Enterprise Transition to Lean Roadmap Professor Deborah Nightingale September 28, 2005
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Enterprise Transition to Lean Roadmap Professor Deborah Nightingale September 28, 2005 Lean Enterprise Implementation Processes and Tools Implementation Issue Enterprise Tool What are the key lean principles and practices? Lean Enterprise Model (LEM) How do I transform my enterprise to lean? Enterprise Transition to Lean Roadmap (TTL) How do I assess my progress? Lean Enterprise Self Assessment Tool (LESAT) ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 2 LEM Overarching Practices Human-oriented Practices Process-oriented Practices • Promote lean leadership at all levels • Assure seamless information flow • Relationships based on mutual trust and commitment • • Make decisions at lowest appropriate level Implement integrated product and process development (IPPD) • Ensure process capability and maturation • Maintain challenges to existing processes • Identify and optimize enterprise flow • Maintain stability in changing environment • Optimize capability and utilization of people • Continuous focus on the customer • Nurture a learning environment ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 3 Lean Enterprise Implementation Processes and Tools Implementation Issue Lean Enterprise Model (LEM) What are the key lean principles and practices? How do I transform my enterprise to lean? How do I assess my progress? ESD.61J / 16.852J: Integrating the Lean Enterprise Enterprise Tool Enterprise Transition to Lean Roadmap (TTL) Lean Enterprise Self Assessment Tool (LESAT) © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 4 Lean Transformation Issues • Why do most lean transformation activities fail? • What are the key success factors in implementing lean enterprise wide? • How can we better assure that lean will impact bottom line results? • Are there certain activities that are ideally performed before others? • What is the role of senior leadership in assuring success? Issues Issues Motivated Motivated Development Development of of Enterprise Enterprise Transition Transition to to Lean Lean Roadmap Roadmap ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 5 Key Principles of Change Management Apply to Lean Transformation • Strategic Alignment • Organizational Structure • Management Commitment • Goals and Objectives • Sense of Urgency • Transformation Plan • Stakeholder Involvement • Monitoring and Nurturing ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 6 Lean Transformation Requires an Enterprise Approach Customer Customer Finance/Human Finance/Human Resources, Resources,etc. etc. Manufacturing Manufacturing Operations Operations Product ProductSupport Support Product ProductDevelopment Development Supplier SupplierNetwork Network ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 7 Enterprise Leadership is Key Element of Success LAI Aerospace Organizations 1 0.9 0.8 0.7 Productivity Index 0.6 0.5 0.4 0.3 0.2 0.1 0 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 Leadership Index Source: D. Tonaszuck, MIT Master’s Thesis, January 2000 ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 8 1 Transition to Lean Module Concept Enterprise Level Roadmap + + HR Business Processes Acquisition Supplier Network Product Development • Priorities • Sequence • Key Enablers • “How-To’s” • Change Mgmt. Principles Production Operations Roadmap Transition to Lean Plan ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 9 Enterprise Level Roadmap Conceptual Framework What Whatis isthe theEnterprise EnterpriseLevel LevelTransition-To-Lean Transition-To-LeanModel Model?? Begins with a description of a Top Level Flow of primary activities referred to as “The Roadmap” + + Focus on the Value Stream •Map Value Stream •Internalize Vision •Set Goals & Metrics •Identify & Involve Key Stakeholders Then, provides descriptions of key tasks required within each primary activity Finally, leads discussion of issues, enablers, barriers, case studies & reference material relevant to each task in a common structured framework ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology What What Why Why Who Who When When How How Where Where Page 10 Enterprise Level Roadmap Conceptual Framework What WhatDoes Doesthe theEnterprise EnterpriseLevel LevelTTL TTLModel ModelProvide? Provide? • A robust path that Enterprise Leaders can follow to transition their organizations to a new plateau of “leanness” • Efficient and effective tool that will improve the quality of thinking and awareness of Enterprise Leaders on the challenge of transitioning their organization • Framework for cultural, organizational & change management considerations • Guidance in making the transition process, itself, a ‘lean’ process ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 11 Enterprise Level Roadmap Long Term Cycle Entry Adopt Lean Paradigm Focus on the Value Stream Detailed Lean Vision Initial Lean Vision + Environmental Corrective Action Indicators Enterprise Strategic Planning Lean Impact Source: Lean Aerospace Initiative, MIT © 2001 Develop Lean Structure & Behavior Focus on Continuous Improvement Outcomes on Enterprise Metrics ESD.61J / 16.852J: Integrating the Lean Enterprise Lean Transformation Framework Short Term Cycle Detailed Corrective Action Indicators Create & Refine Transformation Plan + Implement Lean Initiatives © Deborah Nightingale, 2005 Massachusetts Institute of Technology Enterprise Level Transformation Plan Page 12 Enterprise Level Roadmap Long Term Cycle Entry Adopt Lean Paradigm Focus on the Value Stream Detailed Lean Vision Initial Lean Vision + Environmental Corrective Action Indicators Enterprise Strategic Planning Lean Impact Source: Lean Aerospace Initiative, MIT © 2001 Develop Lean Structure & Behavior Focus on Continuous Improvement Outcomes on Enterprise Metrics ESD.61J / 16.852J: Integrating the Lean Enterprise Lean Transformation Framework Short Term Cycle Detailed Corrective Action Indicators Create & Refine Transformation Plan + Implement Lean Initiatives © Deborah Nightingale, 2005 Massachusetts Institute of Technology Enterprise Level Transformation Plan Page 13 Enterprise Strategic Planning • Create the Business Case for Lean • Focus on Customer Value • Include Lean in Strategic Planning • Leverage the Extended Enterprise ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 14 Enterprise Level Roadmap Long Term Cycle Entry Adopt Lean Paradigm Focus on the Value Stream Detailed Lean Vision Initial Lean Vision + Environmental Corrective Action Indicators Enterprise Strategic Planning Lean Impact Source: Lean Aerospace Initiative, MIT © 2001 Develop Lean Structure & Behavior Focus on Continuous Improvement Outcomes on Enterprise Metrics ESD.61J / 16.852J: Integrating the Lean Enterprise Lean Transformation Framework Short Term Cycle Detailed Corrective Action Indicators Create & Refine Transformation Plan + Implement Lean Initiatives © Deborah Nightingale, 2005 Massachusetts Institute of Technology Enterprise Level Transformation Plan Page 15 Adopt Lean Paradigm • Build Vision • Convey Urgency • Foster Lean Learning • Make the Commitment • Obtain Senior Management Buy-in ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 16 Enterprise Level Roadmap Entry Adopt Lean Paradigm EVSMA Long Term Cycle Focus on the Value Stream Detailed Lean Vision Initial Lean Vision + Environmental Corrective Action Indicators Enterprise Strategic Planning Lean Impact Source: Lean Aerospace Initiative, MIT © 2001 Develop Lean Structure & Behavior Focus on Continuous Improvement Outcomes on Enterprise Metrics ESD.61J / 16.852J: Integrating the Lean Enterprise Lean Transformation Framework Short Term Cycle Detailed Corrective Action Indicators Create & Refine Transformation Plan + Implement Lean Initiatives © Deborah Nightingale, 2005 Massachusetts Institute of Technology Enterprise Level Transformation Plan Page 17 Focus On The Value Stream • Map Value Stream • Internalize Vision • Set Goals & Metrics • Identify & Involve Key Stakeholders ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 18 Enterprise Level Roadmap Long Term Cycle Entry Adopt Lean Paradigm Focus on the Value Stream Detailed Lean Vision Initial Lean Vision + Environmental Corrective Action Indicators Enterprise Strategic Planning Lean Impact Source: Lean Aerospace Initiative, MIT © 2001 Develop Lean Structure & Behavior Focus on Continuous Improvement Outcomes on Enterprise Metrics ESD.61J / 16.852J: Integrating the Lean Enterprise Lean Transformation Framework Short Term Cycle Detailed Corrective Action Indicators Create & Refine Transformation Plan + Implement Lean Initiatives © Deborah Nightingale, 2005 Massachusetts Institute of Technology Enterprise Level Transformation Plan Page 19 Develop Lean Structure And Behavior • Organize for Lean Implementation • Identify & Empower Change Agents • Align Incentives • Adapt Structure & Systems ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 20 Enterprise Level Roadmap Long Term Cycle Entry Adopt Lean Paradigm Focus on the Value Stream Detailed Lean Vision Initial Lean Vision + Environmental Corrective Action Indicators Enterprise Strategic Planning Lean Impact Source: Lean Aerospace Initiative, MIT © 2001 Develop Lean Structure & Behavior Focus on Continuous Improvement Outcomes on Enterprise Metrics ESD.61J / 16.852J: Integrating the Lean Enterprise Lean Transformation Framework Short Term Cycle Detailed Corrective Action Indicators Create & Refine Transformation Plan + Implement Lean Initiatives © Deborah Nightingale, 2005 Massachusetts Institute of Technology Enterprise Level Transformation Plan Page 21 Create & Refine Transformation Plan • Identify & Prioritize Activities • Commit Resources • Provide Education & Training ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 22 Enterprise Level Roadmap Long Term Cycle Entry Adopt Lean Paradigm Focus on the Value Stream Detailed Lean Vision Initial Lean Vision + Environmental Corrective Action Indicators Enterprise Strategic Planning Lean Impact Source: Lean Aerospace Initiative, MIT © 2001 Develop Lean Structure & Behavior Focus on Continuous Improvement Outcomes on Enterprise Metrics ESD.61J / 16.852J: Integrating the Lean Enterprise Lean Transformation Framework Short Term Cycle Detailed Corrective Action Indicators Create & Refine Transformation Plan + Implement Lean Initiatives © Deborah Nightingale, 2005 Massachusetts Institute of Technology Enterprise Level Transformation Plan Page 23 Implement Lean Initiatives • Develop Detailed Plans • Implement Lean Activities ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 24 Enterprise Level Roadmap Long Term Cycle Entry Adopt Lean Paradigm Focus on the Value Stream Detailed Lean Vision Initial Lean Vision + Environmental Corrective Action Indicators Enterprise Strategic Planning Lean Impact Source: Lean Aerospace Initiative, MIT © 2001 Develop Lean Structure & Behavior Focus on Continuous Improvement Outcomes on Enterprise Metrics ESD.61J / 16.852J: Integrating the Lean Enterprise Lean Transformation Framework Short Term Cycle Detailed Corrective Action Indicators Create & Refine Transformation Plan + Implement Lean Initiatives © Deborah Nightingale, 2005 Massachusetts Institute of Technology Enterprise Level Transformation Plan Page 25 Focus On Continuous Improvement • Monitor Lean Progress • Nurture the Process • Refine the Plan • Capture and Adopt New Knowledge ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 26 Enterprise Transition to Lean Roadmap Entry/Re-entry Cycle Long Term Cycle Focus on the Value Stream Adopt Lean Paradigm •Build Vision •Convey Urgency •Foster Lean Learning •Make the Commitment •Obtain Senior Mgmt. Buy-in Initial Lean Vision Environmental Corrective Action Indicators Decision to Pursue Enterprise Transformation Enterprise Strategic Planning • Create the Business Case for Lean • Focus on Customer Value • Include Lean in Strategic Planning • Leverage the Extended Enterprise •Map Value Stream •Internalize Vision •Set Goals & Metrics •Identify & Involve Key Stakeholders Develop Lean Structure & Behavior Detailed Lean Vision + Short Term Cycle Focus on Continuous Improvement Detailed Corrective Action Indicators •Monitor Lean Progress •Nurture the Process •Refine the Plan •Capture & Adopt New Knowledge ESD.61J / 16.852J: Integrating the Lean Enterprise •Organize for Lean Implementation •Identify & Empower Change Agents •Align Incentives •Adapt Structure & Systems Lean Transformation Framework Create & Refine Transformation Plan •Identify & Prioritize Activities •Commit Resources •Provide Education & Training + Outcomes on Enterprise Metrics Enterprise Level Transformation Plan Implement Lean Initiatives •Develop Detailed Plans •Implement Lean Activities © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 27 Enterprise Level Roadmap The On-going Lean Enterprise Long Term Cycle Entry Enterprise Strategic Planning Focus on the Value Stream Develop Lean Structure & Behavior Detailed Lean Vision Response to the voice of the customer + Environmental Corrective Action Indicators Lean Transformation Framework Short Term Cycle Focus on Continuous Improvement Detailed Corrective Action Indicators Create & Refine Transformation Plan Lean Impact Outcomes on Enterprise Metrics ESD.61J / 16.852J: Integrating the Lean Enterprise + Implement Lean Initiatives © Deborah Nightingale, 2005 Massachusetts Institute of Technology Enterprise Level Transformation Plan Page 28 Common Discussion Framework Is Used • Discussion of issues • Six Interdependent Elements of Implementation What What Why Why Who Who When When How How Where Where z Enablers z Barriers z Related Case Studies z Further Reference Material ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 29 ‘Drilling Down’ to an Example of TTL’s Content Entry Enterprise Level Roadmap Long Term Cycle Adopt Lean Paradigm • Build Vision • Convey Urgency • Foster Lean Learning • Make the Commitment • Obtain Senior Mgmt. Buy-in Decision to Pursue Enterprise Transformation Enterprise Strategic Planning • Create the Business Case for Lean • Focus on Customer Value • Include Lean in Strategic Planning • Leverage the Extended Enterprise Focus on the Value Stream Initial Lean Vision Develop Lean Structure & Behavior •Map Value Stream Detailed • Internalize Vision Lean •Set Goals & Metrics Vision • Identify & Involve Key Stakeholders + Environmental Corrective Action Indicators •Organize for Lean Implementation • Identify & Empower Change Agents •Align Incentives •Adapt Structure & Systems Short Term Cycle • Discussion of issue • Six Interdependent Elements of Implementation What What Lean Transformation Framework Detailed Focus on Continuous Corrective Action Create and Refine Improvement Indicators Transformation Plan • Monitor Lean Progress •Identify & Prioritize Activities • Nurture the Process •Commit Resources • Refine the Plan •Provide Education & Training • Capture & Adopt New Knowledge Enterprise Outcomes on Level Implement Lean Initiatives Enterprise Transformation • Develop Detail Plans Metrics Plan • Implement Lean Activities + The Discussion Outline Why Why Who Who When When How How Where Where • • • • Enablers Barriers Related Case Studies Further Reference Material Issues surrounding the task of “Build Vision” during the activity of “Adopting the Lean Paradigm” ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 30 Benefits of Enterprise TTL Roadmap • Facilitates enterprise focus • Provides “sequence” for enterprise transformation • Increases understanding of “what went wrong” in previous transformation attempts • Focuses on people/leadership issues • Provides an organizing framework for enterprise-wide transition ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 31 Transition to Lean Module Concept Enterprise Level Roadmap + + HR Business Processes Acquisition Supplier Network Product Development • Priorities • Sequence • Key Enablers • “How-To’s” • Change Mgmt. Principles Production Operations Roadmap Transition to Lean Plan ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 32 Production Operations TransitionTo-Lean Roadmap Supply Chain/External Environment • Legal • Environmental • Government Reqd. Systems (MMAS, EVMS, etc.) Enterprise / Production System Interface • Procurement • Engineering • Financial • Information • Quality • Safety • Training and Human Resources • Workforce/Management Partnership Phase 0 Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6 Adopt Lean Paradigm Prepare Define Value Identify Value Stream Design Production System Implement Flow Implement Total System Pull • Build vision • Build vision • Establish need • Establish need • Foster lean • Foster lean learning learning • Make the • Make the commitment commitment • Obtain Sr. • Obtain Sr. Mgmt. buy-in Mgmt. buy-in • Integrate with • Integrate with Enterprise Level Enterprise Level • Establish an Top Lean • Establish an Operations Leadership Roadmap Operations Lean Lean Implementation Implementation Commitment Team(s) Team(s) • Develop • Develop implementation implementation strategy strategy • Develop a plan • Develop a plan to address to address workforce workforce changes changes • Address Site • Address Site Specific Cultural Specific Cultural Issues Issues • Train key • Train key people people • Establish target • Establish target objectives objectives (metrics) (metrics) • Select initial • Select initial implementation implementation scope scope • Define • Define customer customer • Define value • Define value Quality, Quality, Schedule, and Schedule, and Target Cost Target Cost • Record current • Record current state value state value stream stream • Chart product • Chart product and and information information flow flow • Chart operator • Chart operator movement movement • Chart tool • Chart tool movement movement • Collect • Collect baseline data baseline data + • Develop a future • Develop a future state value state value stream map stream map • Identify takt time • Identify takt time requirements requirements • Review • Review make/buy make/buy decisions decisions • Plan new layout • Plan new layout • Integrate • Integrate suppliers suppliers • Design visual • Design visual control system control system • Estimate and • Estimate and justify costs justify costs • Plan TPM • Plan TPM system system + • Achieve process • Achieve process control control • Implement TPM • Implement TPM • Implement self• Implement selfinspection inspection • Eliminate/ • Eliminate/ reduce waste reduce waste • Cross train • Cross train workforce workforce • Standardize • Standardize operations operations • Reduce set-up • Reduce set-up times times • Mistake proof • Mistake proof processes processes • Implement cell • Implement cell layout layout • Implement visual • Implement visual controls controls + + Phase 7 • Select • Select appropriate appropriate production production system control system control mechanism mechanism • Strive for single • Strive for single item flow item flow • Level and • Level and balance balance production flow production flow • Link with • Link with suppliers suppliers • Draw down • Draw down inventories inventories • Re-deploy • Re-deploy people people • Re-deploy/ • Re-deploy/ dispose assets dispose assets + Strive for Perfection • Optimize quality • Institutionalize 5S ENTRY Expand Internally/Externally ESD.61J / 16.852J: Integrating the Lean Enterprise • Team development • Institute Kaizen events • Remove system barriers • Expand TPM • Evaluate against target metrics © Deborah Nightingale, 2005 Massachusetts Institute of Technology • Evaluate progress using lean maturity matrices IMPROVED COMPETITIVE POSITION
