Lean Thinking for Italy

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Industriali Reggio Emilia
July 19, 2005
Lean Thinking for Italy
James P. Womack, President, LEI
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Whats Lean Thinking? (Step 1)

• Specify value from the standpoint of the
  customer.
• Hint
• Many customers today want their problem solved,
  not just to obtain an isolated good or service.
• Remember
• If value is incorrectly specified everything done
  will be muda!

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Whats Lean Thinking? (Step 2)

• Identify the value stream
• The set of steps that must be taken properly in
  the proper sequence at the proper time to create
  value for the customer.
• A value stream is a process by another name.
• Remove the waste ( steps that add no value.)

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Whats Lean Thinking? (Step 2 Contd.)

• Once youve removed the wasted steps
• Make sure that the rest of the steps are
• Capable (Six Sigma standard work poka yoke.)
• Available (Total Productive Maintenance right
  materials at the right time.)
• Adequate (Theory of Constraints and Toyota.)
• Flexible (Toyota.)

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Whats Lean Thinking? (Step 3)

• Make value flow smoothly from concept to launch
  and from order to delivery. (Toyota.)
• Hint
• Draw a map!

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Current-State Process MapOrder Entry
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Future-State Process MapOrder Entry
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Whats Lean Thinking? (Step 4)

• Only provide value at the pull of the customer.
  (Toyota.)
• Hint
• Create a one-to-one relation between information
  and action. Make sure that nothing is done until
  the next step asks for action and that the action
  taken is precisely the action requested.

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Whats Lean Thinking? (Step 5)

• Continually pursue perfection ( perfectly
  specified value with zero waste.)
• Hint
• Practice policy deployment for your entire
  organization and A3 analysis for each value
  stream.
• Dont kaizen and kaikaku with overall direction!

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Adopting Lean Requires

• Many tools
• Standard work
• Set-up reduction
• Poka yoke
• 5S
• Heijunka
• 5 whys
• Value stream maps
• A3
• Target costing
• Policy deployment
• Concurrent engineering
• Chief engineer for each product familyEtc.

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Adopting Lean Also Requires

• Creation of a complete business system
• Product development
• Supplier management
• Customer management
• Production and logistics
• Policy management

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Lean Today

• Rapid rate of adoption
• Toyota marching from victory to victory!
• Lean now being adopted in manufacturing in
  high-wage countries, like Germany, and low-wage
  countries, like Poland and China.
• Lean now spreading rapidly beyond manufacturing
  to logistics, distribution, retail, healthcare,
  maintenance, and even government.
• How can every organization make a lean leap?

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Some Advice from Toyota

• We get brilliant results from average people
  managing and improving brilliant processes.
• Our competitors get mediocre results from
  brilliant people managing around broken
  processes.
• When they get in trouble, they try to hire even
  more brilliant people.
• We are going to win.

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Questions on Path to a Lean Future

• Have you defined your most important processes?
• Do you have a plan for every process? (For any
  process?!)
• Who is responsible for continuously evaluating
  and improving each process?
• What technical assistance will this person need?
• Have you developed the technical means needed to
  perfect processes outside of traditional
  manufacturing operations?

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Barriers to Lean in Italy

• Lack of practical lean knowledge.
• Toyota is not present.
• Most multinationals operating in Italy are far
  behind Toyota.
• Most local firms have received no practical
  advice on lean from firms or sensei with real
  knowledge.
• Love of creativity, which is actually
  work-around re-invention. (Substitute kaizen
  and kaikaku to fundamentally improve processes!)

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A Lean Strategy for Italy

• Develop better methods of teaching lean knowledge
  to Italian managers.
• Hint
• You learn on the gemba, not in classrooms.
• Demonstrations of lean methods are vital!
• Foster cooperation between firms in Italy to
  share knowledge (e.g., breakthrough examples) and
  improve supply base (to compress value streams.)
• Get leaner faster!

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Lean Strategy Beyond Manufacturing

• Most of the Italian economy is not involved in
  manufacturing.
• Lean techniques also apply to retail,
  distribution, services of any type (including
  travel tourism), healthcare, construction, and
  government (except policy making?).
• Take the lead in applying lean techniques in
  these areas!
• Some real invention will be required, but
  Italy has always been very inventive!