By Paul Yandell | Supply Chain Quaterly | Quarter 1 2011 issue
By laying the proper groundwork and working effectively with their peer group, middle managers can gradually implement lean practices and make big operational improvements—without leadership from the top.
For change to occur in business, three factors—need, vision, and ability—must come together. This can be expressed as a formula: Rate of change = f (need x vision x ability). Put a different way, if there is no perceived need for change, there will be no change. If there is no vision of what the change should be, there will be no change. If there is no ability to change—no skills or authority to make meaningful improvements that will last over time—there will be no change.
Many supply chain managers are quite familiar with this principle. They may recognize that change is needed somewhere, but because their concerns relate to operations (rather than to a “big picture” issue), they may have trouble first, convincing upper management that change is necessary, and second, getting them to understand what that change should encompass. This is particularly difficult when manufacturing (the main focus of this article) is involved. One reason why is that executives are unlikely to embrace major changes unless they see evidence of a crisis. Another is that most chief executive officers (CEOs) and other business leaders come from sales and marketing or finance. They tend to pay attention to manufacturing only if costs are high or quality is poor, and few know what it takes to improve manufacturing processes. They may have heard of quality management tools like Lean and Six Sigma, but it’s a rare CEO who really understands them. Thus, even if top executives recognize the need for change, they may not have the ability to make the right kind of changes happen.
But change does not always have to come from the top down. When improvements are needed but one or more of the three enabling factors are wanting at the highest levels, then middle management must step up and take the lead. How? By becoming “guerrilla managers.”
Unlike traditional military leaders, whose main source of power is their obvious authority, “guerrilla” fighters have few resources, operate “under the radar,” and may work within a loose chain of command. The analogous guerrilla manager—in essence, a middle manager with a leadership agenda—faces similar conditions.
Despite those constraints, it’s entirely possible for a guerrilla manager to implement Lean in the supply chain with top management support but without top management leadership and with virtually no investment required. But it requires working carefully within the system, not subverting it or overthrowing it.
This is not just theory. What started as a guerrilla Lean initiative at my former employer, a mediumsized manufacturer, was extremely successful. In a remarkably short period, manufacturing lead times dropped from two weeks to two days; manufacturing defects declined by 90 percent; inventories were cut by 50 percent; and profits doubled even as sales remained flat. Additional documented benefits included identifying and using up several hundred thousand U.S. dollars’ worth of overstocked and mismatched parts, a 40-percent reduction in the number of suppliers, and a 30-percent reduction in space requirements—all without any stockouts. These improvements earned the company a regional Shingo Prize for Excellence in Manufacturing in 2007.
To implement Lean from below, you’ll need to follow some specific steps. First, you must gain personal credibility as a leader through self improvement. Second, you must cultivate an awareness of and respect for the power equation in the organization. Third, you will need to recruit like-minded individuals in the organization to help carry the initiative forward. And finally, you can gradually implement lean practices within your sphere of influence. As lean tools such as visual management systems and kanban (visual authorization to perform production tasks) take hold, the effort can be expanded to other departments, cascading throughout the entire organization and moving the company toward adopting a lean culture.
Establish credibility as a leader
If you want to lead, others must have a reason to follow you. It’s relatively easy for upper-level managers, who have the positional power necessary to drive change, to get employees to follow their lead. A middle manager, by contrast, has to rely on his or her personal abilities to influence and persuade co-workers. In other words, you need to be able to rally others to your cause.
For a middle manager striving to lead, then, personal drive and attitude, coupled with strong communication skills, are a must. That may not come naturally to everyone; I recommend Dale Carnegie’s powerful book on the subject, How to Win Friends and Influence People, as a must-read for anyone considering becoming a guerrilla manager. If you’re uncomfortable speaking in front of others, public speaking programs such as those offered by Toastmasters International will be very helpful—not just for overcoming a fear of public speaking but also for learning how to plan and prepare presentations. Take advantage too, of opportunities to teach or coach others. Teaching not only informs the students but also improves the teacher’s communication skills.
It’s not enough, of course, to be able to speak persuasively. You also need to know what you’re talking about! Otherwise your qualifications to lead a project will be questioned. Accordingly, managers must possess strong technical skills, such as expertise in Lean and Six Sigma, and a deep understanding of supply chain management and/or manufacturing.
Additionally, guerilla managers need to be wellversed in the general management concepts and terms of the day. Read anything and everything about leadership and management issues, as you will learn something useful from almost anything you read in those areas. Accounting is the language of business— learn it. Know your cost drivers and understand how your company makes money. Showing how your initiative will reduce costs and increase profits is the best way to win support for any program, at any level in the organization.
Lastly, dress for success, and always be on time and ready to go. Don’t let your personal appearance or habits detract from your effectiveness as leader.
Respect the existing power structure
If you are to have any chance of receiving support for your initiative from your superiors, you will need to “manage” your boss. There are two critical requirements for making this work.
The first is to balance your own agenda with that of your superiors and of the organization as a whole. Always identify and fulfill your manager’s agenda before yours. For example, if your boss is concerned about meeting a certain deadline or solving a shipping problem, then you should meet that deadline and solve the shipping problem. If you want to implement a kanban system but your boss is mostly concerned about staying within his or her budget, make sure your initiative supports that objective in some way. Remember, if your superior is successful, then he or she will command more resources and opportunities for subordinates, including you.
A corollary piece of advice is to find out what your manager lacks, and then provide it. Some managers are poor communicators or have poor supervisory skills. Others may be good communicators but lack technical knowledge. It is the subordinate’s job to identify and fill those gaps. Be sure to establish clear objectives and expectations regarding your contributions (as well as how to measure them), and only then move forward with your own agenda.
The second requirement is to regularly provide timely, accurate information about the projects your boss has assigned to you. You can keep you manager informed by regularly reporting key process measurements (KPMs); a good approach is reporting weekly but sharing numbers informally each day. Keep your communication brief and to the point, a single page if possible. Focus on data, and use graphs and charts to show trends so your manager can absorb the data quickly.
The weekly briefings should also lay out general directions and major milestones. Keep the same reporting format week to week; this will make it easy to scan for changes. Be sure to also maintain continuity. For example, don’t identify something as a big issue one week and then not mention it in the following report. You may get some feedback on some numbers, especially if they vary greatly from week to week, and some comments on projects that the boss is anxious about and are not showing significant progress. Learning how to respond to these sorts of questions will make you a better communicator.
Even if your boss likes a one-on-one update, a formal report sets the agenda and serves as a permanent record of events. Share the report only with your direct superior and your own team. Do not send it to higher-ups, or it will feel like you are sharing too much and inviting interference. Your boss can share it if he or she wants to. Remember, you are managing your boss, not setting him or her up to feel uncomfortable.
The regular reporting system you establish has a secondary purpose in that it allows you to set a management agenda. In addition to a review of the projects your manager has assigned to you, the report should include a brief rundown of your lean side projects—your personal agenda for improving operations. Doing so keeps your boss in the loop (no surprises). No news is good news, they say, and that is true here as well: no response constitutes a tacit approval of your agenda. Keep driving forward in the absence of intervention from your boss. You now have a platform from which to grow and lead.
Rally the “troops”
Running an operation requires a team effort. To be an effective midlevel leader, therefore, you need to build a team of like-minded change agents. You’ll get to know them soon enough; they are the ones who are most engaged and most respected at work, not for their position but for their skills. They will include informal leaders as well as some of the formal leaders. Don’t ignore the outspoken “negative” people. Their passion, though currently misguided, can be turned to good once they are engaged in a meaningful way.
Once you’ve connected with co-workers who support and want to be involved in your guerrilla Lean effort, you’ll need to establish a common language and understanding of both the issues and the opportunities at hand. Bring-your-own lunches where you and you colleagues can watch videos about lean principles or share readings from publications such as the James Womack and Daniel Jones book Lean Thinking are good places to start. Watching videos such as Hoosiers that speak to a broader audience about teamwork may be helpful on occasion as well. More formal efforts, such as teaching an introductory class in lean manufacturing during lunchtime or attending an off-site class as a group, will accelerate progress. Keep your expenses low—remember, you probably won’t get funding until you show some concrete results from your efforts.
When the group has a common understanding of lean principles and has reached consensus on the objectives of the lean manufacturing project, you are ready to move forward with kaizen (continuous improvement) events. A kaizen event brings managers, operators, and technical people together to address a particular process. The group evaluates the process steps in terms of what adds value and what does not, and then focuses its efforts on eliminating the non-value-added steps. Repeating this process over and over again yields continuous improvements that eventually benefit the entire organization.
The traditional place to begin kaizen is with value stream mapping (VSM). Simply put, VSM involves documenting and visualizing your current, end-to-end processes to create a “current state map.” After identifying and eliminating waste in the current process, you develop an idealized process flow called the “future state map”—a representation of the improvements you will strive to achieve.
The VSM effort should encompass the entire company’s operation, even if much of the system falls outside the purview of your band of guerrillas. That’s because it is important to remember that all actions take place inside a larger system, therefore the effect of those actions on the entire system must always be considered. In the same vein, it is very important that lean efforts be consistent with the entire company’s agenda and philosophy. This is not a coup, but rather an effort to improve the organization for the benefit of all.
When the stage has been set and everyone understands and has agreed on the objectives, you can begin to implement Lean in your manufacturing operation. (These principles can also apply to supply chain, logistics, and even office management, by the way.) Choose your first kaizen efforts carefully, keeping in mind that you will need to gain support from both management and your peers.
Start with areas over which you have direct control, and look for early kaizen victories to generate visible gains and create a buzz in your organization. An easy, logical place to start is the “5Ss,” a series of workplace practices that are conducive to lean production. (“Ss” refers to the Japanese names of these practices.) They include:
1. Sort (Seiri): Separating needed from unnecessary items—tools, parts, materials, documents—and discarding what is not needed
2. Set in order (Seiton): Neatly arranging what is left, making sure that everything has its place
3. Shine (Seiso): Cleaning everything
4. Standardize (Seiketsu): Cleanliness that results from regular performance of the first three steps
5. Sustain (Shitsuke): The discipline to perform the first four Ss
The 5Ss, in fact, are the first element of a very useful framework for your initiative, a simple model called the Four Drivers of Lean Manufacturing:
- Workplace organization (the 5Ss) ensures that each operator has a clean, safe, workstation equipped with all the tools and materials needed to perform an operation. There is no clutter or unneeded materials, and work instructions are in clear view. Work is standardized and audited, and each worker is responsible for his or her own quality.
- Uninterrupted flow minimizes interruptions and shop floor inventory. As much equipment as possible is placed “in line” to ensure a constant flow in production and to minimize bottlenecks. The fewer the parts on the line, the less rework and obsolescence there will be. And the fewer steps in the process, the fewer potential sources of error there will be.
- Quality at the source, or error-free processing ensures quality in every operation, for both internal and external customers. One way to do that is to employ poka yoke, or mistake-proofing, throughout the plant to ensure parts are processed correctly. An example of poka yoke would be a part that cannot be installed if it is not oriented correctly. A critical component of error-free processing is seeking out the root causes of mistakes and eliminating them at the source.
- Single minute exchange of die (SMED)—the quick changeover of production equipment—ensures maximum flexibility in manufacturmanufacturing, so that any number of products can be made in any combination, in any quantity. The aim is to achieve smaller and smaller lot size, ultimately matching lots to orders.
Implementing these four drivers in sequence will quickly simplify and improve operations. Because each driver serves as a foundation of the next one, it is important to follow this sequence to ensure sustainability of your efforts. Only after you are clean and organized, get your processes flowing, and make production free from major defects can you start to improve your flexibility and drive down lot sizes to match order size.
There are several benefits of focusing on achieving early, “easy” successes. For one thing, they will enable subsequent changes within your areas of influence. For another, they will help you bring other people on board. As lean momentum builds in an organization, areas that have not experienced their own kaizen may start their own workplace organizations, implement visual management, and introduce their own production efficiencies.
The “four drivers” will also help you to identify bottlenecks and problem areas you can work on next. You might consider prioritizing projects based on their level of impact on operations and quality. Think about the so-called “80-20 rule”—the concept that 20 percent of a process, customer base, or product array incurs 80 percent of your time, effort, and costs. Anything that falls in the “20 percent” category is ripe for attention.
As you read this, you may wonder: How do you pay for all these changes if you are doing them “under the radar”? It’s a good question, because one key to the success of any guerrilla movement is the ability to operate on thin budgets. Whereas traditional, companywide lean transformations often involve week-long kaizen workshops led by expensive outside consultants, a guerrilla manager, by contrast, can implement Lean with a series of what I call “mini-kaizen.” These are short, narrowly focused meetings designed to educate the team and invigorate their enthusiasm for the improvement opportunity.
A typical meeting might consist of some advanced value-stream mapping and work by the kaizen leader and a few key team members. This can take place in four hours on, for instance, a Tuesday afternoon (you could bring in some pizza at the end of the work day). Or you could meet for a few hours on a Friday afternoon to plan a specific change event, such as improvements to an assembly line or a redesign of the packing area to eliminate wasted motion and materials. The actual work required to make those changes could be performed by the entire team on Saturday. There’s no plant shutdown or lost production time, and the typical weekend change requires fewer than 15 hours per employee. By this point, your boss should understand and support your plan well enough to authorize the minimal amount of resources needed to carry it out. In some cases the returns from this lowcost approach will be visible within a month.
Spread the word!
Although a guerilla Lean initiative should begin in your own area of direct influence, you want other people, departments, and functions to understand the value of Lean and to adopt it in their own areas. Ultimately, you hope to convert top management to lean thinking and help your company move toward a lean culture. How can you share your successes and build momentum?
The color and visual management systems used in lean production will not only serve to organize your tasks but will also help you to publicize the effort. People who are not directly associated with a particular kaizen will actually see the good that you are doing; this will spark their interest, and they will want to get involved.
You should also “brand” the kaizen efforts and publicize the results. When I did this at a former employer, we handed out T-shirts after we completed our first round of kaizen events. Soon everyone wanted to participate! Celebrations are another way to generate positive publicity. Throw an after-hours or lunchhour party and liberally cover the walls with “before and after” photos so everyone can see what you’ve accomplished.
Spreading the word is not just about having fun, though. As part of your publicity initiative, keep the accountants informed. It’s important to get them on your side; they have access to the highest levels of the organization. Share results with them early and often. If guerrilla Lean leads to inventory savings and increased cash flow, they will be genuinely interested and will support investment in additional efforts.
Because an effective lean supply chain starts with sales and marketing, then works backward through manufacturing, materials, and finally, to suppliers, you want all of these departments to be on board with the changes. In reality, this is difficult to achieve even when top management is leading the effort. The leadership skills discussed earlier in this article will help you communicate effectively with all of these groups across the organization. And be passionate—it’s contagious!
Finally, throughout the course of the changes you and your colleagues implement, be sure to keep your boss in the loop. He or she will recognize that Lean is a good thing and will want to participate (even if only to take some of the credit). Always remember: You will be successful only if your superiors are successful.
You can do it, too
Working “under the radar” and without leadership from top management, the successful guerrilla manager must lay the proper groundwork by managing his or her boss, and then work with the peer group to introduce lean tools into the supply chain. This type of effort requires tacit support from top management, but it can be started in virtually any arena by managers who are interested in improving their organizations’ effectiveness. As the kaizen experience builds interest and tools such as visual management and kanban systems take hold, the Lean initiative can be expanded to other departments, cascading throughout the entire organization.
So sharpen up your leadership skills, gather your troops, and carefully move ahead with changes that produce noticeable results. Once you have a good beachhead of successes, you can start preparing plans for major kaizen outside of your areas of control. And … congratulations, your areas of influence have just grown!
Why lean supply chains are worth the effort
Lean manufacturing was originally developed at Toyota. The main thrust of Lean is to identify and eliminate waste at all levels of the production process. Waste can be defined as any activity that does not add value to the finished product or service. Examples include unwarranted transportation and handling, waiting (time in the queue), unnecessary motions, defective product, lack of standardized work, and underutilized skills. Lead time is another kind of waste, in the sense that it includes inventory, rework, waiting, and transportation.
Reducing wasteful activities frees up resources to concentrate on those activities that add value to the product or service. As a result, the manufacturer transfers its efforts to value-added operations, increasing both production and profits.
Because Lean seeks to eliminate wasteful inventory, it is based on the pull system: building and shipping according to customer demand rather than building to schedules and forecasts. To achieve this, the supply chain must be connected to sales and marketing, because actual sales and market events drive both assembly and supply chain operations.
To take a broader perspective, lean enterprises foster a problem-solving culture and systems thinking; that is, they seek to optimize the whole rather than the parts.