Metrics drive behaviour. In Business this is a truism and in our Lean Transformation we must accept this and address it if we are to be successful.
If your Metrics aren't balanced and aligned with a Lean Value Stream, your team members will not drive toward the right solutions and failure to transform to Lean Thinking will be assured.
Consider a situation where asset utilisation is a key metric for a site manager. This will drive an output / push strategy and any efforts to move toward lowering inventory and creating a pull system will be inhibited as the site manager protects his/her need to meet the asset utilisation target. There is a similar conflict where under-coverage is not accepted as a consequence of lowering the inventory 'water-level' when we start to lean out the value stream.
The extension of Lean into the Supplier base also suffers from the traditional way that Purchasing colleagues are measured, with cost-down on the invoice price being the key metric. This prevents moves to reduce value stream lead-time by using localised suppliers and lowering MOQs (Minimum Order Quantities), as full containers from half around the world provide the trump card in the price / unit measure.
So how do we tackle this issue? Through the development of balanced Lean Metrics based upon the ESQSCI model:
Employee engagement - No. of Implemented Kaizen per person per month
Safety - No. of 'Near Miss' resolutions per person per month
Quality - RTY (Rolled Throughput Yield)
Service Level - Dependent upon the industry but measures such as OSA (On-Shelf Availability); Requested Line Item Performance; Up-Time; On-Time in Full; etc.
Cost - Total Cost per Item (Product or Service)
Inventory - Total Inventory in the Value Stream
This should be combined with an overall Value-Stream Lead-Time metric which will not allow management decisions (capital investments, sourcing of suppliers, industrial footprint, etc.) that will increase the value stream lead time and an actively managed target to continuously reduce it.
The 'Carrot' that we use to enable the right behaviours in our teams is critical and getting those Metrics right is critical, with the final element being to ensure that all employees have ultimately the same metrics driving them all in the same direction!
Leadership is weak, uncommitted to Lean Thinking, and lacks skill and deep understanding. A dramatic change must take place to support and sustain a Lean transformation that starts with a diligent and disciplined focus on self development.
I have observed this phenomenon in a number of Lean Transformations, as Leaders espouse Lean and desire the results that they believe it can bring but are unable (or unwilling) to understand what that means for them and to make the changes necessary in their behaviour to enable the Lean Transformation.
So what is the solution?
Lean Leadership must be central to the business' Lean Transformation and we need to have the courage to stop the transformation if the leadership are not playing their part; actively defining the 'Burning Platform' for change, running Kaizen Events and going to the Gemba to perform Problem Solving, Kamishibai, Coaching and their Leader Standard Work. The model / approach that we use for deployment must include these elements as central and fundamental to success.
Coaching and the development of the Leadership needs to be undertaken by People whom they can trust and respect; not only for their understanding of the Lean Tools but for their Holistic understanding of Lean Thinking and how this interfaces with the Business Strategy. Only when the Leadership can see that Lean Thinking is an integral part of their Business Strategy, and not simply an improvement initiative, will they fully grasp necessity for change (see my earlier posting).
My advice is to take some Hansei time and reflect on whether your Lean Transformation has this Critical Success Factor embedded and whether you've given yourself the chance to succeed.
"I aim to promote the global sharing of best practices in the application of Lean Thinking."