In the mid ‘80s, I was involved in the business transformation of an Aerospace manufacturing business who were suffering from long manufacturing lead-times, high stocks, poor customer schedule adherence and high backorders. As a consequence, customers lacked confidence in the business. Simple analysis showed that during the manufacturing and assembly processes, only ½ to 2% of the lead-time was taken up by value-adding operations and it was clear that a lean manufacturing transformation was urgently needed.
Our efforts focused on delivering the right elements of lean manufacturing – rationalisation of manufacturing routes, cellular manufacture, simple manufacturing flow, cell level scheduling etc. Programme and project level business cases were developed but these were seen as hurdles to overcome rather than a statement of the real business needs.
The programme delivered a successful lean transformation with many examples of good and innovative practice, however a few years later the business was targeted by the Group as an example of high inventories. This was inconceivable to those of us who had worked so hard to re-engineer the manufacturing processes. We returned to the business to look at what might be done, armed with the latest ideas and good practices but with a concern that things were about to get very complex.
In the end, the answer was straight forward. The business had done much to reduce the actual lead-times very significantly but the lead-times in the planning system remained unchanged. In effect the planning system was over-loading and over-stocking the factory. Once the planning lead-times were reduced in line with the actual lead-times, the stock levels fell dramatically, in line with the original business case.
Whilst the original Lean Programme was created to address real business needs, those of us involved became so focused on delivering the lean practices that the business benefits were neglected. The programme was closed when the lean prescriptions were implemented not when the benefits were delivered. Hence they never materialised.
It seems to me that this lesson is quite common in transformation programmes. Once a programme is labeled by a theme or methodology (eg Business Systems implementation, Lean Transformation, Culture Change), everyone’s attention focuses on the implementation of good practice with the loss of the business case
If you are a business leader seeking a transformational change, it is vital that:
- a business case is created for the programme (and if possible the separate projects within it);
- the business need is restated and reviewed in all the major programme meetings;
- benefits are tracked from early on in the programme and lessons are learned if the benefits are not being realised in the way that has been planned;
- the programme remains open until the projected benefits are achieved.
Hartswood Management Ltd
Removing the roadblocks to delivering real improvement