughout the enterprise.
Have identified high leverage opportunities for common tools and systems; initial deployment in a few
areas.
❑C ❑D
Level 2
Level 1
CAPABILITY LEVELS
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Opportunities
Evidence
Lean Indicators
(Examples)
reducing variation
Reduce uncertainty by
III.B.3. Variation Reduction
LP#
Opportunities
Evidence
Lean Indicators
(Examples)
reducing costs
Assuring compatibility,
III.B.2. Common Tools
and Systems
LP#
Appendix A – The “What and Why” of Lean
LEAN IS ABOUT BEHAVIOR
can improve whatever “flows” and whatever is “pro-
First and foremost, it is important to understand that
duced” in terms of cycle time, quality, and efficiency.
“Lean” is not merely a set of practices usually found
on the factory floor, but rather a fundamental change
Unfortunately, too many people have been introduced
in how the people within an organization think and
to a very narrow perspective of “Lean.” Often viewed
what they value, thus transforming how they behave.
as a collection of practices with names such as
Positive results are achieved from the supporting prac-
“Kaizen,” “poka-yoke,” and “kanban,” “Lean” has
tices that follow once a common set of beliefs and
also been relegated to being appropriate mainly “on
principles are understood and adopted.
the factory floor.” As a result, the true transformational power of adopting “Lean” has often been lost, with
A “Lean” organization understands and believes in
organizations desiring to improve realizing only a
the fundamental virtue of its basic Lean principles.
fraction of its potential.
Within that Lean organization, everyone is focused on
identifying and eliminating sources of waste and inef-
The true transformational power of Lean lies in its
ficiency. They look at the world through the eyes of
inherent ability to unlock the potential of the entire
their customer and seek to fulfill customer expecta-
organization: It can transform everyone and every-
tions. They value what the customer values. They
thing that an Enterprise does. In fact, when totally
anticipate change and learn how to be responsive to
adopted, Lean extends its transformational power
make change their ally. They understand the concept
both upstream to the supplier base as well as down-
of flow, the power of sharing information, and the
stream to customers!
criticality of relationships.
The following pages offer insights into the benefits and
Because Lean is about beliefs and behavior, it is appli-
characteristics of Lean, designed to help you understand
cable beyond the factory floor to encompass the entire
Lean more concretely. Above all, Lean is about how an
Enterprise. Its benefits pervade the organization.
organization thinks and behaves. This belief is what
Employees who adopt a focus on eliminating waste,
leads to applying the correct Lean practices and sus-
and who see the world through their customers’ eyes,
taining the dynamic, continuous improvement process.
BENEFITS OF LEAN
What benefits can a company expect to realize as it transitions from a mass-production mentality to one based on
Lean principles and practices? Benefits accrue both in factory operations and in areas beyond the production floor.
Companies that have attempted to convert their factory operations to Lean, without simultaneously adopting Lean
principles and practices throughout the entire organization, have not realized Lean’s full potential. In fact, many such
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companies have viewed their Lean transformation as a failure. Companies that have enjoyed the greatest success
in transitioning to Lean are those that take a holistic approach and view the transformation as a fundamental restructuring of the Enterprise, including its organizational structure, business and information systems, workforce policies,
incentive systems, and relationships with customers and suppliers.
Benefits in Factory Operations
Factories that convert to Lean production typically achieve the following results.
There is a dramatic improvement in responsiveness to customers. Shipments are rarely late; the number of
defects reaching customers drops significantly, and overall customer satisfaction is much greater — thereby
increasing market share.
Most of the factory-floor chaos is eliminated. Rather than aisles clogged with batch production orders waiting for processing at banks of identical machines grouped together, individual parts and assemblies move
smoothly within the Lean factory’s synchronized manufacturing cells, never stopping until processing and
inspection are completed. Production flow times are reduced by 80 percent to 90 percent. Workstations are
well organized and neat; no idle parts or carts clutter the workspace. No expeditors are needed to push
through late production orders by brute force. Storage racks for work-in-process are largely eliminated.
Material handling is simplified, often with manual methods replacing automation. Re-work stations are
gone. Scrap is significantly reduced, and the factory floor is much cleaner.
Labor productivity is double or triple that of the past.
Production control systems and their associated information systems are greatly simplified.
Shipments from certified suppliers arrive shortly before needed, are organized in the correct sequence, and
move directly to the point of use with no need for incoming inspection. Warehouse space for purchased
parts and materials is reduced by 80 percent to 90 percent in many cases.
Completed orders are shipped immediately to customers upon completion of the last stage in the internal
value chain, rather than accumulating in large warehouses. Orders are shipped to customers in small quantities (often single units) rather than in large lots.
The total floor space needed in Lean factories is typically 55 percent to 65 percent of that needed in massproduction factories for the same level of production.
Inventory levels at all stages (raw materials, in-process, and finished goods) are dramatically lower, often
by greater than 90 percent.
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Appendix A – The “What and Why” of Lean
Continued
To support these claims, the book Lean Thinking (Womack and Jones 1996, p. 27) reports the following improvements from converting to Lean:
INITIAL LEAN
CONTINUOUS
CONVERSION
IMPROVEMENT
LABOR PRODUCTIVITY
Double
Double again
PRODUCTION THROUGHPUT TIMES
90% reduction
50% reduction
INVENTORIES (THROUGHOUT)
90% reduction
50% reduction
ERRORS REACHING CUSTOMERS
50% reduction
50% reduction
SCRAP
50% reduction
50% reduction
TIME TO MARKET, NEW PRODUCT
50% reduction
50% reduction
Values in the “Initial Lean Conversion” column are the results that can be expected from the initial conversion effort.
Values in the “Continuous Improvement” column are the further improvements that can be expected from continuous improvement efforts within two to three years. Improvements can be expected to continue indefinitely, but at a
declining rate. (These values represent rough averages in the companies studied by Womack and Jones; they have
not been validated and are obviously not precise.)
Benefits Beyond Production Operations
We would be missing a great opportunity were we to confine our application of Lean principles and practices to
the factory floor. Lean thinking can and should be applied to all functions in the enterprise. Consider, for example,
the Lean principle of “one piece flow.” Here is how this principle should be implemented across several enterprise
functions.
PRODUCTION
Parts and assemblies never stop moving until order is shipped
PRODUCT DESIGN
Design never stops moving forward until it is in production
BUSINESS PROCESSES
Paperwork (or electronic equivalent) never stops moving until processing is
completed
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Similarly, the same Lean principles associated with material flow and processing should be applied to information
flow and processing: minimize material/information flow times; minimize material/ information content; shorten
and straighten material/information flow to the maximum extent possible, and so on.
Using still another analogy from Lean production, the monolithic office should be converted to “cellular offices,” just
as the monolithic factory is modularized into smaller production cells. Office
equipment should be “right sized” (for example, huge, centrally located, monolithic printing machines should be
replaced with smaller document processors dispersed among the cellular offices.)
While there are no reported studies that quantify all the benefits of Lean beyond production, the following general
outcomes logically can be expected.
• The “voice of the customer” becomes the primary driving force in the enterprise. This has an impact on
product quality, organizational structure, production processes, policies, and overall behavior.
• New product development time is greatly reduced. Customers, suppliers, and enterprise specialists are
involved in product design from the outset.
• Relationships with suppliers have been revolutionized. Adversarial posturing has been replaced by winwin cooperative practices. Target costing results in continuously lower prices for purchased items, with equitable sharing of savings.
• Responsiveness to changing market conditions is enhanced. Production rates can be adjusted much more
rapidly to meet fluctuating market demand. New products are introduced rapidly, with minimal disruption.
• The organizational structure shifts from a vertical to a horizontal focus, aligning value-adding activities
with the customer value stream. Decision-making is decentralized, contributing to enterprise responsiveness.
The organization is “flattened,” greatly reducing “overhead.”
• The workforce is empowered. Integrated product/process teams function as self-managed work units,
reducing the cost and clumsiness of supervision. The workforce is multi-skilled, contributing greatly to the
flexibility and responsiveness of the Enterprise. Employees perform inspection and maintenance, and also
determine work methods and workplace arrangement taking on tasks once the purview of highly paid specialists. These specialists are now freed to focus on the overall Enterprise.
• Improved operating margins and increased flexibility provide enhanced business opportunities in existing
or new markets.
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Appendix A – The “What and Why” of Lean
Continued
Specific Benefits in Aerospace
Between 1996 and 1999, LAI consortium members made several site visits to facilities of LAI sponsor-companies to
observe progress toward implementing Lean principles and practices. The site visit report’s “Executive Summary”
speaks to the potential benefits of Lean implementation in aerospace by posing two questions:
“What if an aerospace company and its key suppliers had mastered the application of Lean practices to the
point where they approached Toyota as a practitioner of the art?”
“What if all of the best results the team saw on various LAI site visits were achieved in every operation
throughout a single aerospace enterprise?”
According to those who participated in the site visits, Enterprises that met these two “criteria” would be able to
achieve tremendous improvements in product development and production:
Product Development
Production
• Cycle time down 50%
• Assembly touch hours down 49%
• Product development man-hours down 50%
• Nonconformance costs down 70%
• Software development cost down 50%
• Assembly support labor down 80%
• Prototypes made without tools
• Inventory reduced by 90%
• No physical mockups
• Assembly cycle time down 47%
• Engineering changes after release reduced by 50%
• Engineering changes reduced by 60%
• ECP paperwork virtually eliminated
• Fabrication costs reduced 50%
• CDRLs down 80%
• Part lead-time down 69%
• DPMO down 90%
It is envisioned that an enterprise could develop a new aircraft in four to six years (versus today’s twelve- to fifteenyear standard) at half the current development cost. It may also be able to deliver aircraft and missiles with a production lead-time of less than one year and at half the current production costs. That Enterprise does not exist today,
but the achievement does not appear to be out of reach for an Enterprise with the right motivation. Every element
of this level of performance has been demonstrated at one or another of the LAI companies visited; what is needed
is the leadership to implement them all.
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COSTS OF LEAN
smaller machines to serve the same function will also
The remarkable improvements resulting from convert-
require capital expenditures, as will “mistake-proof-
ing to the Lean paradigm cannot be achieved without
ing” manufacturing equipment and processes.
a considerable investment. The primary investment
Similarly, there may be some expenditures in infor-
required, however, is the time of the entire manage-
mation technology to increase information flow across
ment team and workforce.
the Enterprise (e.g., integrated CAD/CAM systems).
Experience has shown that Lean conversion does not
Typically, the savings from reduced inventory levels
typically require extensive capital investments. Lean is
alone are greater than all the costs of converting to
not necessarily high technology, but rather reduces
Lean. Freed-up floor space becomes available for
the need for sophisticated, complex approaches to
future expansion, or may be rented or sold. Shortened
production management and information systems.
product development lead times also result in reduced
resource requirements.
Lean does require a considerable investment in education and training. There may also be the costs of
On balance, implementing Lean actually reduces cap-
acquiring new tooling to reduce set-up times.
ital investment and other resources over the long run.
Replacing large “monument” machines with several
OVERARCHING STRATEGIC CONCEPTS OF LEAN
Six core strategic concepts of the Lean paradigm capture the principal nature of Lean.
• Customer Value and Value Stream
• Waste Minimization and Continuous Improvement
• Flow and Pull
• Near Perfect Product Quality
• Horizontal Organizational Focus
• Relationships Based on Mutual Trust and Commitment
These six concepts clearly distinguish Lean from mass production. The manner in which these concepts are
addressed in Lean organizations is fundamentally different from the approach in traditional organizations, as discussed in the following sub-sections.
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Appendix A – The “What and Why” of Lean
Continued
Customer Value and Value Stream
rience, thereby delighting the customer with a com-
The starting point for Lean thinking is “value” as
plete solution (Gunneson 1997).
defined by the end customer. Defining value requires
thinking from the customer’s perspective and working
Once customer value is defined, the Enterprise must
inward to the company’s capabilities and core
determine specifically how that value can be created
processes.
and delivered in the most efficient and cost-effective
manner. A “value stream” is an end-to-end, linked set
Ultimately, value is defined in terms of specific prod-
of actions, processes, and functions necessary to
ucts and services having specific capabilities/func-
transform inputs (information, raw materials, labor,
tionalities, offered at specific prices to specific cus-
energy, etc.) into a finished product delivered to the
tomers, to be delivered defect-free at specific times.
customer. The value stream includes service after the
Value must be viewed in terms of the entire customer
sale. Customers “pull” value from the value stream.
experience. The goal is to streamline the entire expeWaste Minimization and Continuous Improvement
Defining the value stream as indicated above provides a basis for performing an in-depth analysis of each individual action in that value stream. Each action is classified into one of the following categories:
1. It is an action that unambiguously creates value.
2. It is an action that creates no value but is unavoidable given the current
capabilities within the company.
3. It is an action that creates no value and should be eliminated immediately.
Actions in categories (1) and (2) are analyzed further in an effort to improve the actions as much as possible and
eliminate unnecessary resource expenditures.
This process never ends. The organization implements a formal Continuous Improvement process that relentlessly
seeks to reduce waste of all kinds and continually improve the product and service delivered to the customer.
Consequently, Lean Enterprises realize ongoing reductions in response cycle times, production times, costs, required
production space, and errors. The workforce is heavily involved in the Continuous Improvement process and is the
primary source of ideas and initiatives that generate improvements. This applies to the entire organization, not just
production operations.
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Flow and Pull
ed. Consequently, much effort is expended in designing
Once wasteful actions along the value stream are elim-
processes that turn out near-perfect (within tolerances)
inated to the maximum extent possible at a given time,
parts every time. Also, there are no re-work stations to
the next Lean principle is put into practice: making the
compensate for defective production. If a defective part
remaining value-creating steps “flow.” Here the pri-
is produced, it must be detected immediately (not
mary challenge is to discard the “batch-and-queue”
passed to the next workstation) and the situation result-
mentality prevalent in mass production and implement
ing in the defect must be determined and corrected
small-lot production, with batch sizes of a single unit as
before production is resumed. This same tight adher-
the ultimate goal. Flow is best achieved by discarding
ence to very high quality standards carries through fab-
traditional functional organizational structures, to be
rication, assembly, and final product completion.
replaced with integrated product/process teams
organized along the value stream (see the “Horizontal
While these principles are expressed in terms of pro-
Organization” discussion below). It is important to
duction systems, they should also be implemented and
note that the concept of “flow” and small batch size
rigorously enforced in all areas of the Enterprise.
applies not only on the factory floor but also through-
TQM programs have demonstrated the benefits of
out the organization (e.g., the flow associated with
implementing high quality standards pervasively
administrative procedures).
throughout the Enterprise.
“Customer pull” is an important conceptual break-
Horizontal Organization Focus
through in the creation of the Lean paradigm.
The traditional organizational structure (a “silo” with
Customers pulling value from the value stream (rather
the various units representing the functions of a mass
than the Enterprise pushing products onto customers)
production organization) is incompatible with the value
results in subsequent pulling actions that cascade up
stream flow. Its design supports long production runs of
the value chain, stage by stage, through the Enterprise
standardized parts in large batches but does not sup-
and all the way to the supply chain.
port one-piece flow and just-in-time (pull) production.
Near-Perfect Product Quality
Companies that have successfully transitioned to the
A Lean production system operates like a fine-tuned
Lean
watch, with each element highly dependent upon other
Product/Process Design (IPPD) teams organized as
elements with which it interacts. Since there are no
self-managed work teams to be an effective structure.
buffers, any part delivered from one work unit to anoth-
In this structure, work teams focus horizontally on a
er must meet specifications. Defects cannot be tolerat-
linked set of activities along the value stream, rather
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paradigm
have
found
© Copyright Massachusetts Institute of Technology, 2000
that
Integrated
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Appendix A – The “What and Why” of Lean
Continued
than reporting up a chain of command through many
continuous improvement efforts. Provisions are made
layers. IPPD teams include members from engineering
for mutual sharing of benefits that accrue from the
design, production operations, industrial engineering,
implementation of Lean practices and continuous
quality assurance, purchasing (supply chain manage-
improvement activities.
ment), human resources, suppliers, and most important, the customer. In addition to using IPPD, many of
Decision authority is decentralized. Decisions are
these same companies are structuring their organiza-
made at the point of knowledge, application, and
tions around other core processes, shedding their tra-
need. People are empowered to make appropriate
ditional organizational silos.
decisions at the point of work.
Relationships Based on Mutual Trust and
Increasingly, Lean Enterprises operate in a “virtual”
Commitment
mode. Non-core functions are outsourced. Temporary
In the mass-production world, many relationships are
strategic partnerships, formed (sometimes with direct
adversarial. For example, it is common to engage a
competitors) to capitalize on a particular opportunity,
large number of suppliers who compete against each
are disbanded when the opportunity is exhausted.
other for the firm’s business. Suppliers are rarely
Enterprises operating in this manner must learn to
engaged in product development. Relationships tend
share data, knowledge, and expertise considered
to be short-lived, one year at a time. The Enterprise
highly proprietary in the mass-production mindset.
maintains a large staff of incoming inspectors to catch
defects. Similarly, relationships with the workforce are
Two recent developments are having a dramatic
often adversarial, especially if it is unionized.
impact on the manner in which companies may interact with customers, suppliers, partners, and other
In Lean Enterprises, win-win arrangements are the
potential stakeholders. Electronic commerce (e-com-
norm, as are long-term relationships with a few sup-
merce) is changing the manner in which enterprises
pliers. Qualified suppliers are involved in product
deal with suppliers. The cycle time for ordering, ship-
development. Target costing is used to achieve contin-
ping, receiving, and paying for supplies has been
ual reductions in costs, with the savings shared. The
reduced from weeks to days (or, in some cases, even
supplier ensures the quality of the supplies delivered;
to hours). Equally dramatic change is unfolding in
no incoming inspection is necessary.
business-to-business (B2B) interactions, both in terms
of their nature and speed. Strategic partnerships can
It is desirable in most cases to establish labor-man-
be formed very rapidly in response to business oppor-
agement partnerships that stress win-win arrange-
tunities that may be available only briefly. To play in
ments. The workforce is multi-skilled and supports
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this fast-paced game, enterprises must become much more “forward-focused,” ever ready to move swiftly and deftly
into the fray.
It is interesting to note that Enterprises that have transitioned to the Lean paradigm are much better prepared to capitalize on the new capabilities offered by the Internet than are companies that continue to operate with a mass-production mentality. The horizontal organizational orientation facilitates the agility and responsiveness required for
the new mode of enterprise functioning.
In short, the “brave new world” is upon us. New approaches, new assumptions, new structures, and new mental
models are required to guide us through the largely uncharted waters of the future. There is no alternative. The
mass production mental model is passé.
CHARACTERISTICS OF A LEAN ENTERPRISE
The general nature of a “Lean Enterprise” is still being formulated as we enter the 21st century. Indeed, there is much
confusion and inconsistency in terminology used to characterize the concepts of “lean”, “agile”, and so on. Some
argue (Gunneson 1997) that “agile” is the ultimate end state, with “lean” an intermediate state between “mass” and
“agile.” We do not subscribe to this view. The view of “Lean” in this Guide encompasses the characteristics that
some authors assign to “agile,” and includes additional elements. The principal difference is that some authors view
“Lean” as applicable only at the production level. Our view, however, is that “Lean” is applicable throughout the
Enterprise. We have attempted to be as precise as possible with our terminology to avoid adding to the existing
confusion.
Webster’s Dictionary offers several definitions of “enterprise.” The most pertinent for our purposes is
as follows: Enterprise – a unit of economic organization or activity, especially a business organization.
Similarly, Webster’s offers this definition of “lean”: Lean – thin, spare; containing little or no fat; .
. . suggests a sinewy frame without any superfluous flesh.
Combining elements of these definitions provides this useful definition of “Lean Enterprise”: Lean
Enterprise – a business organization that delivers value to its stakeholders, with little or no superfluous consumption of resources (materials, human, capital, time, physical plant, equipment, information, energy).
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Appendix A – The “What and Why” of Lean
Continued
Lean companies are more alert, agile, and responsive than their heftier cohorts. In a dynamic, global, and competitive business environment, companies must not only achieve a high state of agility and responsiveness, but must
continuously and relentlessly search for ways to reduce consumption of all required resources while delivering
superb value to their customers and other stakeholders.
We will explore the characteristics of a “Lean Enterprise”
across these dimensions:
• Strategy
• Customer Focus
• Organizational Structure
• Incentives and Performance Scorecards
• Lean Management
• Workforce Issues
• Enterprise Business Systems
• Organizational Learning
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Strategy
Factors associated with Lean principles and practices are incorporated explicitly into the Enterprises’ strategic planning process: customer response cycles; customer satisfaction; rationalized supply chain; flexibility
and adaptability; service after the sale; strategic use of information/communication technologies.
The business need for Lean has been clearly determined, articulated, and conveyed throughout the organization.
Strategic business goals, along with Lean enterprise metrics, are conveyed to all levels of the organization.
Flexible strategies and relationships exist with suppliers and even with direct competitors, allowing rapid formation and disbanding of partnerships as opportunities arise.
Competitive benchmarking is performed regularly relative to delivery of customer value.
Customer Focus
Everyone in the Enterprise is focused continuously on the goal of delivering best life cycle value to the customer.
The primary driving force is the “voice of the customer,” with tangible evidence of this found in every corner of the Enterprise.
Each individual understands his or her personal impact on customer value, and how he or she adds values
to the Enterprise.
The company has an ongoing customer research program that gathers information on what constitutes “success” for the end customer and how well the organization is performing relative to customer expectations
and competitor performance.
Customer value streams are mapped and optimized to ensure that all resource deployment decisions are
directed to the primary goal of delivering superb customer value.
Integrated Product and Process Development (IPPD) teams include customers, suppliers, marketing, purchasing, human resources, business systems, and manufacturing. These teams are organized horizontally
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Appendix A – The “What and Why” of Lean
Continued
along the customer value stream, thereby ensuring concurrency and collaborative input to product and
process design decisions. The IPPD teams may be geographically distributed, functioning as “virtual” teams.
Organizational Structure
Ideally, the Lean Enterprise has evolved into an agile, rapidly reconfigurable, customer-focused, supplierintegrated, “virtual” organization.
The horizontal axis dominates the organizational structure, with IPPD teams aligned along the customer
value stream; there is a minimum number of management levels; and decision authority is at the point of
action. Large, bloated, “indirect” staff functions are mostly gone, and any remaining staff is redeployed to
value-adding activities in the horizontally oriented structure.
A majority of the resources previously concentrated in the functional “silos” of the vertical organization are
now redeployed and integrated into the IPPD teams and other core processes. A relatively small contingent
of managers in each functional (core process) area may remain centrally located at the Enterprise level to
enforce necessary standards across multiple product families and to facilitate professional development and
career-path planning for the various specialty employees now dispersed among the process teams.
Team-based management is implemented in all areas of the Enterprise, following a comprehensive education and training program. The workforce consists of multi-skilled workers, organized in properly sized work
cells to optimize one-piece flow and accommodate fluctuations in market demand. This concept applies to
support functions as well as to production.
All work activities, both direct and indirect, are organized to support the optimization of multiple customer
value streams.
Customers and suppliers are involved in all phases of the product life cycle, from concept development
through product delivery and support.
Cross-functional interdisciplinary teams support and continuously improve all core processes in the
Enterprise.
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Incentives and Performance Visibility
Value-added metrics are determined and deployed, since all performance is evaluated against customer
value and world-class performance. Any activity that does not measure up is improved or outsourced.
Metrics that portray process performance relative to the value stream are communicated to appropriate levels and made visible. Visible scorecards are posted in all areas so that employees can see immediately the
impact of their performance on the Lean metrics, and how their own rewards are a function of their performance against those metrics.
An integrated set of metrics are designed and deployed to reflect performance outcomes central to the primary goals of the Lean Enterprise: (1) delivering superb value to the customer and other stakeholders; (2)
maintaining the capability to respond rapidly to changes in the global business environment; (3) continuously eliminating non-value-adding activities; (4) continuously upgrading workforce skills and knowledge in
preparation for future challenges and opportunities. These metrics should distinguish between output
(enabling), such as hours of training, and outcome (results), such as ROI, market share, and so on.
Incentives are designed to reward both individual and team performance that contributes to the achievement of the primary goals of the Lean Enterprise, as stated above. An equitable arrangement is in place for
the mutual sharing among all stakeholders of benefits gleaned from overall Enterprise performance and
from continuous improvement activities.
Employee compensation accounts for the degree to which multi-functional skills and knowledge have been
acquired and demonstrated.
Both individual and team performance appraisals are based upon contributions to the achievement of
strategic business goals and operating results.
Lean Management
The Enterprise Leader and Senior Managers have a deep knowledge and understanding of Lean principles,
practices, and behaviors, not only as applied in production operations, but throughout the entire Enterprise.
The leadership is visibly involved in promoting Lean initiatives and in evaluating the results of these initiatives. The leadership ensures the provision of required resources.
The Enterprise Leader involves the Stakeholder Leaders in the formulation, implementation, and review of
Lean initiatives. Special attention is paid to the relationship between management and the workforce.
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Appendix A – The “What and Why” of Lean
Continued
Enterprise Leaders optimize the value across all Enterprise stakeholders: customers, employees, suppliers,
stockholders, and the community.
A shared vision of the Lean enterprise is created and communicated to the entire organization.
The Lean transformation involves leaders at all levels, who nurture the change process and remove barriers
to implementation.
Relationships based on mutual trust and commitment are developed with customers, suppliers, and the workforce.
Management spends most of its time developing employees to the point that they can organize and manage their own work and improve the capability of the organization to respond to the market faster than
before, with solutions of higher market value.
Employees are empowered after appropriate training to make their own work decisions. Employees are
given general directions, resources, and guidance, and then expected to run their processes and strive for
continuous improvement through the implementation of creative solutions.
Lean principles, practices, and behavior are “business as usual” (“This is the way we do business; this is the
way we operate.”) within the Enterprise.
Workforce Issues
The workforce is multi-skilled. Ideally, every employee is capable of performing every task within his or her
work unit. This is necessary to ensure that the throughput rates of work units may be adjusted dynamically
in response to changes in market demand.
There is a heavy emphasis on continuous education, training, and skill building.
Risk taking, leadership, and innovation are encouraged and rewarded at all levels.
Employees are involved actively in planning and goal setting for their own work units. They perform their
own inspection, maintenance, and workplace design, tasks once handled by professional/technical staff.
Employees are considered critical to problem-solving, cycle-time reduction, and continuous improvement.
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Enterprise Business Processes and Systems
“Flow” is optimized across the processes. All non-value-added activities and resources are eliminated.
Processes, because they are flexible and dynamic, can be adapted to changing markets, customer expectations, and competitive pressures.
Process teams continuously redesign and streamline all business processes to reduce cycle times, while
improving quality and customer service.
Processes are networked and interlinked to facilitate concurrency, speed, and handoffs, and to minimize
inter-process gaps and disconnects.
Process designers are capable of continuously renewing processes to accommodate rapidly shifting strategies and capitalize on unanticipated opportunities.
Databases are integrated, interactive, and seamless, providing consistent information to all elements of the
extended enterprise.
Employees share information that is available at the precise time and place that decisions need to be made.
Information flows seamlessly across all processes of the extended Enterprise.
Information is shared without regard for geographic distance or corporate boundaries.
Information is created and maintained in a “Lean” fashion: entered once into common databases in an open
architecture.
Organizational Learning
“Organizational learning” is fostered to enhance the creation, capture and rapid diffusion of knowledge.
The enterprise captures lessons learned and incorporates the derived general principles in its decision rules,
design guides, and other appropriate elements.
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Appendix A – The “What and Why” of Lean
Continued
Knowledge is retained in electronic knowledge bases managed by a Chief Knowledge Officer (CKO), as
well as in documented processes, training materials, individual employees, and teams.
The Enterprise knowledge bases provide input to a family of reusable simulation models that can be
retrieved and executed in various configurations. These models are the basis for optimizing the many
processes across the Enterprise and for assessing the likely outcomes of a wide variety of “what-if” questions asked by executives during the strategic planning process and by managers during normal business
operations.
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Reference Material
There is a substantial body of material available that explores various elements of the subject of Lean. In the following two sections, we have identified materials that we believe would be most useful to Enterprise Leaders serious about
lean transformation. In the first section, we have listed a set of available materials that we consider as essential for
anyone wishing to acquire a substantive understanding of the subject of Lean. In the second section, we recommend
additional materials that provide greater depth of understanding especially regarding specific facets of lean.
ESSENTIAL READING
Kochan, T., R. Lansbury, and J. MacDuffie, After Lean Production (Ithaca: ILR Press, 1997)
Kotter, J., Leading Change (Boston: Harvard Business School Press, 1996)
Liker, J., (editor), Becoming Lean (Portland: Productivity Press, 1998)
Nunez, J. and S. Babson (editors), Confronting Change: Auto labor and lean production in North America (Puebla,
Mexico: Benemerita Universidad Autonoma de Puebla, 1998)
Ohno, T., Toyota Production System: Beyond Large-Scale Production (Portland: Productivity Press, 1988)
Pine, B., Mass Customization (Boston: Harvard Business School Press, 1993)
Shingo, S., A Study of the Toyota Production System (Portland: Productivity Press, 1989)
Womack, J., Daniel Jones and Roos, D., The Machine that Changed the World (New York: Rawson Associates,
1990)
Womack, J. and Daniel Jones, Lean Thinking (New York: Simon & Schuster, 1996)
RECOMMENDED READING
Berggren, C., Alternatives to Lean Production (Ithaca: ILR Press, 1992)
Cooper, R., When Lean Enterprises Collide (Boston: Harvard Business School Press, 1995)
Cutcher-Gershenfeld, J. et al., Knowledge-Driven Work (New York: Oxford University Press, 1998)
Dimancescu, D., Peter Hines, and Nick Rich, The Lean Enterprise (New York: American Management Association,
1997)
Green, Wm. and E. Yanarella (editors), North American Auto Unions in Crisis: Lean Production as Contested Terrain
(Albany: State University of New York Press, 1996)
Greif, M., The Visual Factory (Cambridge: Productivity Press, Inc., 1991)
Gunneson, A., Transitioning to Agility (Reading, MA: Addison-Wesley Publishing Company 1997)
Hounshell, D., From the American System to Mass Production, 1800 – 1932 (Baltimore: The Johns Hopkins
University Press, 1984)
Kaplan, R., and David Norton, The Balanced Scorecard (Boston: Harvard Business School Press, 1996)
Monden, Y., Toyota Production System, 3rd ed. (Norcross, GA: Engineering and Management Press, 1998)
Ostroff, F., The Horizontal Organization (New York: Oxford University Press, 1999)
Papows, J., enterprise.com (Reading, MA: Perseus Books, 1998)
Porter, M., Competitive Advantage (New York: The Free Press, 1985)
Senge, P., The Fifth Discipline (New York: Doubleday, 1990)
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Appendix B – LESAT Glossary
Activity - A unit of work that has a beginning and
solution, assumptions and constraints, alternative
an end, occurs over a period of time, and consumes
solutions, life-cycle investment costs, quantified bene-
input(s) and produces output(s). (Ref. 2)
fits, an analysis of costs versus benefits, and an analy-
Backflow - A condition in which a part/product
being processed is returned to a previous stage due to
a defective condition, a missing operation, or other
anomalous situation.
Balanced Scorecard - An analysis technique and
management instrument that translates an enterprise’s
mission and strategy into a comprehensive set of performance measures to provide a framework for strategic action. The scorecard may gauge organizational
sis of risks involved. Within Department of Defense
(DoD), a business case for a business process
improvement project is called a Functional Economic
Analysis (FEA). (Ref. 2)
Cellular layouts – The layout of machines of different types performing different operations in a tight
sequence, typically in a U-shape, to permit singlepiece flow and flexible deployment of human effort by
means of multi-machine working. (Ref. 1)
performance across several perspectives such as:
Consensus - A state where group members support
financial, customers, internal business processes, and
an action or decision, even if some do not fully agree
learning and growth. (Ref. 2)
with it. A consensus decision is made after aspects of
Baseline - A standard for comparison used as a reference for measuring progress. Often used as representation of the current state to be used to assess performance against benchmarks and/or to assess future
reviewed or discussed to the extent that everyone
openly understands, supports, and participates in the
decision. (Ref. 2)
Core Competency - The particular capabilities
states. (Ref. 2)
Batch-and-queue - The mass-production practice of
making large lots of a part and sending the batch to
wait in the queue before the next operation in the production process. Contrast with single-piece flow. (Ref. 1)
Best Practice – A method of accomplishing a business function or process that is considered superior to
other known methods. (Ref. 2)
Business Case - Justification for an improvement.
Serves as a decision package for enterprise executives. Typically includes such information as an analysis of current problems or future needs, a proposed
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an issue, both positive and negative, have been
(knowledge, demonstrated proficiency and experience) of an enterprise that satisfy existing strategy and
serves as the basis for growth or diversification into
new lines of business. (Ref. 2)
Cross Functional Management – A process
designed to encourage and support interdepartmental
communication and cooperation throughout an enterprise, as opposed to command and control through
narrow departments or divisions. The purpose is to
achieve enterprise targets such as quality, cost, and
delivery of products and services by optimizing the
sharing of work. (Ref. 6)
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Culture - Shared characteristics such as values,
Extended Enterprise – All businesses along the
behaviors, and beliefs that distinguish the members of
value stream that contributes to providing value to a
one group from those of another. Organizational cul-
customer. (Adapted from Ref. 1.)
ture includes the common set of beliefs, sentiments,
priorities, attitudes, perceptions, operating principles,
and accepted norms shared by individuals within an
organization. Cultural change is a major shift in
these organizational characteristics. (Ref. 2)
Customer - A stakeholder who is a recipient of a
product or service produced by an enterprise.
Customers may be internal or external to the organization. External customers, those in the marketplace,
are the reason an enterprise exists. Internal customers
are the reason a functional area or department exists
– an interdependent department, or a downstream
user in the value chain. When services rather than
products are provided, customers are often called
clients. (Ref. 2)
Cycle Time - The time required to complete one cycle
of an operation. If cycle time for every operation in a
Flow – The progressive achievement of tasks along a
value stream so that a product proceeds from design
to launch, order to delivery, and raw materials into
the hands of the customer with no stoppages, scrap,
or backflows. (Ref. 1)
Continuous Flow Production – Items are produced and moved from one processing step to the next
one unit-at-a-time. Each process makes only the one
piece that the next process needs, and the transfer batch
size is one. Also called “single-piece flow” or “one-piece
flow.” Contrast with batch-and-queue. (Ref. 4)
Gap Analysis - The difference between a current
state or position and a desired state or position. (Ref. 2)
Innovation – The practical transition of ideas into
new products, services, processes, systems and social
interactions. (Ref. 5)
complete process can be reduced to equal takt time,
Just-in-Time – Producing or conveying only the
products can be made in single-piece flow. (Ref. 1)
items that are needed by the next process when they
Employees – All of the individuals employed by the
are needed and in the quantity needed. (Ref. 4)
organization including full time, part time, temporary
Lead-time – The total time a customer must wait to
and contract employees. (Ref. 5)
receive a product after placing an order. When a pro-
Enterprise - Any corporate or business-unit organization with a distinct mission, market segment, suite of
products or services, customer base, profit/loss
responsibility, and set of competitors. The purpose for
the organization’s existence is to perform its mission
duction system is running at or below capacity, leadtime and throughput time are the same.
When
demand exceeds the capacity of a system, there is
additional waiting time before the start of production,
lead-time exceeds throughput time. (Ref. 1)
and achieve associated goals. (Ref. 2)
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Appendix B – LESAT Glossary
Continued
Non-value Added - Any product, process, or
Push System - A planning system that schedules
service that does not add value to the ultimate cus-
upstream operations according to theoretical down-
tomer. (It is important to note that non-value added is
stream needs based on a plan, which may not be cur-
not the same as “not necessary”, since some activities
rent – as opposed to a pull system. (Ref. 3)
are required by law or are necessary for process control, such as inspection. These may not add value but
are used to assess processes for control and improvement.) (Ref. 3)
Single-Piece Flow – A situation in which units proceed, one at a time, through operations in design,
order-taking, production and assembly, without interruptions, backflows, or scrap. (Ref. 1)
Partnerships – A working relationship between
two or more parties. Partners can include suppliers,
distributors, joint ventures, and alliances. (Ref. 5)
Performance Measure - A dimension of an activity or process – quality, cost, cycle time, or other characteristic – that can be used to judge the effectiveness
or efficiency of the process against a target or standard
value. (Ref. 2)
Stakeholders – All those who have an interest in an
organization, its activities and its achievements. These
may include customers, partners, employees, shareholders, owners, government, and regulators. (Ref. 5)
Strategic Plan - A comprehensive statement of an
organization’s overall mission, objectives, and strategy. A detailed roadmap of the direction the organization intends to follow in conducting its activities.
Process – A sequence of activities that adds value by
Provides direction, concentration of effort, consistency
producing required outputs from a variety of inputs.
of purpose, and flexibility as a business moves to
(Ref. 5)
maintain and improve its competitive position. (Ref. 2)
Productivity - An overall measure of the ability to
Strategic Planning - The top-level management
produce a good or service. It is the actual output of
decision process that focuses on the overarching,
production compared to the actual input of resources.
long-range direction of the enterprise and establishes
Productivity is a relative measure across time or
the means by which that direction is reached. Includes
against common entities. In economics, the ratio of
defining top-level and subordinate missions, goals,
output in terms of dollars of sales to an input such as
and supporting objectives, i.e., how the enterprise
direct labor in terms of total wages. (Ref. 3)
sees its purpose and where it wants to go. Provides
Pull System - A planning system based on communication of actual real-time needs from downstream
operations - ultimately final assembly or the equivalent - as opposed to a push system. (Ref. 3)
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the “big picture” along with a description of how
goals and objectives are to be achieved and the indicators that will be used to measure performance and
outcomes. (Ref. 2)
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Takt Time - The available production time divided
material and information flows from beginning to end
by the rate of customer demand. For example, if cus-
utilizing a visual representation of every process. This
tomers demand 240 widgets per day and the factory
facilitates understanding of current state and the
operates 480 minutes per day, takt time is two min-
development of the proposed future state. The differ-
utes; if customer wants two new products designed
ence between the two states becomes the basis for the
per month, takt time is two weeks. Takt time sets the
Lean Transformation plan.
pace of production to match the rate of customer
demand and becomes the heartbeat of any lean system. (Ref. 1)
Virtual Organization - An assemblage of core competencies from (perhaps) previously unassociated participants; on a temporary basis for a defined purpose and
Value – A product or service’s capability provided to
for an indefinite period of time; has profit/loss or other
a customer at the right time, at an appropriate price,
accomplishment responsibility; upon completion of the
as defined in each case by the customer. (Ref. 4)
original purpose, the organization is dissolved.
Value-added Activity - Value-added is the differ-
Vision - A guiding theme that articulates the nature of
ence between dollar sales and the cost of raw materi-
the business and the enterprise’s intent for its future. A
als and purchased parts. Value-added activity is an
description of what senior management wants to
activity or step in a process that adds value to an out-
achieve. Usually refers to the medium to long term and is
put product or service. Such an activity merits the cost
often expressed in terms of a series of objectives. (Ref. 2)
of the resources it consumes in production. These are
the activities that customers would view as important
and necessary. A value-added activity contributes
directly to the performance of a mission, and could not
be eliminated without impairing the mission. (Ref. 2)
Value Added Time – Time for those work elements
that transform product into value the customer is willing to pay for. (Ref. 4)
Value Stream - The specific activities required to
design, order, and provide a specific product, from
concept to launch, order to delivery, and raw materi-
Waste - Any product, process, or service, which
does not add value to the ultimate customer. Waste in
business processes/production can be broken down
into seven types; Waiting, Unnecessary Motion,
Processing, Inventory, Moving Items, Making Too
Much, Fixing Defects. (Ref. 3)
Ref. 1 Lean Thinking, James P. Womack and Daniel T.
Jones, Simon & Schuster, 1996
Ref. 2 Techniques for Enterprise Management, Software
Productivity Consortium, SPC-98016-MC, Feb.
1999
Ref. 3 Internal Glossary of Rockwell Collins Corp., Lean
Electronics Division
als into the hands of the customer. (Ref. 1)
Ref. 4 Training to See, Mike Rother and John Shook, The
Lean Enterprise Institute, Feb. 2000
Value Stream Mapping/Analysis - Involves
Ref. 5 The EFQM Excellence Model Glossary of Terms
defining a product families’ / business processes’
Ref. 6 The Lean Enterprise, Dan Dimancescu, Peter Hines
and Nick Rich, American Management Association,
1997
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Appendix C – TTL Tutorial
Overview of Transition-to-Lean Roadmap: Enterprise Level
We have developed a conceptual framework — the
internal and external relations with all key stakehold-
“Transition-to-Lean Roadmap” — to assist firms in
ers, and structural issues that must be addressed dur-
their efforts to transform into Lean enterprises. The
ing a significant change initiative.
framework portrays the overall “flow” of action steps
necessary to initiate, sustain, and continuously refine
an Enterprise transformation based upon Lean principles and practices. This particular Transition-to-Lean
Roadmap was developed from an Enterprise perspective, with particular attention paid to strategic issues,
Eight pairs of sheets comprise the Transition-to-Lean
Roadmap, providing an introductory, high-level
overview of the complete framework. These are a
“snapshot” of the overall transition process. The accompanying text provides further detail and elaboration.
Figure 1 is a schematic representation of the Transition-to-Lean Roadmap. The following
principles and concepts were important in the team’s creation of this Roadmap:
• The Enterprise Leader must lead the transition.
• Since Lean principles and practices are fundamentally different from those of mass production, Senior
Leaders must open their minds to new concepts that may seem counter-intuitive and even contradictory to
common sense.
• Until Senior Leadership understands, embraces, and commits to a full conversion to Lean, any initiative
will
have little chance of succeeding.
Figure 1 depicts three basic cycles of activity: the Entry/Reentry Cycle (Adopt Fundamental Change); the Long Term
Cycle (Create the Environment); and the Short Term Cycle (Detailed Implementation).
The Entry/Reentry Cycle links to the Enterprise Strategic Planning activity, and specifies the actions associated with
the strategic decision to adopt the Lean paradigm. It is energized when a significant commitment is undertaken to
adopt Lean in the Enterprise or when the Enterprise’s basic strategic approach is reshaped in part by the changes
enabled by a Lean transformation.
The Long Term Cycle includes those actions that set the stage for the Enterprise transformation and that prepare the
organization for launching into detailed planning and implementation. Once the activities in this cycle are implemented, the Enterprise remains in this cycle for some time. This cycle is re-entered periodically as significant changes
occur in the external environment.
The Short Term Cycle includes those actions that actually achieve the transformation. This cycle has a fast clock
speed, with ongoing action-monitoring-corrective action phases.
The following sections examine in detail each segment of the Roadmap.
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conditions necessary for a successful Lean transformation are created. The
© Copyright Massachusetts Institute of Technology, 2000
tion and to accommodate changes occurring in the dynamic external envi-
This cycle is closely linked to the Enterprise Strategic Planning cycle.
The second cycle is called the Long Term Cycle, in which the environment and
re-entered periodically to capitalize on lessons learned during implementa-
specifies the actions associated with the decision to adopt the Lean paradigm.
ronment.
ongoing action-monitoring-corrective action phases. The Long Term Cycle is
planned, executed, and monitored. This cycle has a fast clock speed, with
The Roadmap comprises three “cycles.” First is the Entry/Reentry Cycle, which
transformation of an Enterprise based upon Lean principles and practices.
The third cycle is the Short Term Cycle, in which detailed implementation is
implementation.
work for assisting companies in their transition to Lean. It portrays an overall
“flow” of action steps that can initiate, sustain, and continuously refine the
organization is then prepared for launching into detailed planning and
The Enterprise Level Transition-to-Lean Roadmap provides a general frame-
Enterprise Level Roadmap
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Transition-to-Lean Roadmap: Enterprise Level
ADOPT LEAN PARADIGM
Implementing the Lean paradigm requires revisiting every assumption, practice, and process associated with customer interactions, product design, production, quality assurance, human resources, work supervision, organizational structure, business systems, and supplier relations. We must learn to do business, behave, and see value in
fundamentally different ways.
FOCUS ON THE VALUE STREAM
A primary concept of Lean thinking is that all actions and resources of a firm should be focused on creating value.
Any action or resource expenditure that does not contribute directly to the goal of creating value is waste and should
be eliminated to the greatest extent possible. Value stream definitions and analysis will identify the highest leverage
areas that should be pursued in the Lean transformation.
DEVELOP LEAN STRUCTURE AND BEHAVIOR
Both the structure and behavior of Lean organizations are significantly different from those of mass-production
organizations. This segment of the Roadmap deals with creating the mental model and conditions necessary for the
implementation of Lean principles and practices. Incentives, structures, systems, and policies of the Enterprise must
be aligned with the desired behavior.
CREATE & REFINE TRANSFORMATION PLAN
Moving to the Short Term Cycle, we now must identify and prioritize those Lean initiatives that collectively constitute
the Enterprise Level Plan for achieving the desired transformation. Resources must be committed to the plan. An
extensive program of education and training will be required.
IMPLEMENT LEAN INITIATIVES
It is here that the changes in practices and procedures are actually implemented. As a flow-down from the Enterprise
Level Plan, we now define the specific actions, programs, and projects that will be executed within each organizational area and determine how they will be integrated at the system level. These detailed action plans are executed, monitored, and modified as required.
FOCUS ON CONTINUOUS IMPROVEMENT
As progress is made on the detailed action plans, the results of the changes are measured and assessed. Corrective
actions are part of the continuous improvement process. Opportunities for further improvements are identified.
Detailed corrective actions become input for the “Create & Refine Transformation Plan” segment, to be incorporated into the next iteration of the Enterprise Level Plan. Corrective action indicators of more fundamental change drive
the need to revisit the Long Term Cycle for further modifications to the structure and behavior of the enterprise.
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© Copyright Massachusetts Institute of Technology, 2000
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Adopt Lean Paradigm
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Roadmap provides a framework for acquiring an in-depth understanding of
Lean and for obtaining full commitment from Senior Managers to launch a
Lean transformation, or to elevate local Lean initiatives to the Enterprise level.
Adopting the Lean paradigm is an issue of passion as well as logic. One must
have an absolute and abiding belief that the implementation of Lean principles and practices is of essential importance to the Enterprise. Lean is not just
the way things are done, but is the way the Enterprise thinks, what it believes,
how it behaves, and what it values.
Most of today’s business leaders climbed the ladder of success while follow-
ing the same mass-production practices they are now being asked to aban-
don.
A large number of “movements” and initiatives have been pushed on man-
agers over the past several years, including re-engineering, TQM, and oth-
ers. While it is tempting to believe that the sum of all these initiatives add up
to Lean, that is not the case. In fact, some of these initiatives may require
modification to be compatible with Lean principles.
© Copyright Massachusetts Institute of Technology, 2000
Enterprise and its interactions with the rest of the world. This segment of the
are counter-intuitive and diametrically opposed to those of mass production.
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Lean requires a deep understanding of the fundamental aspects of an
The Lean paradigm consists of many concepts, principles, and practices that
© Copyright Massachusetts Institute of Technology, 2000
Major Tasks within “Adopt Lean Paradigm”
Build Vision
Create a new mental model of how the enterprise would function if it acts and behaves according to Lean
principles and practices.
Extend the vision of Lean to all aspects of the Enterprise.
Make the Lean vision an integral part of the company’s strategic business plan.
Convey Urgency
Identify the strategic imperative, the forcing function for transitioning to Lean.
Understand the long-term competitive threats.
Establish that Lean is the most promising alternative for addressing the strategic imperative.
Foster Lean Learning
Have all senior managers acquire an in-depth understanding of the Lean paradigm and make site visits to
successful Lean companies.
Understand the full implications of transitioning to Lean.
Learn that lean is about “behavior”, not just practices and activities.
Make the Commitment
Enterprise Leader must make the final decision to transition the company to Lean.
Make the commitment irrevocable.
Commit the significant resources required (primarily time, energy, and personal capital).
Obtain Senior Management Buy-in
Full buy-in is required from all senior managers.
In-depth education and training is required.
Managers who are unwilling or unable to change must be replaced.
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© Copyright Massachusetts Institute of Technology, 2000
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Focus on the Value Stream
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employees, union (if any), corporate entity, management and supervision
at all levels, suppliers, partners, stockholders, community, and regulators.
The pulling action naturally extends beyond the Enterprise to suppliers and
other external agencies.
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The vision of the company operating and behaving in this manner must be
holders. At a minimum, consideration must be made for: customers,
tion/communications systems, human resource management, and so on.
ers by taking a global systems view.
© Copyright Massachusetts Institute of Technology, 2000
It is important to optimize across the value streams of all those stakehold-
Lean transformation initiatives will have a significant impact on all stake-
tomer’s perception of value.
added, thereby better defining for the Enterprise how to capture the cus-
tions: product design, marketing, business systems, accounting, informa-
ing in cascaded pulling actions back upstream across all Enterprise func-
It is helpful to visualize customers “pulling” value from the company, result-
as waste and should be eliminated.
Enterprise goals and metrics should also be expressed in terms of value-
nal constituents.
firm should be focused on creating value for its customers. Any action or
resource expenditure that cannot be associated with this goal is regarded
created and communicated across the Enterprise and to important exter-
A primary concept of Lean thinking is that all actions and resources of a
© Copyright Massachusetts Institute of
Major Tasks within “Focus on the Value Stream”
Map Value Stream
Elicit definition of value from the end customer.
Move from customer inward to Enterprise core processes; continue externally to suppliers.
Realize that the end-to-end chain of actions, resources, and decisions required to deliver defined value is
the customer’s value stream.
Optimize the value stream by eliminating non-value-adding actions (waste); continuous improvement
efforts never end.
Realize that the Enterprise must optimize across multiple stakeholder value streams (customer, employees,
shareholders, and suppliers).
Internalize the Vision
Create a characterization of how customers pull value from the value stream; communicate this vision
across the Enterprise.
Organize the internal value stream such that downstream units “pull” value from preceding upstream
units; cascade the process backwards, extending to the supply chain.
Focus upon continuous improvement process to achieve ongoing waste elimination.
Create the “future” value stream.
Set Goals and Metrics
Derive goals & metrics directly from identified strategic needs.
Determine baseline measures of how the Enterprise brings value to the customer.
From the Lean vision, specify target measures of anticipated gains based upon adoption of Lean principles
and practices.
Tie goals and metrics to improvements in value-adding activities and elimination of waste; these are the key
Enterprise-level measures of progress in transitioning to Lean.
Identify and Involve Key Stakeholders
Recognize the key stakeholders: customers, employees, stockholders, union (if any), management, suppliers, and community.
Give special consideration to the workforce in implementing Lean initiatives.
Make stakeholders who are potentially affected by Lean initiatives especially aware and involved in
their development.
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© Copyright Massachusetts Institute of Technology, 2000
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Develop Lean Structure and Behavior
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Lean may have an impact on organizational structure. Incentives must be
rationalized with the new behavior desired. There will be an impact on most
ditions within the Enterprise that will enhance the successful implementation
of Lean principles and practices.
results.
different from those of mass-production organizations. The mass-production
tored, managed, and modified as required in light of actual outcomes.
practiced, and perfected through continuous improvement efforts. An exten-
© Copyright Massachusetts Institute of Technology, 2000
phasing and execution. The change process itself must be carefully moni-
practices must be unlearned. Lean principles and practices must be learned,
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An Enterprise transformation of this magnitude will require careful planning,
be relentlessly rooted out and banished. Mass-production principles and
mentality, so firmly embedded in the organization’s collective mindset, must
demonstrated that structure drives behavior and that behavior, in turn, drives
Both the structure and the behavior of Lean organizations are significantly
business systems, processes, and policies. Systems Dynamics modeling has
sive re-education effort will likely be required for the entire Enterprise.
This section of the Roadmap deals with creating the mental model and con-
© Copyright Massachusetts Institute of Technology, 2000
Major Tasks within “Develop Lean Structure and Behavior”
Organize for Lean Implementation
Shift the organizational structure from a vertical focus (that supports the mass-production mentality) to a horizontal focus (that supports a Lean mindset).
Establish Integrated Product/Process Development (IPPD) teams, aligned horizontally with the customer value
chain.
Eliminate unnecessary layers of management; decentralize decision-making.
Establish and empower a Lean Focus Office for facilitating the Lean initiative.
Identify and Empower Change Agents
Identify those in the organization who can effect positive transformational change.
Recognize the need to act at both the Enterprise and local levels.
Enlist the “best and brightest” who are most likely to develop a passion for the Lean transformation.
Communicate a common Lean vision and coordinated approach.
Align Incentives
Structure incentives to reward Lean behavior.
Remove disincentives.
Consider both monetary and non-monetary incentives.
Consider both individual and group (team) incentives.
Tie incentives to Lean metrics through visual scorecards.
Tie executive compensation to Lean performance metrics.
Adapt Structure and Systems
Apply Lean principles to redesign all Enterprise systems and processes.
Use the inherently simpler requirements of a Lean organization to reduce the complexity of
information/communication systems.
Redesign financial/accounting systems to be compatible with the Lean paradigm and to be aligned with
appropriate Lean metrics.
Bring policies and procedures into compliance with Lean.
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© Copyright Massachusetts Institute of Technology, 2000
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Create and Refine Transformation Plan
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block.
Lean paradigm in the Long Term Cycle, we are now in a position to develop,
Office, reporting directly to the Enterprise Leader, is responsible for exercising configuration control of the Enterprise-Level Plan
demand ever lower costs, ever shorter response cycles, ever higher quality,
and ever higher service after the sale. The Enterprise-Level Plan must be
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© Copyright Massachusetts Institute of Technology, 2000
projects, programs, and activities that will be required. The Lean Focus
adigm comes from the relentless pressures to deliver value to customers who
designed to address the explicit “need” previously established, thereby align-
similar name and function) to facilitate and coordinate the extensive set of
sider establishing and chartering a Lean Focus Office (or an office with a
In the “Adopt Lean Paradigm” block, the “need” to transition to the Lean par-
the desired transformation.
Organizations embarking upon a Lean transformation initiative should con-
prise-level value-stream mapping performed in the “Focus on Value Stream”
of the Roadmap. Having prepared the organization for implementing the
implement, and monitor a comprehensive Enterprise-Level Plan to achieve
ing the strategic and Lean visions. It will also draw heavily from the enter-
We are now transitioning from the Long Term Cycle to the Short Term Cycle
© Copyright Massachusetts Institute of Technology, 2000
Major Tasks within
“Create and Refine Transformation Plan”
Identify and Prioritize Lean Initiatives
Develop/refine descriptions of current state.
Develop/refine characteristics of the desired future state.
Create an Enterprise-level transition path based upon gap analysis.
Extend/translate needs (from gap analysis) to Enterprise-level activities.
Prioritize and sequence the activities.
Develop a time-phased schedule for the collective set of Enterprise Lean initiatives, with due consideration
to resource limitations.
Critically review all ongoing “movements” and initiatives for compatibility with Lean.
Commit Resources
Recognize that the primary resource required is the time of all individuals in the Enterprise.
Plan to meet all production commitments during the Lean transformation.
Allocate special resources as needed to accommodate increased workloads due to the Lean initiative.
Make a firm commitment to all resource needs.
Provide Education and Training
Establish a comprehensive, cohesive program of education and training for the entire Enterprise. Pay attention to its careful phasing.
Follow “just-in-time” principles in scheduling education and training events.
Modify the program and provide re-training as needed, based upon feedback.
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© Copyright Massachusetts Institute of Technology, 2000
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Implement Lean Initiatives
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vided within the framework of a comprehensive schedule. These plans are
executed and monitored. Short-term corrective action is determined and
setting the stage and preparing the organization for the changes in the
value-stream activities that will now be affected.
toward a Lean state.
all schedule, specific short-term action plans and programs are now devel-
© Copyright Massachusetts Institute of Technology, 2000
Enterprise-Level Plan will change as the organization moves more and more
respond to the identified critical needs. Within these parameters and over-
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As we iterate through the Short Term Cycle, sub-level decomposition of the
broad parameters and directions for achieving the changes required to
The Enterprise-Level Plan created in the previous segment provides the
The lower-level plans are prioritized and time-phased resources are pro-
mentation and transformation begins. All previous stages have focused on
incorporated as necessary.
oped. Detailed plans at the Enterprise level are linked to lower-level plans.
The second segment of the Short Term Cycle is where the process imple-
© Copyright Massachusetts Institute of Technology, 2000
Major Tasks within “Implement Lean Initiatives”
Develop Detailed Plans
Map appropriate elements of Enterprise-Level Implementation Plan to core processes (horizontal organizational orientation).
Structure short-term action plans/projects that are detailed and specific.
Estimate time-phased resource requirements for each detailed plan.
Integrate the several detailed plans, generate prioritized schedule.
Provide resources.
Assign responsibility and accountability.
Incorporate needed education and training into the plans.
Implement Lean Activities
Launch detailed action plans, with coordination and facilitation provided by Lean Focus Office.
Challenge change agents and senior managers to identify and remove barriers to implementation.
Track progress against schedule milestones, display outcomes visibly, and broadcast successes.
Determine and implement short-term corrective action as required and modify overall plan as appropriate.
Resolve conflicts.
Provide “just-in-time” education and training.
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© Copyright Massachusetts Institute of Technology, 2000
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Focus on Continuous Improvement
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Lean transformation process becomes recognized as a keystone within the
Enterprise’s strategic plan, a third flow path may occur through the segment
ities in this segment become a natural part of the Enterprise’s culture can the
organization achieve a significant state of being Lean.
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those occasions when significant structural modifications seem to be called
exercises the short-term corrective action loop. At specified intervals and on
is back through the “Create and Refine Transformation Plan” segment, which
The flow from this segment may go in one of three directions. Ordinarily, it
Modifications will be required.
The organization will learn from various implementation initiatives.
attempt to create an Enterprise-Level Plan will not yield a categorical plan.
© Copyright Massachusetts Institute of Technology, 2000
journey toward its continuously updated vision.
tomer, and is prepared to enter whatever cycle is required to continue its
ually strives to become increasingly focused on delivering value to the cus-
a framework in which the organization learns from its past behavior, contin-
Clearly, the overall Roadmap represents a never-ending process. It suggests
itself may alter the Lean implementation process.
interdependent and strategic planning, now shaped by Lean implementation,
the interaction of Enterprise-level strategy and Lean transformation become
“Enterprise Strategic Planning” in the Entry/Reentry Cycle. This occurs when
Value Stream”. This path takes us back to the Long Term Cycle. When the
ly important for long-term effectiveness and continuity. Only when the activ-
This final segment in our Roadmap is in many ways the most critical. The first
for, the flow will proceed along a second path, to the segment “Focus on the
This “oversight” segment is the third in the Short Term Cycle, and is critical-
© Copyright Massachusetts Institute of
Major Tasks within
“Focus on Continuous Improvement”
Monitor Lean Progress
Aggregate results from the implementation of detailed plans back to the Enterprise-Level Implementation
Plan.
Measure implementation progress against schedule and budget.
Detect significant deviations and determine their causes.
Institute corrective actions.
Direct senior managers to participate visibly in monitoring the metric performance and in heralding successes.
Nurture the Process
Gain the support and encouragement of the Enterprise Leader and senior managers. These are essential,
especially when the transformation encounters significant difficulties.
Pay special attention to modified incentives and rewards: Are they working? Are they understood? Do they
need further modification?
Encourage entire workforce to offer suggestions for further improvements. Benefits gained from Lean implementation should be shared equitably between management and the workforce.
Make sure that specific issues/problems are dealt with by the Lean Focus Office.
Emphasize positive reinforcement.
Refine the Plan
Assess each element of the Enterprise-Level Implementation Plan.
Incorporate prescribed corrective actions; re-level resources if necessary.
Revise, eliminate, and add elements to the plan as appropriate.
Determine when a significant change or high-level re-think is needed; in such cases, revisit the Long Term
Cycle to determine the necessary modifications.
Capture and Adopt New Knowledge
Capture lessons learned (from both internal and external sources) and add to the Enterprise Knowledge
Base.
Translate and generalize lessons learned for incorporation into Enterprise decision processes, design rules,
operating rules, etc.
Provide input to the Enterprise Strategic Planning
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© Copyright Massachusetts Institute of Technology, 2000
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to embed Lean principles, practices, and behavior to such an extent that they
from company to company.
© Copyright Massachusetts Institute of Technology, 2000
become “business as usual” (see next diagram).
Eventually, the Entry zone of the Roadmap goes away. The ultimate goal is
issues that need to be addressed prior to launching lower-level initiatives.
effort required to accomplish the various segments may vary considerably
will dictate how it approaches its Lean transition. The amount of time and
Every company has its own particular starting point and circumstances that
and processes. That is why this Roadmap places great emphasis on prepar-
an organization may follow in pursuit of its own Lean transformation.
ing the organization for change by focusing on organizational and people
related rather than technology-related. In fact, Lean is mostly about people
Enterprise Level
Transformation Plan
Lean
Transformation
Framework
here. It illustrates a general “flow” of actions, decisions, and initiatives that
Detailed Corrective
Action Indicators
Detailed Lean Vision
The most formidable obstacles on the road to Lean are likely to be people-
© Copyright Massachusetts Institute of Technology, 2000
The complete Enterprise-Level Transition-to-Lean Roadmap is reconstructed
Outcomes on
Enterprise Metrics
Environmental
Corrective Action
Indicators
Initial
Lean
Vision
Enterprise Level Roadmap
Figure 8
Bringing it All Together: The Complete Roadmap
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become an integral part of the Enterprise’s success strategy. Also, the significant impact that Lean implementation is now having on total Enterprise
performance can be reflected in future strategic opportunities and plans.
has now been accomplished. Lean has become the fundamental, collective
mental mindset of the Enterprise. However, it is important that new
Enterprise leaders and senior managers individually enter the “Adopt Lean
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back to “Enterprise Strategic Planning,” now called the Reentry Cycle. This
The Roadmap now includes a feedback loop from the Short Term Cycle
Lean paradigm.
Enterprise delivers value to its customers.
© Copyright Massachusetts Institute of Technology, 2000
ongoing and never-ending process of continually fine-tuning the way the
Enterprise Strategic Planning and Lean are now linked explicitly to the
basis, and acknowledging that ultimately the Lean transformation will
diagram eliminates the segment called “Adopt Lean Paradigm,” since this
Paradigm” block, so that they understand and enthusiastically embrace the
are being accumulated in the Enterprise Knowledge Base on an ongoing
becomes a “way of life” — the way things are done. This final Roadmap
Enterprise Level
Transformation Plan
Lean
Transformation
Framework
illustrates the important concept of capitalizing on “lessons learned” that
Detailed Corrective
Action Indicators
Detailed Lean Vision
Once there is a “critical mass” of Lean behavior in the Enterprise, Lean
Outcomes on
Enterprise Metrics
Environmental
Corrective Action
Indicators
Response to the voice
of the customer
Bringing it All Together: The Ongoing Lean Enterprise
© Copyright Massachusetts Institute of Technology, 2000
Page 125 of ?
Appendix D – Comparison of LESAT to Other
Assessment Approaches
This appendix presents comparisons of LESAT to other approaches that are currently being used to evaluate the overall performance of organizations.
The first set of tables compares LESAT to the Malcolm Baldrige Criteria and the ISO 9004 Quality Management
Systems Guidelines.
The second set of tables compares LESAT to the European Foundation for Quality Management Excellence Model
criteria. This comparison was performed by Dr. Martin Womersley of the University of Warwick and the U.K. Lean
Aerospace Initiative and is included here with permission.
Baldrige National Quality Program 2001 Criteria for Performance Excellence and ISO
9004:2000 Quality Management Systems-Guidelines
A comparison of the practices of the LESAT self-assessment tool was performed against the Baldridge
categories/items and the ISO 9004 guideline paragraphs. The purpose of the review was to highlight areas of
commonality and also to demonstrate that there are areas that the LESAT practices address that are not covered by
the other standards. Each of the models may be used by an organization simultaneously without detriment because
of the different focus being applied in each model. LESAT is the only model specifically targeting the highest levels
of management and the practices associated with the transformation to a Lean enterprise. An enterprise that develops and deploys lean practices should find that their Baldridge assessment scores would improve significantly. The
enterprise will also improve the overall quality of their processes with an attendant increase in effectiveness and efficiency. It is also significant that there are no areas or practices where there is a conflict.
The below comparisons are by no means definitive. Different organizations performing the same comparison might
record slight differences in the paragraphs referenced against the lean practices since each model will be interpreted and applied as most appropriate for that enterprise.
Page 126
of ? Massachusetts Institute of Technology, 2001
© Copyright
© Copyright Massachusetts Institute of Technology, 2000
Page 126 of 166
Comparison of Lean Enterprise Self-Assessment Tool (LESAT) with Baldridge National Quality Program 2001
Criteria for Performance Excellence and ISO 9004:2000 Quality management systems-Requirements
LESAT
Baldridge
ISO 9004:2000
I.A. Enterprise Strategic Planning
I.A.1 Integration of Lean in Strategic Planning Process
I.A.2 Focus on Customer Value
I.A.3 Leveraging the Extended Enterprise
2.1.a,b
3.1.a.(2)
NSA*
5.4; 5.6
5.2; 7.2; 8.2.1.2
6.6
I.B. Adopt Lean Paradigm
I.B.1 Learning and Education in Lean for Enterprise Leaders
I.B.2 Senior Management Commitment
I.B.3 Lean Enterprise Vision
I.B.4 A Sense of Urgency
5.2.a.(3)
1.1.a.(1)&(2)
1.1.a.(1)
1.1.b.(1)
6.2.2
5.1.1; 5.1.2
5.1.1
5.1
I.C. Focus on the Value Stream
I.C.1 Understanding the Current Value Stream
I.C.2 Enterprise Flow
I.C.3 Designing the Future Value Stream
I.C.4 Performance Measures
NSA*
NSA*
NSA*
1.1.b.(1); 2.2.a.(4); 4.1.a
5.1.2; 7.1
5.1.2; 7.1
7.1
5.1.1; 8.2
I.D. Develop Lean Structure and Behavior
I.D.1 Enterprise Organizational Structure
I.D.2 Relationships Based on Mutual Trust
I.D.3 Open and Timely Communication
I.D.4 Employee Empowerment
I.D.5 Incentive Alignment
I.D.6 Innovation Encouragement
I.D.7 Lean Change Agents
NSA*
NSA*
NSA*
1.1.a.(2)
5.1.a.(3)
1.1.b.(2); 5.1.a.(1)
NSA*
NSA*
5.2; 5.3.3; 6.6
5.1.1; 5.2.2; 5.3.3
5.5.1; 6.2.1;8.5.4
NSA*
6.2.1; 8.5.4
NSA*
I.E. Create and Refine Transformation Plan
I.E.1 Enterprise Level Lean Implementation Plan
I.E.2 Commit Resources for Lean Implementation
I.E.3 Provide Education and Training
NSA*
NSA*
5.2 (all)
5.4.2
6
6.2.2
I.F. Implement Lean Initiatives
I.F.1Development of Detailed Plans Based on Enterprise Plan
I.F.2 Tracking Detailed Implementation
NSA*
2.2.a.(1)
2.2.a.(4)
NSA*
8.4
I.G. Focus on Continuous Improvement
I.G.1 Structured Continuous Improvement Processes
I.G.2 Monitoring Lean Progress
I.G.3 Nurturing the Process
I.G.4 Capturing Lessons Learned
I.G.5 Impacting Enterprise Strategic Planning
NSA*
1.1.b.(2)&(3); 2.2.b.(3)
1.1.a.(2)
NSA
2.1 all
8.5.4
5.1; 8.4
5.1; 8.5.4
5.2.4;
5.6.1; 5.6.2; 5.6.3
Section I- Lean Transformation/Leadership
* Not specifically addressed (NSA)
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© Copyright Massachusetts Institute of Technology, 2000
© Copyright Massachusetts Institute of Technology,
2001127
Page
of ?
LESAT
Baldridge
ISO 9004:2000
6.2.a.(6)
6.1.b.(5); 6.2.a.(6); 6.3.a.(7);
4.1.a&b;
NSA*
5.6.3; 7.2
6; 8.2.4; 8.5.4
5.6.3; 6.1.2; 7.1.3; 7.3.1
6.1.2; 7.3
3.1.a
NSA*
5.2.2; 7.2; 7.3
8.2.3; 8.4; 8.5.3
6.1.a; 6.2.a.2; 6.3.a
6.1; 6.2; 6.3
5.2; 7.2; 7.3
6.6; 7.2; 7.3
6.1; 6.2;.6.3
6.1.2;
II.D.3 Foster Innovation and Knowledge-sharing throughout the Supplier Network
2.1.a.(2); 7.4.a.(1)
6.1.b.(3)&(5); 6.2.a.(4);
7.4.a.(1)
6.2.a.(2)
5.2.2; 5.6.2; 6.6;7.4
5.2.2; 5.6.2; 6.6; 8.2.4;
8.4
6.6; 7.4; 8.2.4
II.E Produce Product
II.E.1 Utilize Production Knowledge and Capabilities for Competitive Advantage
II.E.2 Establish and Maintain a Lean Production System
1.1.b; 6.1.b.(3)&(5)
6.1.b.5
7.1.2; 8.2.2; 8.4; 8.5.2
7.1.3; 7.2; 8.2.2
3.1; 7.2
6.1.b.(2)&(5)
3.1a.(2); 6.1.b.(5)
7.2; 8.2.1.2
NSA*
5.2; 5.6; 7.2; 8.2
NSA*
7.2; 7.3
III.A. Lean Organization Enablers
III.A.1 Financial System Supports Lean Transformation
III.A.2 Enterprise Stakeholders Pull Required Financial Measures
III.A.3 Promulgate the Learning Organization
III.A.4 Enable the Lean Enterprise with IT Systems and Tools
III.A.5 Integration of Environmental Protection, Health and Safety into the Business
7.2.a
4.2.a.1&7.2.a
5.1.a.(5)&5.2 all
4.2 all
5.3.a.&1.2 all
6.8; 8.2.1.4
6.8; 8.2.1.4; 8.2.4; 8.4
5.4; 6.1; 6.2; 7.1; 8.5.4
6.1.2; 6.3; 6.5
5.2.2; 5.2.3; 6.3
III.B Lean Process Enablers
III.B.1 Process Standardization
III.B.2 Common Tools and Systems
III.B.3 Variation Reduction
6.1&6.3
NSA*
6.1
7.1.2; 7.1.3; 7.5; 8.1
4.1; 5.4; 7.1; 7.3; 6.6
8.4; 8.5
Section II-Life-Cycle Processes
II.A. Business Acquisition and Program Management
II.A.1 Leverage Lean Capability for Business Growth
II.A.2 Optimize the Capability and Utilization of Assets
II.A.3 Provide Capability to Manage Risk, Cost, Schedule and Performance
II.A.4 Resource and Empower Program Development Efforts
II.B. Requirements Definition
II.B.1 Establish a Requirement Definition Process to Optimize Life-cycle Value
II.B.2 Utilize Data from the Extended Enterprise to
Optimize Future Requirements Definitions
II.C Develop Product and Process
II.C.1 Incorporate Customer Value into Design of Products and Processes
II.C.2 Incorporate Downstream Stakeholder Values (Manufacturing, Support, etc.)
into Products and Processes
II.C.3 Integrate Product and Process Development
II.D. Supply Chain Management
II.D.1 Define and Develop Supplier Network
II.D.2 Optimize Network-wide Performance
II.F Distribute and Service Product
II.F.1 Align Sales and Marketing to Production
II.F.2 Distribute Product in Lean Fashion
II.F.3 Enhance Value of Delivered Products and Services
to Customers and the Enterprise
II.F.4 Provide Post-Delivery Service, Support and Sustainability
Section III-Enabling Infrastructure
* Not specifically addressed (NSA)
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© Copyright
© Copyright Massachusetts Institute of Technology, 2000
Page 128 of 166
Note 1: Comparison of LESAT to Baldridge: LESAT is focused on the use of ‘lean’ principles and practices
to achieve the best value for the enterprise and its stakeholders. LESAT was written to emphasize the lean principles and practices, recognizing that they must be used in conjunction with good business practices to achieve the
optimal value. Baldridge does not have a “lean” practice and principal focus. The Baldridge criteria are built on
a set of interrelated Core Values and Concepts embedded in the beliefs and behaviors of high-performing organizations. These beliefs and behaviors would of course include “lean” practices and behaviors but are not written
using the LAI lean terms and definitions. They both are meant to assess and encourage continual organizational
improvement. The comparison was performed by evaluating the 18 Item descriptions and 29 areas of Baldridge
to the practices and maturity levels of the LESAT. In some cases the wording was very similar, while in others the
Baldridge wording was different but the same intent could be derived. Credit was given if there was partial mapping. It was also found that in some cases where Not Specifically Addressed (NSA) was indicated that the Baldridge
explanatory comments might encompass the lean practice but the item and area words did not. There were no
areas where the LESAT and Baldridge disagreed since they were both accepting of innovation and different
approaches if positive results could be attained.
Note 2: Comparison of LESAT to ISO 9004:2000: ISO 9004, Quality management systems- Guidelines for
performance improvements gives guidance on a wide range of objectives for a quality management system and is
written with an emphasis on developing, implementing and improving the effectiveness and efficiency of the quality
system. It promotes a process approach and a global view of quality management systems that encompass the entire
enterprise. Additionally, ISO 9004 promotes a self-assessment by management for use in continual improvement.
This focus clearly aligns with the intent of the practices of the LESAT self-assessment tool. ISO 9004 utilizes a different set of terminology than LESAT but does encourage the adoption of practices and behaviors that are similar to
those included in “lean”. ISO 9004 is based on the following eight quality management principle: Customer focus,
leadership, involvement of people, process approach, systems approach to management, continual improvement, factual approach to decision making, and mutually beneficial supplier relationships. These are also consistent with the
LESAT tool. The comparison revealed a great similarity in the topics covered but LESAT had practices and maturity
level considerations that were not addressed by the ISO standard. There is no conflict between the two and they are
in fact complementary.
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Attachment 1a and 1b: Contents lists for Baldridge and ISO 9004:
These attachments contain the paragraph headings for the Baldridge and ISO 9004 documents.
Attachment 1a
Baldridge National Quality Program, Criteria for Performance Excellence, -Item Listing:
1 Leadership
Organizational Leadership
Public Responsibility and Citizenship
2 Strategic Planning
2.1 Strategy Development
2.2 Strategy Deployment
3 Customer and Market Focus
3.1 Customer and Market Knowledge
3.2 Customer Relationships and Satisfaction
4 Information and Analysis
4.1 Measurement and Analysis of Organizational Performance
4.2 Information Management
5 Human Resource Focus
5.1 Work Systems
5.2 Employee Education, Training and Development
5.3 Employee Well-Being and Satisfaction
6 Process Management
6.1 Product and Service Processes
6.2 Business Processes
6.3 Support Processes
7 Business Results
7.1 Customer-Focused Results
7.2 Financial and Market Results
7.3 Human Resource Results
7.4 Organizational Effectiveness Results
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Attachment 1b
ISO 9004, Quality management systemsGuidelines for performance improvementsContents:
1 Scope
6.4 Work environment
2 Normative Reference
6.5 Information
3 Terms and definitions
6.6 Suppliers and partnerships
4 Quality management system
6.7 Natural resources
4.1 Managing systems and processes
6.8 Financial resources
4.2 Documentation
7 Product realization
4.3 Use of quality management principles
7.1 General guidance
5 Management responsibility
7.2 Processes related to interested parties
5.1 General guidance
7.3 Design and development
5.2 Needs and expectations of interested parties
7.4 Purchasing
5.3 Quality policy
7.5 Production and service operations
5.4 Planning
7.6 Control of measuring and monitoring devices
5.5 Responsibility, authority and communication
8 Measurement, analysis and improvement
5.6 Management review
8.1 General guidance
6 Resource management
8.2 Measurement and monitoring
6.1 General guidance
8.3 Control of nonconformity
6.2 People
8.4 Analysis of data
6.3 Infrastructure
8.5 Improvement
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European Foundation for Quality Management (EFQM) Excellence Model (EM)
The cross-comparison shown here provides companies with a common starting point for the adoption of LESAT in
a business excellence environment, as defined by the European Foundation for Quality Management (EFQM). This
is intended to facilitate the use of the information contained in LESAT in either a business excellence environment or
ease the transition between the two models. In the former case the business excellence assessment criteria can be
supplemented by LESAT practices important for a transition to lean and the five competence levels for each practice
used to help define long and short-term targets. In the later case a company using LESAT can display their lean competence in an EFQM format if desired by an external supplier / customer.
Our conclusions of the significant and subsidiary relationships that exist between the EFQM Excellence Model and
LESAT are shown in a comparison grid and practice table below. Where the primary intent or focus of a LESAT
practice matches with an EFQM practice, the relationship is marked in black text or by a black square. Where the
primary intent of a LESAT practice does not match directly with an EFQM practice, but strongly influences the
achievement of success of that practice, the relationship is marked in gray text or by a gray square.
1. Leadership (10%)
EFQM Criteria
EFQM EM vs. LESAT Practice Table
EFQM Practices
Related LESAT Practices
1a. Leaders develop the mission,
vision and values and are role models of a culture of excellence.
I.B.1. Learning and education in “lean” for enterprise leadership
I.B.3. Lean enterprise vision
I.B.4. A sense of urgency
1b. Leaders are personally involved
in ensuring the organization’s management system is developed, implemented and continually improved.
I.D.1. Enterprise organizational orientation
I.D.2. Relationships based on mutual trust
I.D.3. Open and timely communications
I.F.2. Tracking detailed implementation
I.G.1. Structured continuous improvement process
II.A.3. Provide capability to manage risk, cost, schedule and performance
II.A.4. Allocate Resources for program development efforts
I.B.1. Learning and education in “lean” for enterprise leadership
I.G.2. Monitoring lean progress
III.B.1. Process standardization
1c. Leaders are involved with their
customers, partners and representatives of society.
II.C.2. Incorporate downstream stakeholder values into products and
processes
1d. Leaders motivate, support and
recognize the organization’s people.
I.B.2. Senior management commitment
I.G.3. Nurturing the process
I.B.4. A sense of urgency
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EFQM Criteria
EFQM Practices
2a. Policy and strategy are based I.A.1. Integration of lean in strategic planning process
on the present and future needs I.A.2. Focus on customer value
I.E.1. Enterprise level lean transformation plan
and expectations of stakeholders.
II.D.1. Define and develop supplier network
II.A.1. Leverage lean capability for business growth
II.D.3. Foster innovation and knowledge-sharing throughout the supplier
network
2b. Policy & strategy are based on
information from performance
measurement, research, learning
and creativity related activities.
2. Policy & Strategy (9%)
Related LESAT Practices
I.G.5. Impacting enterprise strategic planning
I.C.4. Performance measures
I.E.1. Enterprise level lean transformation plan
II.A.1. Leverage lean capability for business growth
II.D.2. Optimize network-wide performance
III.A.3. Promulgate the learning organization
2c. Policy & strategy are devel- II.A.1. Leverage lean capability for business growth
oped, reviewed and, updated. II.E.1. Utilize production knowledge and capabilities for competitive advantage
I.G.2. Monitoring lean progress
III.B.2. Common tools and systems
I.A.1. Integration of lean in strategic planning process
I.A.3. Leveraging the extended enterprise
III.B.1. Process standardization
2d. Policy & strategy are deployed I.E.2. Commit resources for lean improvements
through a framework of key I.E.3. Provide education and training
2e. Policy & strategy are communicated and implemented.
processes.
I.F.1. Development of detailed plans based on enterprise plan
3. People (8%)
3a. People resources are planned, II.A.2. Optimize the capability and utilization of assets
I.F.1. Development of detailed plans based on enterprise plan
managed and improved.
II.A.4. Allocate Resources for program development efforts
II.C.3. Integrate product and process development
3b. People’s knowledge and III.A.3. Promulgate the learning organization
competencies
are
identified, I.D.7. Lean change agents
I.E.3. Provide education and training
developed and sustained.
3c. People are involved and empow- I.D.6. Innovation encouragement
ered. I.D.4. Employee empowerment
3d. People and the organization I.D.2. Relationships based on mutual trust
have a dialogue.
I.D.3. Open and timely communications
3e. People are rewarded, recog- I.G.3. Nurturing the process
nized and cared for. I.D.5. Incentive
alignment
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EFQM Criteria
EFQM Practices
4a. External partnerships
are managed.
Related LESAT Practices
I.A.3. Leveraging the extended enterprise
II.D.2. Optimize network-wide performance
I.D.2. Relationships based on mutual trust
I.D.3. Open and timely communications
II.A.4. Allocate Resources for program development efforts
II.C.2. Incorporate downstream stakeholder values into products and processes
II.D.1. Define and develop supplier network
4b. Finances are managed. I.C.4. Performance measures
I.E.2. Commit resources for lean improvements
III.A.1. Financial system supports lean transformation
III.A.2. Enterprise stakeholders pull required financial information
4. Partnership & Resources (9%)
4c. Building equipment and II.A.2. Optimize the capability and utilization of assets
material are managed.
II.F.2. Distribute product in lean fashion
I.C.2. Enterprise flow
II.E.2. Establish and maintain a lean production system
4d. Technology is managed. II.A.3. Provide capability to manage risk, cost, schedule and performance
II.D.3. Foster innovation and knowledge-sharing throughout the supplier network
4e. Information and
knowledge are managed.
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I.G.4. Capturing lessons learned
II.B.2. Utilize data from the extended enterprise to optimize future requirement
definitions
II.D.3. Foster innovation and knowledge-sharing throughout the supplier network
II.F.1. Align sales and marketing to production
III.A.2. Enterprise stakeholders pull required financial information
I.C.2. Enterprise flow
II.A.4. Allocate Resources for program development efforts
II.C.2. Incorporate downstream stakeholder values into products and processes
II.C.3. Integrate product and process development
II.F.4. Provide post delivery service, support and sustainability
III.A.1. Financial system supports lean transformation
III.A.4. Enable the lean enterprise with information systems and tools
III.B.2. Common tools and systems
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5. Processes (14%)
EFQM Criteria
EFQM Practices
Related LESAT Practices
5a. Processes are systematically designed and managed.
I.C.1. Understanding the current value stream
I.C.3. Designing the future value stream
I.C.4. Performance measures
II.C.3. Integrate product and process development
II.E.2. Establish and maintain a lean production system
II.F.3. Enhance value of delivered products and services to customers and the enterprise
III.A.1. Financial system supports lean transformation
III.A.4. Enable the lean enterprise with information systems and tools
III.A.5. Integration of environmental protection, heath and safety into the business
I.G.1. Structured continuous improvement process
II.B.1. Establish a requirement definition process to optimize lifecycle value
5b. Processes are improved
as needed using innovation
in order to fully satisfy and
generate increasing value
for customers and other
stakeholders.
I.C.2. Enterprise flow
I.C.3. Designing the future value stream
I.D.6. Innovation encouragement
I.D.7. Lean change agents
III.B.1. Process standardization
III.B.3. Variation reduction
I.A.2. Focus on customer value
I.C.1. Understanding the current value stream
I.F.1. Development of detailed plans based on enterprise plan
III.A.5. Integration of environmental protection, heath and safety into the business
5c. Products and services
are designed and developed based on customer
needs and expectations.
II.B.1. Establish a requirement definition process to optimize lifecycle value
II.C.1. Incorporate customer value into design of products and processes
II.C.2. Incorporate downstream stakeholder values into products and processes
II.B.2. Utilize data from the extended enterprise to optimize future requirement definitions
III.A.5. Integration of environmental protection, heath and safety into the business
III.B.2. Common tools and systems
5d. Products and services
are produced, delivered
and serviced. II.F.4. Provide
post delivery service, support and sustainability
II.D.2. Optimize network-wide performance
II.E.2. Establish and maintain a lean production system
II.F.1. Align sales and marketing to production
II.F.2. Distribute product in lean fashion
II.F.3. Enhance value of delivered products and services to customers and the enterprise
III.B.2. Common tools and systems
5e. Customers relations are
managed & enhanced.
I.D.2. Relationships based on mutual trust
I.D.3. Open and timely communications
II.C.1. Incorporate customer value into design of products and processes
II.F.3. Enhance value of delivered products and services to customers and the enterprise
II.F.4. Provide post delivery service, support and sustainability
6.
Customer
6a. Perception Measures.
I.C.4. Performance measures
III.A.1. Financial system supports lean transformation
Results
6b. Performance Indicators
(internal indictors)
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EFQM
Criteria
EFQM Practices
7. People
Results
(9%)
7a. Perception Measures.
8. Society
Results
(6%)
8a. Perception Measures.
Related LESAT Practices
I.C.4. Performance measures
III.A.1. Financial system supports lean transformation
7b. Performance Indicators
(internal indictors)
8b. Performance Indicators
(internal indictors)
I.C.4. Performance measures
III.A.1. Financial system supports lean transformation
II.D.2. Optimize network-wide performance
9a. Key performance outcomes. I.F.2. Tracking detailed implementation
9. Key
Performance
I.G.2. Monitoring lean progress
Results (15%)
9b. Key performance indicators I.C.4. Performance measures
(internal indictors)
III.A.1. Financial system supports lean transformation
Reference:
“Introducing Excellence” European Foundation for Quality Management,
2001
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Appendix E – LESAT Assessment Aids
E.1 - Sample Agenda and Guidelines for Enterprise LESAT Sessions
E.2 - LESAT Summary Sheets
- Single Page Summary Sheet
- Multiple Page Summary Sheet
E.3 - LESAT Calculator for Data Entry/Consolidation
E.4 - Site Visit Alternatives for Analyzing and Displaying Data
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E.1 - Sample Agenda and Guidelines
for Enterprise LESAT Sessions
On the following pages are sample agendas and guidelines prepared by one of the LAI
consortium member companies during the LESAT Beta testing in the spring of 2001.
All information that might identify the company has been removed. Some of the information references the LESAT Beta version and may not agree with page numbers, section numbers, etc. of LESAT Version 1.0.
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Guidelines for LESAT Kickoff Meeting
Preparation
Make sure meeting is set up to include the Business Unit Executive and the Level I and the Level II Managers
Schedule the meeting for 2 hours.
Decide ahead of time with the Lean director whether the level II’s should complete the scoring form on line,
or on paper.
Review meeting with Lean director.
Make sure the Lean director knows that the data will come back to them and that they should put it together. Assist as needed.
Make sure you or the Lean director have prepared packets (LESAT Materials) for each level II. The packets
should include:
1 copy of the scoring sheets (Part V LESAT Assessment Aids)
1 copy of the Lean assessment guidelines ( our document)
# of copies of LESAT booklet. Number defined by number of reports the level II will have at the
assessment meeting.
1 set of instructions for completing the assessment
1 clear schedule of the delivery dates and the dates of the final meeting
Running the meeting
1. At the meeting use the following agenda:
Opening remarks
Slide presentation of what the tool is and why we use it
Outline booklet and score keeping methods (elec. or paper)
Review logistics, where to send scores, when, etc.
Things to remember
In the opening remarks make sure they understand that this assessment is being done to prepare them for
their input to their 2002 Lean plan that we will be reviewing with their Manager in August.
During the slides show the other companies who contributed to the assessment, how the pages are arranged,
and how to do the scoring. I have a good set of the materials, come by and borrow them.
Depending on whether the Lean director wants electronic responses or paper, instruct the level II’s in how to
complete and return the score.
Put the onus on the Lean director to tabulate the scores and take care of the data. Let’s get them thinking of
this as their assessment.
Give them a clear idea of the deliverable dates.
Remember to offer help with their questions later.
Refer to the Lean assessment guidelines, make sure everyone agrees on the meaning of the terms.
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Instructions for Completing LESAT Assessment
Notes:
Determine time for team to meet. One or more meetings may be required. Total time usually takes approx.
5-8 hours.
The tool has three sections. Section I has 28 items, Section II has 18 items, and Section III has 8 items.
Refer to the Lean assessment guidelines for definitions and scoring conventions.
Provide everyone with copies of the LESAT (lean enterprise self-assessment tool) Version 1.0. They will need
this to read from.
Section I begins on page 15 of the LESAT
Section II begins on page 32 of the LESAT
Section III begins on page 43 of the LESAT
The assessment:
Complete the assessment by sections.
Read the Lean attribute, diagnostic questions, and Lean indicators.
Then read the Lean practices and descriptions of levels 1-5 for that particular practice.
Discuss the levels among the group and develop consensus on a score.
Record the score in the appropriate location in the scoring sheets. Be sure to place the actual score in the
present level location.
Discuss and reach consensus on the desired level and record that score in the position for desired in the
scoring sheet.
Record evidence for your scores in the area provided in the scoring sheets.
Complete the scoring for each of the Lean practices in the section.
Once the scores are entered for a section, determine the averages for that section and record in the appropriate spot in the scoring sheets.
Develop and record some ideas for suggested actions for making improvements for your business units.
Continue to work by sections until complete.
Send the finished data to (Name of Lean Facilitator)
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Guidelines for LESAT Wrap-up Meeting
Preparation
Have Lean director set up logistics, room, food, etc.
Plan on 6 hours with the following general agenda:
7:30-7:45
Introductions/overview of the day
7:45-9:00
Compositing score of section 1
9:00-9:15
Break
9:15-10:30
Compositing score of section 2
10:30-11:00
Compositing of section 3
11:00-12:00
Review of suggested improvements
12:00-12:45
Lunch
12:45-1:30
Review of overall composite data
1:30-2:30
Align with 2002 Lean plan/next steps
Work with the Lean director to determine presentation of composite data and improvement ideas. Some
groups have graphs or spreadsheets, etc.
It is a good idea to composite the suggested improvements from the scoring sheet to speed the meeting
Running the meeting
1. Follow the agenda
2. Get a consensus
3. Make sure they understand that this is their tool for preparing 2002 plan
4. Ask for feedback on the assessment process
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Agenda for LESAT Wrap-up Meeting
7:30-7:45
Introductions/overview of the day
7:45-9:00
Compositing score of Section 1
9:00-9:15
Break
9:15-10:30
Compositing score of Section 2
10:30-11:00
Compositing of Section 3
11:00-12:00
Review of suggested improvements
12:00-12:45
Lunch
12:45-1:30
Review of overall composite data
1:30-2:30
Align with 2002 Lean plan/next steps
Section 1 has 28 items
Section 2 has 18 items
Section 3 has 8 items
My initial take is that we crunch the data from the 5-6 different groups, facilitating it tightly to a schedule that allows
a maximum of 5 minutes discussion per item. Then we run the rest similar to a value stream future state. We brainstorm what we learned from the assessment and then tie it into an overall Lean plan for the Business Unit for fiscal
2002. Now we are doing the assessment 4 months prior to the start of fiscal 2002, so we may want to amend it
to final quarter 2001 and all of 2002.
Compositing- each of the direct reports will have a score sheet covering all of the Business Unit. So if we ask each
of the 6 managers to give their scores, write them down and then allow 2-3 minutes resolution discussion, we can
move through the items in a timely manner. Each person can keep score as we go along.
Brainstorming- having just finished the assessment, we can move into trying to isolate the 2-3-4-? areas that we
need to focus on to make credible improvements in the next 15 months. Not too detailed, but to a degree where
this group of leaders can verbalize in their minds what the whole BU is going to try and improve.
Next steps- A discussion to mate together the areas for improvement, with their existing Lean plan (for alignment),
followed by a plan for modifying/developing a plan of value streams/Lean events to pursue over the 15 months,
with a clear set of metrics to follow to determine success or midstream changes needed.
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E.2 - LESAT Summary Sheets
The LESAT summary sheets provide a means for organizing the LESAT results into a comprehensive list for review
by the enterprise leadership. In this section of Appendix D two options are presented as helpful ways of summarizing the LESAT data. The first option is a single page summary that contains all of the LESAT practices. The lean practice and the average current enterprise level for each practice are presented. The use of scoring bins allows the entry
of the data to act as a visual indicator of where the enterprise ranks itself high or low in the assessment process.
While the type is small on this page, it can easily be enlarged to fit an 11” x 17” sheet and has the benefit of being
a single piece of paper to carry around. A blank version of this single page summary sheet and a sample version
with some example data are provided for your convenience.
The second option presented in this section is a multiple page version of the summary sheet. This option has the benefit of containing the current and desired results along with a characteristic indicator for each practice. This helps
the enterprise leaders understand what characteristic they should be trying to achieve in their transformation
process. Additionally, the use of multiple pages makes the document easier to read due to the larger print than in
the single page version discussed above. The downside to this option is that it requires multiple pages to account
for all of the data. A blank version of the multiple page summary sheet and a sample version with some example
data are also included in this section.
© Copyright Massachusetts Institute of Technology, 2001
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I.G.5. Impacting enterprise strategic planning
I.G.4. Capturing lessons learned
I.G.3. Nurturing the process
I.G.2. Monitoring lean progress
I.G.1. Structured continuous improvement processes
I.F.2. Tracking detailed implementation
I.F.1. Development of detailed plans based on enterprise plan
I.E.3. Provide education and training
I.E.2. Commit resources for lean improvements
I.E.1. Enterprise-level lean transformation plan
I.D.7. Lean change agents
I.D.6. Innovation encouragement
I.D.5. Incentive alignment
I.D.4. Employee empowerment
I.D.3. Open and timely communications
I.D.2. Relationships based on mutual trust
I.D.1. Enterprise organizational orientation
I.C.4. Performance measures
I.C.3. Designing future value stream
I.C.2. Enterprise flow
I.C.1. Understanding the current value stream
I.B.4. A sense of urgency
I.B.3. Lean enterprise vision
I.B.2. Senior management commitment
I.B.1. Learning and education in “lean” for enterprise leadership
I.A.3. Leveraging the extended enterprise
Level
1
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All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
I.G. Focus on
Continuous
Improvement
I.F. Implement
Lean Initiatives
I.E. Create & Refine
Transformation
Plan
I.D. Develop Lean
Structure &
Behavior
I.C. Focus on the
Value Stream
I.B. Adopt Lean
Paradigm
I.A.1. Integration of lean in strategic planning process
I.A. Enterprise
Strategic
Planning
I.A.2. Focus on customer value
Lean Practices
Sub-Sections
LESAT SUMMARY SHEET
(I) LEAN TRANSFORMATION / LEADERSHIP
Level
2
Level
4
Level
5
LESAT SUMMARY SHEET
Level
3
Lean Competence
I.G.5. Impacting enterprise strategic planning
I.G.4. Capturing lessons learned
I.G.3. Nurturing the process
I.G.2. Monitoring lean progress
I.G.1. Structured continuous improvement processes
I.F.2. Tracking detailed implementation
I.F.1. Development of detailed plans based on enterprise plan
I.E.3. Provide education and training
I.E.2. Commit resources for lean improvements
I.E.1. Enterprise-level lean transformation plan
1.9
1.5
1.3
1.3
1.4
1.2
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2.7
2.2
2.4
2.2
2.9
I.D.6. Innovation encouragement
I.D.7. Lean change agents
2.3
I.D.5. Incentive alignment
1.9
I.D.4. Employee empowerment
2.0
1.8
I.D.2. Relationships based on mutual trust
I.D.3. Open and timely communications
2.1
2.7
I.C.4. Performance measures
I.D.1. Enterprise organizational orientation
2.2
I.C.3. Designing future value stream
I.C.2. Enterprise flow
I.C.1. Understanding the current value stream
1.4
2.0
I.B.4. A sense of urgency
2.1
I.B.3. Lean enterprise vision
1.9
1.8
2.4
2.6
Level
2
3.2
3.1
3.2
Level
4
Level
5
LESAT SUMMARY SHEET
Level
3
Lean Competence
I.B.2. Senior management commitment
I.B.1. Learning and education in “lean” for enterprise leadership
I.A.3. Leveraging the extended enterprise
Level
1
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
I.G. Focus on
Continuous
Improvement
I.F. Implement
Lean Initiatives
I.E. Create & Refine
Transformation
Plan
I.D. Develop Lean
Structure &
Behavior
I.C. Focus on the
Value Stream
I.B. Adopt Lean
Paradigm
I.A.1. Integration of lean in strategic planning process
I.A. Enterprise
Strategic
Planning
I.A.2. Focus on customer value
Lean Practices
Sub-Sections
LESAT SUMMARY SHEET
(I) LEAN TRANSFORMATION / LEADERSHIP
III.B.3. Variation reduction
III.B.2. Common tools and systems
III.B.1. Process standardization
III.A.5. Integration of environmental protection, heath and safety into the business
III.A.4. Enable the lean enterprise with information systems and tools
III.A.3. Promulgate the learning organization
III.A.2. Enterprise stakeholders pull required financial information
III.A.1. Financial system supports lean transformation
II.F.4. Provide post delivery service, support and sustainability
II.F.3. Enhance value of delivered products and services to customers & the enterprise
II.F.2. Distribute product in lean fashion
II.F.1. Align sales and marketing to production
II.E.2. Establish and maintain a lean production system
II.E.1. Utilize production knowledge and capabilities for competitive advantage
II.D.3. Foster innovation and knowledge-sharing throughout the supplier network
II.D.2. Optimize network-wide performance
II.D.1. Define and develop supplier network
II.C.3. Integrate product and process development
II.C.2. Incorporate downstream stakeholder values into products and processes
II.C.1. Incorporate customer value into design of products and processes
II.B.2. Utilize data from extended enterprise to optimize future requirement definitions
II.B.1. Establish a requirement definition process to optimize lifecycle value
II.A.4. Allocate resources for program development efforts
II.A.3. Provide capability to manage risk, cost, schedule and performance
Level
1
Page 146 of 166
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
III.B.Lean Process
Enablers
III.A.Lean
Organizational
Enablers
II.F. Distribute &
Service Product
II.E. Produce
Product
II.D. Manage
Supply Chain
II.C. Develop
Product &
Process
II.B. Requirements
Definition
II.A.1. Leverage lean capability for business growth
II.A. Business
Acquisition and
Program
Management
II.A.2. Optimize the capability and utilization of assets
Lean Practices
Sub-Sections
LESAT SUMMARY SHEET
(II) LIFE-CYCLE PROCESSES
(III) ENABLING
INFRASTRUCTURE
Level
2
Level
4
Level
5
LESAT SUMMARY SHEET
Level
3
Lean Competence
III.B.3. Variation reduction
1.5
Page 147 of 166
2.1
III.A.5. Integration of environmental protection, heath and safety into the business
III.B.2. Common tools and systems
2.1
III.A.4. Enable the lean enterprise with information systems and tools
1.4
2.4
2.5
III.A.3. Promulgate the learning organization
III.B.1. Process standardization
2.7
III.A.2. Enterprise stakeholders pull required financial information
2.0
2.4
2.0
2.9
1.3
III.A.1. Financial system supports lean transformation
II.F.4. Provide post delivery service, support and sustainability
II.F.3. Enhance value of delivered products and services to customers & the enterprise
II.F.2. Distribute product in lean fashion
II.F.1. Align sales and marketing to production
II.E.2. Establish and maintain a lean production system
II.E.1. Utilize production knowledge and capabilities for competitive advantage
2.1
II.D.3. Foster innovation and knowledge-sharing throughout the supplier network
2.5
2.5
2.9
1.8
1.9
2.4
II.D.2. Optimize network-wide performance
II.D.1. Define and develop supplier network
II.C.3. Integrate product and process development
II.C.2. Incorporate downstream stakeholder values into products and processes
II.C.1. Incorporate customer value into design of products and processes
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
III.B.Lean Process
Enablers
III.A.Lean
Organizational
Enablers
II.F. Distribute &
Service Product
II.E. Produce
Product
II.D. Manage
Supply Chain
II.C. Develop
Product &
Process
II.B.2. Utilize data from extended enterprise to optimize future requirement definitions
1.6
II.A.4. Allocate resources for program development efforts
2.1
2.2
II.A.3. Provide capability to manage risk, cost, schedule and performance
II.B.1. Establish a requirement definition process to optimize lifecycle value
2.5
2.6
II.A.2. Optimize the capability and utilization of assets
II.B. Requirements
Definition
2.3
II.A.1. Leverage lean capability for business growth
II.A. Business
Acquisition and
Program
Management
Level
2
Lean Practices
Level
1
3.1
Level
4
Level
5
LESAT SUMMARY SHEET
Level
3
Lean Competence
Sub-Sections
LESAT SUMMARY SHEET
(II) LIFE-CYCLE PROCESSES
(III) ENABLING
INFRASTRUCTURE
“Unlearning” the old, learning the new
Learning and education in “Lean”
for enterprise leaders
I.B.1
A sense of urgency
Understanding current value stream
Enterprise flow
Designing future value stream
Performance measures
Enterprise organizational orientation
Relationships based on mutual trust
Open and timely communications
Employee empowerment
Incentive alignment
Innovation encouragement
Lean change agents
I.B.3
I.B.4
I.C.1
I.C.2
I.C.3
I.C.4
I.D.1
I.D.2
I.D.3
I.D.4
I.D.5
I.D.6
I.D.7
The inspiration and drivers of change
From risk aversion to risk rewarding
Reward the behavior you want
Decision-making at lowest possible level
Information exchanged when required
“Win-win” vs. “we-they”
Organize to support value delivery
Performance measures drive enterprise behavior
Value stream to meet the enterprise vision
“Single piece flow” of materials and information
How we now deliver value to customers
The primary driving force for Lean
New mental model of the enterprise
Page 148 of 166
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
I.D. Develop Lean
Structure and
Behavior
I.C. Focus on the
Value Stream
Senior management commitment
Lean enterprise vision
I.B.2
Senior management leading it personally
Value stream extends from customer through the
enterprise to suppliers
I.A.3 Leveraging the extended enterprise
I.B. Adopt Lean
Paradigm
Lean impacts growth, profitability and market
penetration
Customers pull value from enterprise value stream
Integration of Lean in
strategic planning process
Focus on customer value
I.A.1
I.A. Enterprise
Strategic Planning
I.A.2
Lean Characteristic
Lean Practice
TTL Link
(2) acquiring competitive advantage and (3) satisfaction of stakeholders.
Process Definition: Develop and deploy lean implementation plans throughout the enterprise leading to (1) long-term sustainability,
SECTION I SUMMARY SHEET - LEAN TRANSFORMATION/LEADERSHIP
LESAT Enterprise Self-Assessment Tool (LESAT)
Desired
SECTION I - LESAT SUMMARY SHEET
Average
Average
Average
Average
Current
CAPABILITY LEVEL
Assessing progress toward achieving enterprise
objectives
Assure executive level involvement
Ensuring that successes lead to more successes
Results lead to strategic opportunities
I.G.2 Monitoring lean progress
I.G.3 Nurturing the process
I.G.4 Capturing lessons learned
I.G.5 Impacting enterprise strategic planning
Page 149 of 166
Average
Average
SECTION I - LESAT SUMMARY SHEET
Uniformity in how we get better
Assessing actual outcomes against goals
I.G.1 Structured continuous
improvement processes
Tracking detailed implementation
I.F.2
Coordinating lean improvements
Just-in-time learning
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
I.G. Focus on
Continuous
Improvement
Development of detailed plans
based on enterprise plan
I.F.1
Provide education and training
I.E.3
I.F. Implement Lean
Initiatives
Commit resources for Lean
improvements
I.E.2
Average
Charting the course across the extended enterprise
Enterprise-level Lean transformation plan
I.E.1
I.E. Create & Refine
Transformation
Plan
Resource provision for lean
Lean Characteristic
Lean Practice
TTL Link
CAPABILITY LEVEL
Current Desired
Section I - Lean Transformation/Leadership Continued… Process Description: Develop and deploy lean implementation plans
throughout the enterprise leading to (1) long-term sustainability, (2) acquiring competitive advantage and (3) satisfaction of stakeholders.
LESAT SECTION I SUMMARY SHEET - Continued
Lean enables business growth through the redeployment
of assets
Success follows effective risk management
Teaming for success
Stakeholder pull vs. technology/product push
II.A.2 Optimize the capability and
utilization of assets
II.A.3 Provide capability to manage risk,
cost, schedule and performance
II.A.4 Allocate resources for program
development efforts
Establish a requirements definition
process to optimize lifecycle value
Utilize data from the extended enterprise to
optimize future requirement definitions
II.B.1
II.B.2
Understanding downstream stakeholders allows value to
flow seamlessly to customer
Breaking down of functional silos enables seamless
communication and value flow
II.C.2 Incorporate downstream stakeholder
values into products and processes
II.C.3 - Integrate product and process development
Page 150 of 166
CAPABILITY LEVEL
Current Desired
SECTION II - LESAT SUMMARY SHEET
Average
Understanding customer value allows continuous
improvement of product and process
II.C.1 Incorporate customer value into design
of products and processes
Average
Closed loop processes are in place to capture operational
performance data
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
II.C. Develop Product
and Process
II.B. Requirements
Definition
Exploiting new business opportunities arising from
lean enabled capabilities
II.A.1 Leverage Lean capability for
business growth
II.A. Business
Acquisition and
Program
Management
Average
Lean Characteristic
Lean Practice
TTL Link
delivery support.
designing products and processes, managing supply chains, producing the product, distributing product and services and providing post
Section II - Life-Cycle Processes Definition: Implement Lean practices across life-cycle processes for defining customer requirements,
SUMMARY SHEET - LESAT SECTION II
Align sales and marketing to production
Distribute product in Lean fashion
Enhance value of delivered products
and services to customers and the enterprise
Provide post delivery service, support
and sustainability
II.F.1
II.F.2
II.F.3
II.F.4
Providing customer solutions
Responding to the voice of the customer
Right product, right quantity at the right time
Matching demand and capabilities
Defect free production pulled by the customer
II.E.2 Establish and maintain a Lean
production system
Page 151 of 166
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
II.F. Distribute and
Service Product
Strategic leveraging of manufacturing capability
II.E.1 Utilize production knowledge and
capabilities for competitive advantage
Incentivizing innovation & technology transfer
II.D.3 Foster innovation and knowledge-sharing
throughout the supplier network
II.E. Produce
Product
Partnering with key suppliers and optimizing processes to
achieve customer value
II.D.2 Optimize network-wide performance
CAPABILITY LEVEL
Current Desired
SECTION II - LESAT SUMMARY SHEET
Average
Average
Average
Core competencies aligned across supplier network
II.D.1 Define and develop supplier network
II.D. Manage
Supply Chain
Lean Characteristic
Lean Practice
TTL Link
viding post delivery support.
requirements, designing products and processes, managing supply chains, producing the product, distributing product and services and pro-
Section II - Life-Cycle Processes Continued… Definition: Implement Lean practices across life-cycle processes for defining customer
SUMMARY SHEET - LESAT SECTION II Continued…
Reduce uncertainty by reducing variation
III.B.3 Variation reduction
Page 152 of 166
Average
Average
CAPABILITY LEVEL
Current Desired
SECTION III - LESAT SUMMARY SHEET
“Cleaner, healthier, safer”
III.A.5 Integration of environmental protection,
health and safety into the business
Assuring compatibility, reducing costs
Facilitate the flow of information and knowledge
III.A.4 Enable the Lean enterprise with
information systems and tools
Strive for consistency and re-use
Learning organizations create a flexible workforce
III.A.3 Promulgate the Learning Organization
III.B.2 Common tools and systems
Data on demand
III.A.2 Enterprise stakeholders pull required
financial information
III.B.1 Process standardization
Lean requires appropriate financial data
Lean Characteristic
III.A.1 Financial system supports
Lean transformation
Lean Practice
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
III.B.Lean Process
Enablers
III.A.Lean
Organizational
Enablers
TTL LInk
the implementation of Lean principles, practices and behavior.
Section III - Enabling Infrastructure Definition: To achieve a successful lean transformation, the enterprise infrastructure must support
SUMMARY SHEET - LESAT SECTION III
E.3 - LESAT Calculator for Data Entry/Consolidation
The LESAT Calculator is a Microsoft Excel® workbook pre-programmed to perform statistical calculations, data
grouping, and graph generation to help enterprise leaders manage and use their LESAT data. The workbook contains seven linked spreadsheets, as follows:
1. Data Entry Sheet
2. Calculator Sheet
3. Current State Summary
4. Desired State Summary
5. Gap Summary
6. Section X.X. Averages
7. Graphs
The Data Entry Sheet is a listing of all of the LESAT practices. The user simply enters the current and desired state
for each respondent (or group representative). The Figure below shows the layout of the Data Entry Sheet.
Section 1 - Lean Transformation Leadership
Respondent/Group Number
TTL Link
I.A.Enterprise
Strategic
Planning
Lean Practice
I.A.1
I.A.2
I.A.3
I.B. Adopt
Lean
Paradigm
I.B.1
I.B.2
I.B.3
I.B.4
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Current
2 2 2 2 2 3 2 3 2 3
2
1
2
3
4
3
2
3
2
1
Desired
5 5 5 5 5 4 4 4 4 4
4
5
4
4
4
5
5
5
5
5
Current
2 1 1 1 1 2 2 2 2 2
2
2
1
1
1
2
2
2
1
2
Desired
5 5 5 4 5 5 5 4 5 5
5
5
5
5
5
4
4
4
4
4
Current
2 3 3 3 4 3 3 3 2 3
2
3
2
2
2
3
3
3
3
3
Desired
5 5 5 4 4 4 5 5 5 5
5
4
4
4
5
5
5
5
5
5
Learning and education in “Lean”
Current
2 2 2 2 2 2 2 1 1 1
1
1
1
2
1
2
1
2
3
2
for enterprise leaders
Desired
4 4 5 4 4 4 4 5 4 4
4
5
4
4
4
4
4
4
4
4
Current
2 2 2 1 1 1 2 2 2 2
2
2
3
2
2
2
1
2
2
2
Desired
4 4 5 4 4 4 5 5 5 5
4
4
4
5
4
4
4
4
4
4
Current
2 1 1 1 2 2 2 1 2 2
2
4
3
3
3
2
2
3
2
3
Desired
4 4 5 4 4 4 5 4 4 4
4
5
5
5
5
5
5
5
5
5
Current
2 1 1 1 1 1 1 1 2 2
2
1
1
1
2
2
2
2
3
2
Desired
4 4 4 4 4 4 5 5 5 5
5
5
4
4
4
5
4
4
4
4
Integration of Lean in strategic planning process
Focus on customer value
Leveraging the extended enterprise
Senior management commitment
Lean enterprise vision
A sense of urgency
The Calculator Sheet is dynamically linked to the Data Entry Sheet and is the main computational spreadsheet in the
workbook. The data is used to generate values for the LESAT gaps and to create tallies of the scores for each LESAT
practice. The tallies are useful for visualizing the spread in the responses and allow for identifying multi-modal distributions in the results. This spreadsheet should not be used for data entry, as it will destroy the formulas that have
been imbedded in the file. The Calculator Sheet presents overall data for each of the LESAT practices as shown in
the figure below:
© Copyright Massachusetts Institute of Technology, 2001s
Page 153 of 166
Section 1 - Lean Transformation Leadership
TTL Link
I.A.Enterprise
Strategic
Planning
Lean Practice
I.A.1
I.A.2
I.A.3
I.B. Adopt
Lean
Paradigm
I.B.1
I.B.2
I.B.3
I.B.4
State
Mean
Variance
Range
Level 1
Level 2
Level 3
Level 4
Level5
Integration of Lean in
Current
2.3
0.5
3
2
11
6
1
0
strategic planning process
Desired
4.6
0.3
1
0
0
0
9
11
Gap
2.3
1.1
4
4
6
7
2
0
Current
1.6
0.3
1
8
12
0
0
0
Desired
4.7
0.2
1
0
0
0
7
13
Gap
3.1
0.6
2
0
5
9
6
0
Current
2.8
0.3
2
8
11
1
0
0
Desired
4.7
0.2
1
0
0
0
6
14
Gap
2.0
0.6
3
3
12
4
0
0
Learning and education in “Lean”
Current
1.7
0.3
2
8
11
1
0
0
for enterprise leaders
Desired
4.2
0.1
1
0
0
0
17
3
Gap
2.5
0.6
3
1
10
7
2
0
Current
1.9
0.2
2
4
15
1
0
0
Desired
4.3
0.2
1
0
0
0
14
6
Gap
2.5
0.4
2
1
9
10
0
0
Current
2.2
0.7
3
4
10
5
1
0
Desired
4.6
0.3
1
0
0
0
9
11
Gap
2.4
0.5
3
1
11
7
1
0
Current
1.6
0.4
2
10
9
1
0
0
Desired
4.4
0.2
1
0
0
0
13
7
Gap
2.8
0.6
3
1
5
11
3
0
Focus on customer value
Leveraging the extended enterprise
Senior management commitment
Lean enterprise vision
A sense of urgency
The next three spreadsheets in the workbook essentially represent the same data that exists in the Spreadsheet
Calculator, but are grouped by their state. Thus the Current State Summary would contain all of the data on the
current state results as shown in the figure below:
Section 1 - Lean Transformation Leadership
TTL Link
I.A.Enterprise
Strategic
Planning
I.B. Adopt
Lean
Paradigm
Lean Practice
State
Mean
Variance
Range
Level 1
Level 2
Level 3
Level 4
Level 5
I.A.1
Integration of Lean in strategic planning process
Current
2.3
0.5
3
2
11
6
1
0
I.A.2
Focus on customer value
Current
1.6
0.3
1
8
12
0
0
0
I.A.3
Leveraging the extended enterprise
Current
2.8
0.3
2
8
11
1
0
0
I.B.1
Learning and education in “Lean”
Current
1.7
0.3
2
8
11
1
0
0
for enterprise leaders
I.B.2
Senior management commitment
Current
1.9
0.2
2
4
15
1
0
0
I.B.3
Lean enterprise vision
Current
2.2
0.7
3
4
10
5
1
0
I.B.4
A sense of urgency
Current
1.6
0.4
2
10
9
1
0
0
The Desired State Sheet and Gap Summary look the same as this figure except they say “Desired” and “Gap” in
the “State” column respectively. At the top of each of these spreadsheets there is also a summary block that calculates the overall section statistics as shown in the figure on the following page:
Page 154 of 166
© Copyright Massachusetts Institute of Technology, 2001
Current State - Overall LESAT Score
Current
Current
2.1
Variance
Range
2.0
0.3
1.9
Section III - Enabling Infrastructure
Section II - Life Cycle Processes
Section I - Lean
Mean
Mean
Variance
Mean
Range
0.4
2.0
Current
1.9
Variance
0.4
Range
1.9
Current
Mean
Variance
Range
1.5
0.3
1.3
The Section X.X. Averages spreadsheet takes all of the data and averages the results at the LESAT X.X level. Thus
for Section I.A - Enterprise Strategic Planning, the number generated will be the average of I.A.1, I.A.2, and I.A.3.
This spreadsheet presents the current state, desired state, and gap, along with the variances on these values, as
shown in the figure below:
Section 1 - Lean Transformation Leadership
Section X.X Averages
TTL LINK
Current Desired
Section X.X Average Variances
Gap
Current
Desired
Gap
I.A. Enterprise Strategic Planning
2.2
4.6
2.4
2.2
4.6
2.4
I.B. Adopt Lean Paradigm
1.8
4.3
2.5
1.8
4.3
2.5
I.C. Focus on the Value Stream
2.1
4.5
2.4
2.1
4.5
2.4
I.D. Develop Lean Structure and Behavior
2.0
4.5
2.5
2.0
4.5
2.5
I.E. Create and Refine Implementation Plan
2.5
4.4
1.9
2.5
4.4
1.9
I.F. Implement Lean Initiatives
2.8
4.6
1.8
2.8
4.6
1.8
I.G. Focus on Continuous Improvement
2.2
4.5
2.3
2.2
4.5
2.3
© Copyright Massachusetts Institute of Technology, 2001
Page 155 of 166
The final spreadsheet in the LESAT Calculator for Data Entry/Consolidation generates two graphs for use in reviewing the results of the assessment. The first bar graph shows the value for the current state, desired state, and gap
5
4
3
2
1
0
I.A
I.B
I.C
I.D
I.E
I.F
I.G
II.A II.B II.C II.D II.E II.F III.A III.B
for each of the LESAT practices. The graphs are cumulative, thus the lower bar (in black) represents the current state,
the upper bar (lighter) represents the gap and the sum of the two (value of the top of the gap bar) represents the
desired state. The second graph is in the same format, but represents the data at the X.X-level. Data was entered
into a sample spreadsheet to develop a sample graph, as shown in the figure below:
The user of the spreadsheet may wish to sort the data in ascending order to get a better view of the lowest ranking
LESAT sections and practices as was done with the data in the graph above to create the following figure:
5
4
3
2
1
0
III.B III.A II.A
Page 156 of 166
I.B
II.C
I.D
II.B II.F
I.C
I.G
II.E
I.A
II.D
I.E
I.F
© Copyright Massachusetts Institute of Technology, 2001
E.4 - Site Visit Alternatives for Analyzing and Displaying Data
The Alpha and Beta testing of the LESAT tool provided insight into the many ways results were analyzed and reported by the participating companies. The following pages provide an overview of some of these reporting options.
There are pros and cons associated with each individual method, but they do provide useful examples of how your
enterprise may choose to review its LESAT results.
© Copyright Massachusetts Institute of Technology, 2001
Page 157 of 166
© Copyright Massachusetts Institute of Technology, 2001
Develop Lean Structure and Behavior
Enterprise organizational orientation
Relationships based on mutual trust
Open and timely communications
Employee empowerment
Incentive alignment
Innovation encouragement
Lean change agents
Create and Refine Transformation Plan
Enterprise-level Lean transformation plan
Commit resources for Lean improvements
Provide education and training
Implement Lean Initiatives
Development of detailed plans based on enterprise plan
Tracking detailed implementation
Focus on Continuous Improvement
Structured continuous improvement processes
Monitoring lean progress
Nurturing the process
Capturing lessons learned
Impacting enterprise strategic planning
I.D
I.D.1
I.D.2
I.D.3
I.D.4
I.D.5
I.D.6
I.D.7
I.E
I.E.1
I.E.2
I.E.3
I.F
I.F.1
I.F.2
I.G
I.G.1
I.G.2
I.G.3
I.G.4
I.G.5
Lean Element
Lean Transformation/Leadership
Enterprise Strategic Planning
Integration of Lean in strategic planning process
Focus on customer value
Leveraging the extended enterprise
Adopt Lean Paradigm
Learning and education in “Lean” for enterprise leaders
Senior management commitment
Lean enterprise vision
A sense of urgency
Focus on the Value Stream
Understanding current value stream
Enterprise flow
Designing future value stream
Performance measures
I
I.A
I.A.1
I.A.2
I.A.3
I.B
I.B.1
I.B.2
I.B.3
I.B.4
I.C
I.C.1
I.C.2
I.C.3
I.C.4
2.1
3
3
1
2
2
2
2
2.3
2
2
3
2.5
4
1
1.8
2
2
1
1
3
1.7
2
2
1
1.8
2
3
1
1
2.3
2
3
2
2
2.4
3
3
1
2
2
4
2
2.7
2
2
4
2.0
3
1
1.8
1
2
2
1
3
2.0
2
2
2
2.0
2
2
2
2
2.3
2
3
2
2
PS
Q
2.1
2
3
1
2
2
3
2
2.7
2
3
3
1.5
2
1
1.6
2
1
1
1
3
2.0
3
2
1
2.3
2
3
2
2
2.3
3
2
2
2
A
Q
2.4
3
2
2
3
2
3
2
1.7
1
2
2
2.0
2
2
1.6
2
1
1
1
3
2.0
2
2
2
2.3
2
3
2
2
2.0
2
2
2
2
2.1
3
2
1
3
1
3
2
1.7
1
2
2
2.5
3
2
1.8
2
2
1
1
3
2.0
2
2
2
2.8
3
3
3
2
2.3
3
2
2
2
2.7
2
2
2
3
3
4
3
2.0
2
2
2
2.5
3
2
1.8
2
2
1
1
3
2.3
2
3
2
2.5
3
2
3
2
2.3
3
2
3
1
2.0
3
1
2
3
1
2
2
2.3
3
2
2
2.0
2
2
1.6
1
1
2
2
2
1.7
2
2
1
2.8
2
3
3
3
2.0
1
2
3
2
g
in
er
e
le
l
P
in
&
op
g
ga
e
M
En
P
Le
S
2.0
3
2
2
1
3
1
2
2.3
2
2
3
1.5
2
1
1.4
1
1
2
1
2
1.0
1
1
1
2.5
1
3
4
2
2.8
3
3
3
2
2.1
3
1
2
2
2
2
3
2.3
3
1
3
2.0
3
1
2.0
1
2
2
2
3
1.3
1
2
1
2.3
2
2
2
3
2.5
3
2
3
2
2.1
3
2
2
2
2
2
2
2.3
2
2
3
2.0
3
1
1.8
1
2
2
2
2
2.0
2
2
2
2.0
2
2
2
2
1.8
3
2
1
1
2.1
3
2
2
2
2
2
2
2.3
3
2
2
2.0
3
1
1.4
1
1
2
2
1
2.0
2
2
2
2.0
2
2
2
2
1.8
3
2
1
1
1.7
2.1
2.2
2.2
2.2
2.3
1.8
4.4
4.5
4.4
4.5
4.5
4.2
4.3
4.0
4.3
4.3
4.2
4.4
4.1
4.0
4.3
4.5
4.5
4.5
4.5
4.5
4.5
4.2
4.0
4.0
4.5
4.5
4.5
4.7
4.4
4.5
4.5
4.4
4.4
4.4
4.7
t.
n
.
m
io
t
g
ev
.
ca
D
M
i
g
ev
o
D
ss
ss
un
LS
Pr
&
m
A
ne
ne
.
i
i
T
v
s
s
m
g
d
TO
Tn
A
Bu
Bu
Co
2.6
2.0
2.1
2.1
2.3
2.2
2.4
ed
ir
s
e
D
Page 158 of 166
ap
G
l
ve
Le
4.2
2.4
• Desired Level
• Gap
4.5
2.3
• Desired Level
• Gap
© Copyright Massachusetts Institute of Technology, 2001
• Definition of 5 - Value streams (present and future) are
continually monitored and updated with agreements on
performance measures and goals across the extended
enterprise.
identified. Key internal value streams have been revised to overcome the
main constraints for information and product flow. Baseline performance
measures established to reflect progress toward lean vision and visible
throughout the enterprise
• Definition of 2 - Key stakeholders and what they value have been
2.2 out of 5
I.C. Focus on the Value Stream
Company A - LESAT Report Out
• Overall Site Score
Lean
Aerospace
Initiative
• Definition of 5 - Strategic plans leverage the results of Lean
implementation to achieve growth, profitability and market
position. Customer value predominant driving force
throughout enterprise
• Definition of 2 - Lean is recognized but relegated to lower
levels and is fragmented. Structured process for defining
value is applied to selected areas.
1.8 out of 5
I.A. Enterprise Strategic Planning
Company A - LESAT Report Out
• Overall Site Score
Lean
Aerospace
Initiative
2.2
4.5
Company A - LESAT Report Out
2.1
4.4
2.2 out of 5
Page 159 of 166
• Definition of 5 - Process based organizational structure
aligned across the extended enterprise. Decision making is
delegated to the point of application. Lean incentives
deployed across the extended enterprise
• Definition of 2 - Initial efforts underway to identify functional
barriers, understand implications, fostering innovations,
identification of change agents. Breaking down
organizational barriers and developing mutual trust
• Gap
• Desired Level
• Overall Site Score
I.D. Develop Lean Structure and Behavior
Lean
Aerospace
Initiative
• Definition of 5 - Senior leader advance knowledge of lean,
mentoring lean champions internally and through
the extended enterprise
• Definition of 2 - Actively seeking opportunities to learn about
lean, initial grasp. Senior managers but into group
commitment with common vision of lean and have
developed and urgent case for lean transformation
• Gap
• Desired Level
2.3 out of 5
I.B. Adopt Lean Paradigm
Company A - LESAT Report Out
• Overall Site Score
Lean
Aerospace
Initiative
Company A - LESAT Report Out
2.0
Company A - LESAT Report Out
4.5
2.8
• Desired Level
• Gap
© Copyright Massachusetts Institute of Technology, 2001
• Definition of 5 - Senior manager monitor Lean progress
throughout extended enterprise. They champion and nurture
a culture of Lean. Forecast future results of lean in
assessment of new business opportunities
• Definition of 2 - Some senior managers are providing
encouragement support and recognition on Lean but is not
consistent across enterprise. Lessons learned documented in
some areas. Benefits of lean are beginning to influence
strategic planning
1.7 out of 5
• Overall Site Score
I.G. Focus on Continuous Improvement
Lean
Aerospace
Initiative
Company A - LESAT Report Out
4.5
2.6
• Desired Level
• Gap
Page 160 of 166
• Definition of 5 - Virtual organizations are created from the
extended enterprise resources to execute the development
efforts. Ability to easily shift resources to new opportunities
• Definition of 2 - Understanding the core competencies but
business pursuits are uncoupled form enterprise planning.
Management system to monitor and control performance
and staffing
1.9 out of 5
• Overall Site Score
II.A. Business Acquisition and Program Management
Lean
Aerospace
Initiative
• Definition of 5 - Lean transformation plans and interrelated
implementation projects are coordinated with and support
the lean transformation plan and are throughout the
extended enterprise
• Gap
4.1
• Definition of 5 - Lean transformation plan balances mutual
benefits of stakeholders, pool of resources provided for lean
initiatives, education and training supports the needs across
the extended enterprise
2.1
• Gap
• Desired Level
• Definition of 2 - Key goals of the enterprise Lean
implementation projects are understood by a majority of
employees. Progress of detailed lean implementation
projects are tracked within operational units
4.3
• Desired Level
2.1 out of 5
I.F. Implement Lean Initiatives
Company A - LESAT Report Out
• Overall Site Score
Lean
Aerospace
Initiative
• Definition of 2 - Enterprise level view identifies Lean
transformation projects to meet strategic objectives.
Some enterprise level resources committed but often applied
to symptom rather than root cause.
2.2 out of 5
• Overall Site Score
I.E. Create and Refine Transformation Plan
Lean
Aerospace
Initiative
4.4
1.4
• Desired Level
• Gap
© Copyright Massachusetts Institute of Technology, 2001
• Definition of 5 - Integrated supplier value stream is optimized
to create and deliver best value to the customer over the
entire product life cycle and maintain long-term sustainable
competitive advantage.
• Definition of 2 - The supply base has been rationalized to focus
suppliers who have high impact on strategic objectives.
Long term purchase agreements are introduced focusing on
affordability and cost reduction
3.0 out of 5
• Overall Site Score
II.D. Supply Chain Management
4.7
2.2
• Desired Level
• Gap
Page 161 of 166
• Definition of 5 - Work segmented and organized along the
value stream flow to achieve defect free production upon
demand through the implementation of pull from customer
through material suppliers.
• Definition of 2 - Production System Operates with a batch and
queue schedule with limited cellular or inline layouts to
improve flow.
2.5 out of 5
• Overall Site Score
II.E. Produce Product
Company A - LESAT Report Out
Lean
Aerospace
Initiative
Company A - LESAT Report Out
Lean
Aerospace
Initiative
2.5
• Definition of 5 - Customer is routinely involved with IPT with
effective continuous communication. Product and process
definition is seamlessly integrated both internally and with
the upstream and downstream stakeholders.
• Gap
4.6
• Definition of 5 - The requirement process is a strategic
advantage for the extended enterprise contributing to
increased responsiveness and new business opportunities.
Process established to actively seed data on needs. usage,
and process capability across the marketplace.
2.4
• Gap
• Desired Level
• Definition of 2 - Customer inputs considered qualitatively
through top-level liaison and occasional reviews.
Multidisciplinary development is used to a limited extent.
4.4
• Desired Level
2.1 out of 5
II.C. Develop Product and Process
Company A - LESAT Report Out
• Overall Site Score
Lean
Aerospace
Initiative
• Definition of 2 - Requirements definition process which
balances cost, schedule, and performance is partially
developed deployed and documented
2.0 out of 5
II.B. Requirements Definition
Company A - LESAT Report Out
• Overall Site Score
Lean
Aerospace
Initiative
4.5
3.0
• Desired Level
• Gap
© Copyright Massachusetts Institute of Technology, 2001
• Definition of 5 - Defect free distribution on demand by
implementation of customer pull from end customer through
material suppliers.
• Definition of 2 - Distribute in smaller batch sizes in line with
increased reliability. Programs in place to reduce customer
receipt inspection. Collection of data on failure trends for
preventative maintenance and reduction of spare part levels.
1.5 out of 5
II.F. Distribute and Service Product
Company A - LESAT Report Out
• Overall Site Score
Lean
Aerospace
Initiative
2.8
4.8
Page 162 of 166
• Definition of 5 - Stakeholders across the extended enterprise
generate and share timely financial and performance data.
Information is easily accessible/usable.
• Definition of 2 - Identified high leverage opportunities for
common tools and systems with initial deployment in a few
areas. Personal management process is in early stage of
development. Maintenance of legacy systems consume
most of IT resources. Sources of variation are being
identified and analyzed with initial efforts underway
• Gap
• Desired Level
2.0 out of 5
III. Enabling Infrastructure
Company A - LESAT Report Out
• Overall Site Score
Lean
Aerospace
Initiative
Focus on customer value
Leverage the Extended Enterprise
I.A.2
I.A.3.
A sense of urgency
I.B.4
© Copyright Massachusetts Institute of Technology, 2001
Suggested Actions:
Lean enterprise vision
I.B.3
Gap
Senior management commitment
I.B.2
2.1
2.1
1.9
Learning and education in “Lean” for enterprise leaders
Page 163 of 166
4.6
4.6
4.4
4.6
4.7
4.6
2.3
2.2
4.5
2.4
I.B.1
2.5
2.3
4.6
2.2
2.1
Average Level
Gap
Average Level
4.6
Average
Desired
Level
2.3
Average
Present
Level
I.B. Adopt Lean Paradigm
Suggested Actions:
Integration of Lean in strategic planning process
I.A.1
I.A.Enterprise Strategic Planning
Section I - Lean Transformation/ Leadership
Lean Assessment Summary
1
2
3
1
2
3
4
1
2
3
4
1
2
3
4
5
6
7
1
2
3
1
2
1
2
3
4
5
Enterprise Strategic Planning
Adopt Lean Paradigm
Focus on the Value Stream
Develop Lean Structure
and Behavior
Create and Refine
Transformation Plan
Implement Lean Initiatives
Focus on Continuous
Improvement
A
B
C
D
E
F
G
© Copyright Massachusetts Institute of Technology, 2001
I
I.G.1
I.G.2
I.G.3
I.G.4
I.G.5
I.F.1
I.F.2
I.E.1
I.E.2
I.E.3
I.D.1
I.D.2
I.D.3
I.D.4
I.D.5
I.D.6
I.D.7
I.C.1
I.C.2
I.C.3
I.C.4
I.B.1
I.B.2
I.B.3
I.B.4
I.A.1
I.A.2
I.A.3
Integration of Lean in strategic planning process
Focus on customer value
Leveraging the extended enterprise
Average Level
Learning and education in “Lean” for enterprise leaders
Senior management commitment
Lean enterprise vision
A sense of urgency
Average Level
Understanding current value stream
Enterprise flow
Designing future value stream
Performance measures
Average Level
Enterprise organizational orientation
Relationships based on mutual trust
Open and timely communications
Employee empowerment
Incentive alignment
Innovation encouragement
Lean change agents
Average Level
Enterprise-level Lean transformation plan
Commit resources for Lean improvements
Provide education and training
Average Level
Development of detailed plans based on enterprise plan
Tracking detailed implementation
Average Level
Structured continuous improvement processes
Monitoring lean progress
Nurturing the process
Capturing lessons learned
Impacting enterprise strategic planning
Average Level
SECTION I - Lean Transformation/Leadership
Team
Avg
Current
Level
2.0
2.1
2.1
2.1
1.9
2.1
1.8
2.2
2.0
1.9
2.0
2.2
2.1
2.1
2.2
2.0
2.1
2.1
1.9
2.0
1.9
2.0
1.8
2.0
2.0
1.9
2.1
2.2
2.2
2.3
2.0
2.0
2.0
2.1
2.1
Team
Avg
Desired
Level
4.5
4.6
4.6
4.6
4.5
4.5
4.5
4.5
4.5
5.0
5.0
4.5
5.0
4.9
4.5
4.4
4.5
4.5
4.5
4.5
4.5
4.5
4.5
4.4
4.5
4.5
4.5
4.5
4.5
4.5
4.4
4.4
4.6
4.6
4.5
2.3
2.4
2.3
2.3
2.4
2.6
2.7
2.4
2.5
2.7
2.4
2.4
2.7
2.6
2.2
2.4
2.4
2.5
2.7
2.5
2.4
2.4
2.4
1.9
2.4
2.2
2.9
2.0
2.4
2.2
2.1
2.2
2.4
2.6
2.3
Gap
1-3
1-4
1-2
1-2
1-3
1-4
1-3
1-3
1-3
1-3
1-3
1-3
1-5
1-3
1-2
1-3
1-3
1-3
1-3
1-3
1-3
1-3
1-4
1-2
1-3
1-3
1-4
1-3
Current
L-H
Page 164 of 166
4-5
4-5
3-5
3-5
3-5
4-5
3-5
3-5
3-5
3-5
4-5
4-5
4-5
4-5
3-5
3-5
4-5
3-5
3-5
4-5
3-5
3-5
4-5
3-5
3-5
3-5
3-5
3-5
Desired
L-H
I.B.4. A Sense of Urgency
I.E.1. Enterprise Level Lean Transformation Plan
III.F. Enterprise Flow
I.C.1. Current Value Stream
II.A.1. Leverage Lean Capability for Business Growth
II.A.2. Optimize the Capability and Utilization of Assets
II.B.2 Utilize the Data from the Extended Enterprise
II.D.1. Develop/ Manage Supplier Network
II.F.4. Provide Post Delivery Service, Support, and Sustainability
III.G. Enable the Lean Enterprise with IT Tools and Systems
I.C.2. Future Value Stream
II.F.3. Enhance Value of Delivered products and Services to Customers and the Enterprise
I.F.1. Development of Detailed Plans Based on Enterprise Plan
II.F.2. Distribute Product in Lean Fashion
I.E.3. Provide Education and Training
III.C. Enterprise Stakeholders Pull Required Financial Measures
I.A.2. Focus on Customer Value
I.D.6. Innovation Encouragement
I.F.2. Tracking Implementation
I.G.5. Feedback to Enterprise Strategic Planning
I.B.3. Lean Enterprise Vision
Lean Practice
I.B.4. A Sense of Urgency
I.D.4. Employee Empowerment
II.D.1. Develop/Manage Supplier Network
III.F. Enterprise Flow
I.A.3. Leveraging the Extended Enterprise
I.D.3. Open and Timely Communications
I.E.3. Provide Education and Training
I.G.5. Feedback to Enterprise Strategic Planning
I.F.1. Development of Detailed Plans Based on Enterprise Plan
I.C.1. Current Value Stream
I.E.1. Enterprise Level Lean Transformation Plan
II.A.2. Optimize the Capability and Utilization of Assets
I.A.2. Focus on Customer Value
I.C.2. Future Value Stream
I.C.3. Performance Measures
III.C. Enterprise Stakeholders Pull Required Financial Measures
II.F.4. Provide Post Delivery Service, Support, and Sustainability
II.F.2. Distribute Product in Lean Fashion
II.F.3. Enhance Value of Delivered products and Services to Customers and the Enterprise
I.B.3. Lean Enterprise Vision
I.B. Adopt Lean Paradigm
I.D. Develop Lean Structure and Behavior
II.D. Supply Chain Management
Section III: Enabling Infrastructure
I.A. Enterprise Strategic Planning
I.D. Develop Lean Structure and Behavior
I.E. Create and Refine Transformation Plan
I.G. Focus on Continuous Improvement
I.F. Implement Lean Initiatives
I.C. Focus on the Value Stream
I.E. Create and Refine Transformation Plan
II.A. Business Acquisition and Program Management
I.A. Enterprise Strategic Planning
I.C. Focus on the Value Stream
I.C. Focus on the Value Stream
Section III: Enabling Infrastructure
II.F. Distribute and Service Product
II.F. Distribute and Service Product
II.F. Distribute and Service Product
I.B. Adopt Lean Paradigm
© Copyright Massachusetts Institute of Technology, 2001
Lean Practice
Sub-category
LESAT - Pareto Analysis of the Gap (Desired Level - Current Level)
I.B. Adopt Lean Paradigm
I.E. Create and Refine Transformation Plan
Section III: Enabling Infrastructure
I.C. Focus on the Value Stream
II.A. Business Acquisition and Program Management
II.A. Business Acquisition and Program Management
II.B. Requirements Definition
II.D. Supply Chain Management
II.F. Distribute and Service Product
Section III: Enabling Infrastructure
I.C. Focus on the Value Stream
II.F. Distribute and Service Product
I.F. Implement Lean Initiatives
II.F. Distribute and Service Product
I.E. Create and Refine Transformation Plan
Section III: Enabling Infrastructure
I.A. Enterprise Strategic Planning
I.D. Develop Lean Structure and Behavior
I.F. Implement Lean Initiatives
I.G. Focus on Continuous Improvement
I.B. Adopt Lean Paradigm
Sub-category
LESAT - Pareto Analysis of the Present State
3.5
3.3
3.2
3.0
3.0
3.0
2.9
2.8
2.8
2.6
2.6
2.6
2.6
2.5
2.5
2.5
2.5
2.5
2.5
2.5
Page 165 of 166
Average Present Level
1.5
1.5
1.6
1.6
1.9
1.9
2.0
2.0
2.1
2.1
2.1
2.1
2.1
2.1
2.1
2.1
2.2
2.4
2.4
2.4
2.4
Average Present Level
LEAN PRACTICES
Opportunities
Evidence
Lean Indicators
(Examples)
enterprise
across the extended
Charting the course
© Copyright Massachusetts Institute of Technology, 2001
1.6
I.E.1. Enterprise-Level
Lean
Transformation
Plan
LP#
MEAN
❑C ❑D
❑C ❑D
Enterprise improvement
plans are coordinated and
prioritized across enterprise
value stream(s), with a
timeline for expected
1
measurable results.
Level 3
CAPABILITY LEVELS
• Plans balance long-term and short-term stakeholder objectives for the best overall solution.
• The milestone targets of the lean transformation plan are broken-down by section and deployed across the enterprise.
❑C ❑D
Lean transformation plan is
continuously refined through
learning from implementation results and changing
strategic requirements.
Level 4
• A process is in place to incorporate lessons learned into the enterprise-level lean transformation plan.
❑C ❑D
Enterprise-level view
identifies lean implementation projects, which are prioritized to meet long and
short-term strategic
3
objectives.
Individual planning efforts
are mostly bottom up initiatives with little priority or
coordination established
at enterprise level.
4
Level 2
Level 1
TALLY
• Have lessons learned and best practice been effectively incorporated within lean transformation planning?
• Does the current education and training program adequately support the strategic direction(s) and lean transformation?
• Have adequate resources been provided to facilitate lean transformation?
• Is the enterprise level lean transformation plan prioritized and aligned with strategic business objectives?
Diagnostic Questions
Page 166 of 166
❑C ❑D
Lean transformation plan
balances mutual benefits
of stakeholders across the
extended enterprise.
Level 5
Identify, prioritize and sequence a comprehensive set of lean initiatives that collectively constitute the plan for achieving the desired transformation.
I.E. Create and Refine Transformation Plan
Lean Aerospace Initiative
Massachusetts Institute of Technology
77 Massachusetts Avenue
Room 41-205
Cambridge, MA 02139
web.mit.edu/lean