Returning from the summer break is the right time to take a fresh look at
your lean initiatives. Are they being led by the right people and are they
realising the true potential of lean in your organisation, and up and down
your value streams? There is still a lot of confusion about what value
stream management really involves.
Most organisations have recognised that implementing lean on the shop
floor or in a department like finance is the responsibility of the line
management in that department. They need support from a lean
promotion office, but must do the hard work themselves for it to stick,
because it involves changing the thinking about how employees work
together as much as moving things around.
But end-to-end value streams almost always cross several departments
and several organisations on their way to the end customer. Yet it is still
rare to find a value stream manager responsible for creating a value
stream that flows out of a set of separately managed activities, or
someone responsible for sustaining and improving the flow thereafter. Yet
we know that if no one is responsible nothing actually happens.
The one place you may actually find such a person is leading a project to
design a next generation product. In Toyota this is the job of the Chief
Engineer. They are responsible for the success of their product family
through several product generations and report through the Office of Chief
Engineers to the top of the company. Interestingly they have few staff
reporting directly to them. Most of the staff report to their function or
department heads. So the Chief Engineer must articulate a case for the
resources necessary to get the next product designed from all these
department heads, including marketing, purchasing and production etc.
But, however radical the design leap being attempted, the task is
essentially one of managing a new variant through an existing
development system. Where you see a more radical leap is when Toyota is
designing a completely new product line – like the original Lexus, the first
hybrid Prius or the low cost vehicle for developing countries. Here you see
a much bigger activity designing the new vehicle and the entire production
system to build it (for several product generations over a couple of
decades). This redesign activity reaches back up each supply chain to raw
materials, through as many as 26 different operations. It amazes me that
many organisations still do not accept the need to take responsibility for
designing their supply base in this way.
When it comes to trying to create a value stream that flows through
several different departments for the first time then we need a value
stream project leader to lead the charge. Like the Chief Engineer they do
not need a big staff reporting to them. They have to make the case for the
involvement and resources from all the departments involved and they
have to report to and get the backing of top management to make the
necessary radical changes.
The next question is who leads and improves this value stream once it has
been created? What knits together a sequence of activities across a value
stream? Not the physical flow – this is an outcome of a previous process –
but the information flow coming back from the customer to the pacemaker
process. So the answer is that the management of existing value streams
is actually the responsibility of a lean planning and scheduling function,
like the Production Control and Logistics Department at Toyota. Not
surprisingly PC&L is at the heart of making the Toyota Production System
work, yet less attention has been paid to how it actually operates than to
physical operations.
Value stream management of an existing value stream starts with
levelling the flow of orders coming from the customer – acting as a
harbour wall to dampen rather than amplify order signals being passed
upstream. Then it involves deciding where the pacemaker should be for
both the products made to replenishment pull and for the build-to-order
products made to sequential pull. Then it is about releasing small
quantities of orders frequently to establish a common rhythm across the
value stream so products flow quickly and activities come to match the
rate and pattern of demand as closely as possible.
Wherever we turn the weak link in our lean activities is the way variability
in the information flow is amplified and passed upstream. As long as this
is not addressed it will be difficult to create the stability necessary to
enable products or patients to flow. Maybe it is time to take a fresh look at
the leadership of your value stream redesign activities and at how your
planning and scheduling department will manage your value streams on
an ongoing basis.
Yours sincerely
Professor Daniel T Jones
Professor Daniel T Jones
