Article by Thomas Bertels

By now, the promise of Lean to help companies achieve a fundamental transformation is well understood. There is no shortage of practitioners who are experts in using the various tools to eliminate waste and achieve flow. However, many companies fail to realize the expected benefits. Using an actual example of a pharmaceutical company which recently embarked on their own lean journey, this article identifies four common failure modes and suggests countermeasures to ensure a successful transformation and sustainable impact.

Lack of middle management support

First, and perhaps most important, any sort of transformation requires strong management support to enact any sort of changes in an effective and lasting manner.

PharmaCo (fictitious name), a mid-sized pharmaceutical manufacturer, saw Lean as an opportunity to dramatically increase capacity to meet customer demand without substantial capital investment. While the Site Head was 100% committed to the success of the transformation and operators on the shopfloor excited to be engaged, the lack of support from middle management nearly derailed the nascent Lean deployment when it challenged the status quo. Despite a substantial investment in training and coaching middle and senior managers on Lean tools and methods.

They saw Lean as a direct challenge to their authority as the chief problem-solvers, and consequently showed their indifference about Lean by not participating in Gemba walks or Kaizen events and in some cases even blatantly rejecting team recommendations (such a refusal to revamp a particular bottleneck in their manufacturing process). Their lack of engagement sent a strong signal to the workforce.

Overcoming their resistance required a clear communication by the site head in the spirit of ‘You or your successor will make this transformation a success’. In some cases, replacing middle managers was necessary, demonstrating to the organization that senior management had a long-term commitment to the program.

Inaccurate baseline data

Reaching a company’s improvement goal (ex. increasing production capacity by 30% within twelve weeks) requires a baseline to improve from. An incorrect baseline makes it impossible to define the goals that need to be achieved in support for the program’s business case. It is quite common to find out that the initial baseline is not correct, resulting in substantial rework.

In the case of PharmaCo, their initial project goal to increase capacity of two critical value streams by 30% within twelve weeks, was based on existing production data. Within weeks after launching the deployment, a review of key performance indicators showed some inconsistencies and revealed that the standards used in the manufacturing execution system (MES) were inaccurate. The company’s production lines were in actuality even less efficient than originally thought. The result was that PharmaCo, six weeks into the twelve-week project, had to revise the baseline, and as a consequence, the overall business case of the project.

Investing into an upfront data collection and diagnostic phase during which a mix of data from the MES had been cross-checked with manually collected data would have avoided this major rework. It would have, in fact, also helped get stronger support from some management team members as trust in data was one of their concerns.

Scope creep

Many companies use a project charter to define the scope, goals, and expected deliverables of their Lean Transformation. Quite frequently, the chartering process involves representatives from various functions and departments, who each see this process as an opportunity to address their specific issues. As a result, the final charter often contains a long, exhaustive list of expectations instead of a narrow, targeted set of goals. And in many cases the process of editing the charter continues all the way throughout the project, making it harder and harder to concentrate the effort on what truly matters.

In PharmaCo’s case, many different groups weighed in on the project charter. The initial goal of achieving a 30% improvement in capacity for two key value streams was supplemented with objectives related other supporting processes such as change control or planning and scheduling. While these processes clearly were in need of improvement it was finally decided to apply a ‘salami’ tactic, i.e. instead of solving all issues the same time slice and dice to problem and address issues one at a time. Otherwise, the project would have never achieved breakthrough results in twelve weeks.

Losing implementation focus

If the goal is to achieve significant improvements in a short amount of time it is absolutely crucial to ensure that improvement actions are not only defined but also implemented.

In the case of PharmaCo, the project team initially struggled to get operators and middle managers in a room for 3-5 day Kaizen activities. They therefore only planned for half or 1-day sessions. The outcome was that process problems were analyzed and improvement actions defined, however, their implementation had to be executed after the Kaizen. This led to endless chasing of people to make them follow-up on their commitments.

After four weeks without seeing any improvements the project team made the case to the management that ultimately people will spend less time on improving the process and will see results quicker if they extended the duration of the Kaizen event and made the improvements during the session.

Conclusion

Ensuring leadership is truly engaged and supports the transformation, establishing accurate and reliable baselines, focusing the effort on a narrow set of critical goals and having an implementation-orientation are four crucial preventive measures one should consider to avoid wasting scarce time and resources and establish the necessary conditions for a Lean transformation to succeed.