Lean Institute Turkey
December 3, 2013
Bursa, Turkey
Managing On Purpose
John Shook
Chairman and CEO
Lean Enterprise Institute, USA
Chairman
Lean Global Network
www.lean.org
The State of “Lean” 2013
• We intend to make the world a better
place through Lean Thinking & Practice
– 25 years of “lean”, 50 years of TPS, 100
years of “flow”
• We’ve won some battles
– Auto industry
– Healthcare
– New frontiers
State of the LIT Summit 2013
• Great progress since my first visit
– Excellent presentations from Turkish cos.
– Management level, operations level
– New sectors and new regions
• Important conversations I heard:
– Worker-management divide
– National and corporate culture
– Terminology – word games
– Lean Transformation – how?
– “How to make” – “what to make” – “why to
make”
Purpose Achieved through Processes
and People Aligned by Management
Today
4
New United Motor Manufacturing, Inc. –
NUMMI – built its first car in December 1984
and its last on April 1, 2010.
NUMMI kick-started a revolution.
Joint Venture
Lean Success
in North America
Agreement between Toyota and GM:
Toyota manages the plant via
the Toyota Production System
GM’s “worst” (certified worst) plant:
Quality
Workforce
Former GM workers offered jobs:
Including the old “troublemakers”
8
Results
In about one year…
Quality
Productivity
Best ever in GM
Equal to Takaoka Japan
Best in GM
Close to Takaoka Japan
Employee development:
Some Classroom
Mostly OJT or OJD
TPS established:
Technical - Physicals, “hard” technology
- Product, plant layout, etc.
Social
- “Soft” technologies
- Management/people systems
(Note: “soft” doesn’t mean “easy”!)
Four lessons
in leadership
from NUMMI:
•
•
•
•
“Establish mutual trust”
“No problem is problem”
“Lead as if you have no power”
“Before you build cars, build people”
• It is an Organizational and
• A Personal Transformation.
Lean Leadership
•…is obviously different from the old
command and control dictator.
You can see that quickly
•It is equally different from the
commonly accepted notion of the
“enlightened modern manager”
 That part is less obvious
Define Your Purpose
Improve the Work, Develop the People
• Get each person to take
responsibility to solve
problems and improve his
or her job
• Ensure that each
persons’ job is aligned to
provide value for the
customer and prosperity
for the company
 Begin with yourself!
15
Leadership
Styles
16
Lean vs Traditional Leadership
RESPONSIBILITY-BASED
Focus:
Make the Right Decision
AUTHORITY-BASED
Focus:
The Right to Make the
Decision
GM Fremont  What went wrong?
GM Fremont  What aligned
business purpose?
Lean is a management system!
to align:
•Process
•People
•Purpose
to create value
Lean Enterprise
Transformation Model
What’s the PURPOSE?
•How to improve the work?
•How to develop the people?
•What leadership role and
management system?
What’s the BASIC THINKING?
The
Toyota Production System
Best Quality - Lowest Cost - Shortest Lead Time
Through Shortening the Production Flow By Eliminating Waste
Just in Time
Jidoka
“The right part
at the right time
in the right amount”
HEIJUNKA
“Built-in Quality”
Production Lines
That Stop for
Abnormalities
Stability and Kaizen
The
Toyota Way
Customer First
Continuous
Improvement
RESPECT
For
PEOPLE
Challenge – Kaizen – Genchi Genbutsu
Respect - Teamwork
Lean Transformation Model
SITUATIONAL APPROACH
- Value-Driven Purpose “WHAT PROBLEM ARE WE TRYING TO SOLVE?”
PROCESS
IMPROVEMENT
Responsible
Leadership
CAPABILITY
DEVELOPMENT
Sustainable
improvement
capability
in all people
at all levels
Continuous,
real, practical
changes to
improve the way
the work is done
MANAGEMENT
SYSTEM
Basic Thinking, Mindset, Assumptions
That drive this transformation
How to
improve
the work?
WHAT
is our
PURPOSE?
What situational problem
do we need to address?
What
leadership
behavior and
management
system do
we need?
What is our BASIC THINKING??
How to
develop
the people?
Transformation Model Questions
1. What is our purpose or what problem are we
trying to solve, what value to create?
2. How do we improve the actual work?
3. How do we develop the people?
4. What role must leadership take and how does
the management system support the new way
of working?
5. What basic thinking or
assumptions underlie
this transformation?
Lean Transformation FMEA
Failure Mode and Effects Analysis
TRANSFORMATION of ORGANIZATION XX
FMEA
FMEA Transform ation
Dim ensions
Potential Failure
Mode
Potential Failure
Effects
Dim e n sio n s 1 - 5
Wh a t f a ilu r e s in
th is Dim e n sio n
m a y c a u se
f a ilu r e o f th e
En te r pr ise
Tr a n sf o r m a tio n ?
Wh a t is th e
po te n tia l im pa c t
o n Q u a lity,
De live r y, Co st,
a n d Cu ltu r e
(sa f e ty, m o r a le ,
CI)?
1 . Pu r po se - Wh a t is
th e pu r po se o r wh a t
pr o ble m a r e yo u
tr yin g to so lve ?
2 . Pr o c e ss
Im pr o ve m e n t - Ho w
a r e yo u im pr o vin g
th e a c tu a l va lu e c r e a tin g wo r k?
3 . Ca pa bility
De ve lo pm e n t - Ho w
a r e yo u bu ildin g
c a pa billity to wo r k in
n e w wa ys?
4 . L e a de r sh ip a n d
Ma n a ge m e n t Syste m Wh a t le a de r sh ip
be h a vio r s a n d
m a n a ge m e n t syste m s
a r e r e qu ir e d?
5 . Ph ilo so ph y, Ba sic
Th in kin g, Un de r lyin g
Assu m ptio n s - Wh a t
ba sic a ssu m ptio n s o r
m in dse t u n de r lie s
th is c h a n ge ?
Potential Causes
L ist e ve r y
c o n c e iva ble
f a ilu r e a n d/o r
f a ilu r e
m e c h a n ism f o r
e a c h f a ilu r e
m o de .
Current Process
Controls
Actions
Recom m ended
Wh a t a r e th e
e x istin g so c ia l o r
te c h n ic a l
syste m s o r
pr o c e sse s th a t
pr e ve n t th e
f a ilu r e m o de o r
its c a u se ?
L ist
Co u n te r m e a su r e s
to r e du c e th e
Pr o ba bility o f
Occurrence of
th e f a ilu r e m o de
o f c a u se .
After Action Review
Wh a t a c tio n s
we r e ta ke n , wh a t
e x pe r im e n ts
r u n ? Did th e y
h a ve in te n de d
r e su lt? Wh y o r
wh y n o t? Wh a t
wa s le a r n e d?
Transformation FMEA
Quick-Check
FAILURE MODE
PURPOSE
PROCESS
PEOPLE
LEADERSHIP
THINKING
EFFECT
CAUSE
Transformation FMEA
Quick-Check (examples)
FAILURE MODE
EFFECT
CAUSE
PURPOSE
Agreement
Conflicting
policies
Poor
communication
PROCESS
Quality
Much scrap and
rework
Workers and
leaders rely on
final inspection
PEOPLE
Right skill levels
Don’t perform jobs Unclear hiring
properly
standards; no
standard training
LEADERSHIP
?
?
?
THINKING
?
?
?
State of the LIT Summit 2013
• Terminology “alphabet soup”
– TQM
– WCM (World Class Manufacturing)
– TPS
– Toyota Way
– Six Sigma
– Lean Startup
– Japanese terms – two that matter
•  KAIZEN
• GEMBA
Lean…
People & Process – aligned by
leaders to achieve purpose
Lean Enterprise
Transformation Model
What’s the PURPOSE?
•How to improve the work?
•How to develop the people?
•What leadership role and
management system?
What’s the BASIC THINKING?