In its first interview of 2013, TM's sister publication Lean Management Journal speaks to one of the world's best known lean gurus, Professor Daniel T Jones to hear about the most important issues - and opportunities - facing the global lean community.
Previously appeared on Lean Management Journal
Roberto Priolo: Given your unique experience as one of the world’s leading experts on lean, what is your opinion on how the methodology has evolved over the years and where do you see it going next?
Daniel T Jones: I think the lean movement is facing an important threshold. There is a growing incompatibility between external and internal consultant- and staff-driven programmes to teach tools to eliminate waste and the essence of a lean transformation.
At its core, a lean transformation is about solving specific business problems in their context by developing the skills of line managers and team members to unblock the flows of value creation in their value streams. Management’s job is to enable this work, to provide clear direction and to engage everyone in the organisation, and not just experts, in using the scientific approach in stabilising and improving the creation of value for customers.
While solving a problem is fine, the lasting value is the capability to solve the next set of problems: success is judged by the ability of the team to sustain and improve after you leave. This is how Toyota judges the success of its managers, ensuring a consistent focus on building solid capabilities in the line. Lean capabilities are ultimately a line responsibility.
RP: Most companies seem to struggle to understand that value flows horizontally in a business, across departments and functions, and to move away from a vertical structure. What do you think about this?
DTJ: Toyota itself is as vertically organised as any organisation. This is the right way to deploy knowledge and resources. But the company has also found a way to manage the horizontal flows of value creation that cross these vertical pillars. Strong value stream engineers gain agreement across functions on the actions necessary to streamline the whole end-to-end value stream, with strong top management support but no authority over the resources necessary to accomplish these actions. This is a conundrum other organisations will have to learn to solve.
RP: Another question on Toyota. What do you make of the recent recalls?
DTJ: Toyota is not perfect and it grew faster than its ability to grow the capabilities of its associates and suppliers. It is still the model to learn from in using the scientific approach in everything we do – just look at how it is going back to basics in response to these difficulties.
RP: Supply chains seem to be on everybody’s mouth, and this links well to the importance of seeing the whole value stream. What advice would you give companies that are trying to achieve this?
DTJ: As we wrote in The Machine that Changed the World, the logic of lean is to build design, production and supply bases in each major region. Long supply chains across oceans in search of low wages can never ultimately compete with closely integrated supply chains responding quickly to demand. This is now beginning in all kinds of organisations, from GKN to Bosch, GE, Apple, Nike, Hugo Boss and so on. The challenge is for multiple organisations and different functions within those organisations to see the whole value stream together in order to design the appropriate, compressed supply chains for the next generation of products.
RP: IT is the new frontier for lean. At a recent summit in Paris, you talked about the contribution it can give to a company that is implementing lean thinking. What conditions need to be in place for this collaboration between lean and IT to be successful?
DTJ: Trying to automate processes before leaning them out leads to disaster. Strong line management able to define the needs of the process is the right basis for designing IT systems that enhance the flow and speed up communication along it. Lean and IT folks with very different assumptions need to learn to work together.
But the ultimate contribution of IT and the web is that they open up quite new process opportunities and business models for helping consumers create more value in their lives. The key is to see consumers and the processes they go through to create this value as an integral part of the extended value stream, from design through to production to ongoing support in use. We have only just begun to think through the ultimate possibilities opened up by lean thinking and the web.
RP: Arguably, the most difficult thing to achieve when implementing lean is making sure that results stick. The proof of success is in sustainability. Can you project on this a bit more?
DTJ: Lean folks have often worked bottom up, whereas now we also have to work top down, focusing on delivering concrete bottom-line results for the business through creating more value for customers. These results take the form of growing sales through better products and delivery, freeing up cash from compressed value streams, reducing cost by stabilising the work and aligning capacity with true levelled demand and freeing up capital expenditure by buying right sized tools and investing these gains in new solutions for the web era. Interest in lean will only be sustained if we can be seen to be to delivering these business results.
RP: LMJ is delighted to be developing a strong partnership with the Lean Global Network. The Network has been providing invaluable help and guidance to the lean community for years. What is the next step?
DTJ: The core task of the Lean Global Network is to develop new lean knowledge out of the experimental projects they undertake with pioneering organisations around the world. It would make sense to share these stories and this knowledge through the LMJ.