I believe when Lean principles are properly understood and applied, the upside for productivity improvements is nearly infinite. I have personally witnessed numerous Lean thinking initiatives that have improved productivity by large amounts (like 40-60%) in short periods of time with minimal expenditures. The Lean track record is well documented by numerous authors.
Despite the enormous popularity of Lean, the track record for successful implementation of the methodology is spotty at best. Some recent studies say that failure rates for Lean programs range between 50 percent and 95 percent. The basic reason why the implementation of Lean fails at most companies boils down to the culture.
In my experience these are ten reasons why Lean implementation fails:
- No Strategy
Companies must determine ahead of time what the vision and direction will be. A proper strategy must assign clear responsibilities and show what resources are to be committed. Metrics and timelines must be defined. Management must decide what core elements are to be deployed and the order of deployment. They also must determine where to start and how Lean will expand throughout the operation. Finally, the strategy should anticipate problem and recovery scenarios. This is critical. Companies can fail by attempting too much. They also can fail by attempting too little and assigning the initiative to a "backburner" status.
- No Leadership Involvement
Lean requires top-to-bottom leadership of a special kind. Lean leaders are firm and inspiring, relentless and resilient, demanding and forgiving, focused and flexible. Above all, they have to be smart and highly respected in the organization. Every successful company has at least one of these leaders. These people must be a passionate part of the Lean leadership team.
- Relying on Lean Sensei/Champion
Expertise obviously is necessary. So is critical mass. There must be a sufficient amount of knowledge among a sufficient number of people for lean to work initially and spread. Further, the expertise must reside with line people as well as staff. Everyday support must come from important, respected line managers who have the most to gain or lose and have the power and authority to make things happen. Reliance on an outnumbered staff expert who has no line authority to implement lean simply is not realistic. Deployment and implementation can fail before it starts without a strong implementation team
- Copying Others
Some enterprises think they will get desirable effects by applying Lean tools that others have gotten great achievements. Successful implementation of any Lean tool must be closely related to the management philosophy So we can’t succeed by imitating and copying practices of others indiscriminately, it must be combined with local culture.
- Thinking Lean Is A Tool
Lean implementation can not be treated as a delegated "project." Lean manufacturing is not a project. It is a fundamental change in the value delivery system. Top management must be in front of this.
- Lack of Customer Focus
Many companies do Lean for internal cost reasons rather than external and customer-focused reasons. The focus of Lean is on providing the customer with more value sooner. Without customer focus, Lean management techniques are difficult to employ.
- Not Engaging Employees
Employee participation in project decision making is a main principle affecting innovation, productivity, and work satisfaction. Workers typically have more complete knowledge of their work than does management; hence, if workers participate in decision making, decisions will be made with better pools of information.
- Not Educating Employees
Lean training is crucial, obviously. But the content, level, and depth vary by the company and its needs, activity, and function. It goes back to the business case. Training needs to be appropriate for the Lean elements to be deployed.
- Lack of Understanding
Most management teams don’t understand Lean. When we don’t understand something it is next to impossible to support it. This lack of understanding of Lean by management allows even the most subtle of things to derail Lean efforts.
- Conflicting Metrics
Lean requires metrics that focus on the processes of value creation and their associated costs. Traditional cost accounting techniques such as absorption, as well as individual machine and employee performance, can cause a lot of non-Lean behavior. Lean accounting ties directly to financial measures but focuses on performance of the entire value delivery system.
Lean implementation is not simple or easy. However, results show that, when done properly, Lean lives up to its promises. Lean and its elements work. All of the failure modes presented here can be avoided or overcome.