George Koenigsaecker, Leading the Lean Enterprise Transformation
From Manufacturing & Technology News
May 16, 2001 Volume 8, No. 9
another long article, full of learning, highly recommended for the CEO learning to turnaround their org to obtain and read.
KEY POINTS
I'd put Jake Brake today as approaching lean. They are making 4.8 times as many engine brakes per hour than they were a decade ago -- a 480 percent output increase. That is the kind of metric that is possible with a full-scale lean conversion.
Q: What are some of the difficulties in starting a conversion away from batch and queue to flow manufacturing?
Koenigsaecker: We have a mindset that if you apply a tool, you've done it and you're done. So we go in and build cells, apply standard work and typically get on each pass a 40 percent productivity gain. But to get the 400 percent gain you have to pass it at least 10 different times. You must restudy the process over and over.
That is a counter-intuitive thing. People say the words continuous improvement, but we just don't believe in continuous improvement. The idea that you can take a series of tools and apply them again and again to the same area and every time you apply them you find new levels of waste and new ways to improve doesn't feel right. If you take 10 firms that started on lean, eight of them quit after the first pass because they got a significant improvement of 40 percent. They thought that was the end of the journey. It's a small number that have actually learned the lesson that if you keep applying the tools the gains keep coming.
… they were producing four times as many product models because they were trying to grow their way out of the recession with proliferation. So their job got four times as hard but they got twice as productive and reduced their unit costs by 28 percent.
It caught my attention. I thought, "Wow, if they could do that we can be in big trouble."
Rockwell Automotive was a producer of heavy truck components and was usually number one or number two in North American market share in every product we made. We thought we were a pretty good benchmark. We found firms making identical products that were running at 400 percent of our productivity level and 10 times our inventory turns and one-tenth our defect rates. There were huge, order-of-magnitude differences.
One of the shocks for us was that they weren't just four times as productive in the factory. As we double checked, we found that they were on average four times more productive in all the staff departments when you measured in terms of company sales per person in the finance department. That really reaffirmed the magnitude of what I had seen at Yanmar, which wasn't even lean yet.