This month, LMJ looks at the deployment of lean in Germany, the most virtuous country in the EU and one that has made of excellence a way of life. It’s not just a strong manufacturing heritage supporting the development of new technologies and competitive products, but also the adoption of alternative “approaches” to improvement like the Toyota Kata.
LEAN, A MUST-DO
Bodo Wiegand, president of the Lean Management Institut, introduces LMJ’s special on lean in Germany, looking at how widespread the methodology is in the country.
Lean in Germany cannot be stopped anymore. It started 15 years ago in the car-making industry, automotive supplier being the first ones to be “infected” by lean. Today, there is not a single automotive supplier without a lean production system in place. Lean has developed to a management philosophy which cannot be thought away.
In some companies, however, there is no further development after reaching a certain lean standard: the level of lean development depends on current management and on single managers. That means that when a manager responsible for implementing lean leaves a company, the lean factor in the business will lose power. It will increase its revelance in the company the manager moves to.
This phenomenon shows that lean has not been completely embedded in the mindset of the employees. Sustainability was not achieved. The Lean Management Institut is working on this phenomenon: a combination of intelligent e-learning and training could be the solution to this problem.
Another important step towards a lean enterprise is the expansion of the lean methodology from production to further areas and industries. The Institut is a member of the Lean Global Network, and a comparison is easily made – Germany is far ahead of other industrialised countries when it comes to spreading lean thinking in non-manufacturing sectors and new business areas. Lean Administration, which was developed by the Lean Management Institut, is considered as the next step by both the automotive industry and its suppliers – a lot of companies are already implementing Lean Administration successfully and generate positive effects in terms of efficiency increase and process optimisation, for example in the engineering area.
On the one hand, by implementing Lean Administration companies do not only have the possibility to uncover efficiency potential in the administrative area, but also to improve processes and increase quality. On the other hand, it is obvious that there still is a distinctive silo-thinking mentality in most companies and that just a few businesses are strictly focused on the optimisation of their processes.
Other concepts developed by the Lean Management Institut, like Lean Maintenance and Lean Service, are used in many German firms, especially in the process industry and in banks and insurance companies. In these areas, a combination of Lean Administration and Lean Service becomes important in order to increase the efficiency of internal organisation and to offer customeroriented services.
In manufacturing companies, the alignment of maintenance with value creation is a large and important field of development in addition to optimisation of business processes. These potentials, however, are used by just a few market leaders today. The goal is not only to save costs, but also to increase availability of a company’s facilities as well as process stability in order to stabilise and make usage of product capacities reliable. There are initial attempts to use lean in the public sector and hospitals, but not a broad movement yet.
DOWN WITH DOWNTIME
At Kirson we face unique challenges. Not only do we operate in a very niche market (we have only a handful of competitors), but we also have processes that can be difficult to lean out. We produce laid scrims (grids made from yarns and used to reinforce different materials and products, from roofs to sails), and sometimes the production of a single piece can last 72 hours.
Takt is long and changeovers take a long time. Whereas many manufacturers assemble, we operate in the process industry: for us one piece flow is not easy to achieve.
With such processes in place, we had to find a way to become more efficient. About 11 years ago we started to look at downtime and how to reduce it in order to increase capacity. Eight-hour changeovers were too long compared to a production time of two or three days. We started implementing lean after visiting a few seminars and after everybody in management had read “Lean Thinking”.
We soon identified the need for us to take it to the next level, and that’s when we looked at Toyota Kata, an improvement methodology discussed in depth by Mike Rother. The Kata is based on the idea of making small improvements and learnings by identifying and fixing problems as you strive towards a challenging target condition. People blindly started to copy Toyota using tools such as Kanban and JIT, thinking they had found solutions to their problems. The reality is that Kanban is used to see obstacles that hinder you to reach a desired state – and not to fix problems.
Regular development and people empowerment are the two main features of the Kata methodology. Coaching is fundamental: we have made every worker on our shopfloor an inventor. The Kata helps them to continuously do something about the problems that arise while striving to achieve their target conditions or standards.
What prevents development in companies is not working consistently as a result of missing challenging target conditions and a learning routine or Kata to achieve them. In Germany we always want the great ideas and inventions, but the Kata is about slow improvement by everyone and every day. I am convinced that you cannot innovate without using it.
When Gerd Aulinger started to work with us two years ago as a Kata coach, he looked at our improvement (we had reduced downtime on some machines from 60 minutes to 8 minutes) and challenged us, saying: “I am sure you can reduce it to five minutes.” Protesting is dangerous, because you can be proved wrong: in the next shift we managed to reduce it to five minutes. That’s only because we were building on already existing improvement.
We still have a long way to go. Changing from one pattern to another can involve 100 to 150 jobs, and simply cannot be done quickly. That is why we practice the improvement and coaching Kata on a daily basis.
Engineers are used to big plans: you often see six-month plans and then problems at the point of implementation. With Kata you have no big plans, just challenging targets and small steps or PDCAs. Now we really understand what continuous improvement is.
Christian Berlinecke, production manager at Ihlemann AG, talks about the benefits the firm reaps from deploying the improvement Kata in order to better react to a constantly changing demand.
With over 200 employees, we are one of Germany’s largest Electronic Manufacturing Services providers. We produce components and devices for industries ranging from wind energy to housing.
We first deployed lean three and a half years ago, and started using Toyota Kata about two years ago, to help people to identify problems and tackle them while making processes more stable. We coach our employees every day and put them in charge of improving production step by step.
At Ihlemann, we always apply what we learn from constantly trying to move beyond our current knowledge threshold. Thus we ask ourselves questions all the time, because you need to understand a problem in order not to jump to solutions too fast. If we have a problem, we stop production. It makes sense to stop the line for 10 minutes rather than having to do rework for two hours at a later stage. We apply PDCA, step by step, and this way we manage to eliminate issues once and for all.
Our main challenge is reacting to constantly-changing demand. We have seen several benefits from the application of lean and Kata: less quality issues, better output, more happy customers and a faster value stream. We don‘t produce from stock: we only make what we can sell. As a result, we have more free capacity to answer demand. Our value stream is now over 50% quicker.
If you want to implement the Kata, leadership needs to be aware and convinced. They have to be good Kata coaches, because it is quite hard to start from the bottom up. Coaching is very important for the improvement Kata to become second nature, and leaders have to be Kata experiences to become good coaches. It’s like driving school: you don‘t learn how to drive a car by reading a book, but through practice.
No matter what sector you operate in, you can only reach challenging targets if you practice a learning routine or Kata every day, involving everybody in step by step improvement, thereby developing an “explorative” mindset, motivating people and making the company more adaptive and competitive in the long run.
Gerd Aulinger, Kata coach, comments
Companies tend to concentrate on deepening their core competencies, which are essential for profitability today and in the near future. But should they assume these competencies, will this also keep them profitable in the long run? Many companies are overrun by competitors who, by developing innovative solutions to old problems, force them out of business. To survive in the long run organisations must also concentrate on their “core INcompetencies” – those non-existing capabilities that will be indispensable for long-term competitiveness and survival.
Moving out of our comfort zone, even leaving behind much of our current knowledge and experience, calls for a different way of managing in which everybody is motivated by challenge and, at the same time, taught how to learn in a scientific, concerted way. Moving beyond our knowledge threshold is not easy, because it needs an “explorative” mindset, one that seeks learning, enjoys experimenting and striving toward difficult-to-achieve target conditions. Unfortunately, as a result of repeatedly applying ROI (cost-benefit analysis), most companies have developed a conservative mindset, which tends to prefer predictability, exactly the opposite of what we can expect of scientific work.
The improvement and coaching Kata (routine) allow us to develop an explorative organisational culture by having every member of the company strive step by step towards challenging target conditions and tackling the obstacles that arise as they move ahead.
Pfeiffer Vacuum develops, produces, sells and services vacuum solutions. Here, chief operating officer Matthias Wiemer discusses the company’s lean journey.
When we talk about our lean project, we refer to a part of our product line, which is related to high vacuum and represents about 27% of our total sales. Our core product, the turbopump (which Pfeiffer invented over 50 years ago) is mainly produced in Asslar, central Germany, but we have other facilities in France, Korea and Romania.
The reason for starting our lean project for turbopumps in 2009 was the construction of a new logistics centre in Asslar. We changed the direction of our production to let the material flow directly into the new facility. A second reason for developing a lean project was the necessity to respond to increased demand for our turbopumps in the market. The project started as an evolution process, but it ended up being a revolution as we changed nearly everything in our bid to become more efficient.
Besides the difficulties of installing the new equipment and to move the machines in a short period of time, the main problem we faced was with our employees and the way they coped with the newly-changed processes. It’s all a question of education, and the months right after the introduction of the new processes were very challenging. A number of employees went through a dedicated training, but perhaps we started with it a bit too late – a month after when had installed everything. It was very difficult to change the mentality and to get all employees involved, but since then we have not fallen back. Everyone is now convinced that we are working with smooth processes and we can fulfil market demand. We grow very fast (with over 20% increases for some products).
Our main goal is to fulfil demand, and we achieve this with short lead times (for certain products as short as three days), low inventory levels and no overdue orders. It’s not easy to compare our performance today with our performance before lean was implemented, because we now produce twice as many products.
The main production plant for turbopumps is the one in Asslar, while in France we mainly manufacture backing pumps. Our facility in Korea is dedicated to the Asian market. We started with lean in Asslar in 2009, and the main outcome of the project was that production started to run smoothly and we could concentrate on other activies (like acquisitions).
We did not extend our lean project to other facilities, mainly because we needed to organise the structure of the newly-acquired businesses. Their processes were already working well: it was then a matter of enhancing communication between different plants (the French one manufactures modules it then ships to Korea, where they are assembled).
Our lean efforts didn’t come from pressure of a profit and loss sheet, but directly from demand, which is always important to understand (especially for dynamic sectors like the semi-conductors market). We were astonished at the opportunities for improvement we identified in 2009.
Dan Jones comments
Initially, lean had a hard time in Germany, where it was translated as mager (“mean”) and threatened the Trade Unions’ campaign to push autonomous working and hence increase their power. But the German automakers really woke up when Toyota introduced the Lexus and they experienced their first post war downturn in 1991. Fortunately for us this was just when The Machine that Changed the World was published, which became a big seller.
Since then they have led the way in introducing significant lean programmes, as have many other leading German manufacturers. Key to raising the profile in Germany was involving the prestigious Technical Universities in Aachen, Berlin, Munich etc. and the Frauenhofer Institutes that educate most of the business leaders in Germany.
In the run up to the Euro, wages costs became uncompetitive and lean, together with agreements to moderate wage costs, helped to maintain manufacturing jobs in Germany rather than losing them to low wage locations. But more recently, as German industry began to prosper selling luxury cars and machinery to China, Russia and India, the focus shifted to improving the productivity of their scarcest resource, skilled engineering talent.
The German approach to lean is cautious to start with but when the basic concepts are understood the disciplined follow through is impressive, even if the reality is not quite as good as the glossy, complicated Powerpoint presentations they present at conferences.