If you think lean is difficult to adapt to nonmanufacturing businesses, think again. This month, LMJ travels to the Netherlands to study the application and status of lean thinking in the country, and finds a wide adoption of continuous improvement in businesses from several different sectors, including healthcare, financial services and… elementary schools!


UNSTOPPABLE

René Aernoudts is the founder and director of the Lean Management Instituut and executive committee member of the Lean Global Network with Dan Jones, John Shook and José Ferro. In this article he introduces LMJ’s special on lean in the Netherlands.

Lean in the Netherlands has rapidly been popularised in the last decade. It started off in traditional industries, but has now spread in very different areas, from banking and insurance companies to hospitals and government agencies. Not only mass manufacturers, large service providers and administration agencies, but also the engineered to order (like turbo generators) and luxury goods industries (like luxury yachts) have been introduced to lean. More and more companies have started a lean journey, not only door-to-door but also in full supply chains, with multiple organisations working on full value streams (like in construction).

Good initiatives are running in hospitals like the Erasmus Medical Centre and government agencies like the Land Registration Office (Kadaster) and Rijkswaterstaat (Infrastructure). Now lean has shown it’s applicable to primary education as well, with great benefits to be reaped by children, teachers and school managers. At the Lean Management Instituut we support lean practitioners but also CEOs and leaders in designing and running their own lean journeys, learning from peers in other organisations. Many consultancy agencies offer lean services, and more and more universities and business schools now offer their students educational programmes on lean. Considering all this, the future of lean in the Netherlands looks promising.

At the recently organised yearly Lean Management Summit (this year at its 8th edition) we received lots of positive feedback, and we’ve heard many inspiring stories and case studies. With guest keynotes Dan Jones, Michael Ballé and Sammy Obara, and many practical examples of applications, the event showed that lean has been embraced by many organisations.

When we look at the level of lean there is still a long way to go though. Like many other countries have learned, many start off choosing a tool approach, which often does not translate into sustainable results. At the same time, there are positive, strong examples.

More and more share their knowledge, networks have been evolving and even ministers are aware of the power of lean and are not only supporting it, but demanding that their agencies use it to provide their customers with a better service and experience. An interesting example was a visit of 140 hospital employees and managers to one of the factories of AkzoNobel, a paint manufacturer, where they saw that you can learn a lot from another industry, even though they didn’t think this was possible when the day visit started.

Lean is here to stay, although our mission at the Instituut is not over yet. In fact it just started: there are lots of opportunities out there.

 


GENCHI GEMBUTSU, WITH CHILDREN

Klasse.pro promotes the adoption of continuous improvement in elementary schools, with the goal to enhance the quality of education. Dewi Lou and Marijke Broer-Bos explain why lean is not just for higher education.

Schools constantly have to deal with the quality of the education they provide, but this isn’t the only reason why promoting a culture of continuous improvement in elementary schools is so valuable. The world is changing rapidly, and today’s children will be likely to have 10 to 15 jobs in their lives: a new set of skills and principles must be developed, one that includes critical thinking, cooperation, social responsibility, problem solving and creativity. It’s life-long learning, of which education is the main enabler.

We see an opportunity to help Holland remain an important and competitive country, while making a long term investment into Dutch society. It is somehow surreal to see the great results that can be achieved with children in elementary schools: they are very enthusiastic, and they love to celebrate results and sort issues.

Under the programme, which involves about 100 schools at the moment, students are taught kaizen and PDCA, and they are encouraged to set targets for the classroom and actively work to achieve results (in reading, maths and languages, but also in the way they work together). Individual results are linked to class results, which in turn can be linked to school districts results – which offers school managers an opportunity to benchmark themselves against best practice and learn.

Children are empowered: among other things, they lead parents-teachers meetings. It’s a bottom up approach that uses children’s enthusiasm and drive to help leadership establish a mission and a vision from the top down, and translate them into day-to-day actions. No-one escapes CI: the systematic alignment of all levels is key.

Visual boards are used to set targets, and weekly assessments look at progress. There are individual and collective goals, but also social standards and ground rules on behaviour that must be respected: children want to know the scores, and some of them don’t perform well, but because targets are also linked to behavioural rules nobody is picked on and individual errors are corrected by the group as a whole.

Students know who does well and who doesn’t, and they talk about it. Everything is clear, and this makes for a nice learning environment. Now, if they don’t see the boards in the next class they go to, they ask for them. We recently spoke with a little girl whose results weren’t as good as those of the rest of the class. She told us: “If my results improve a bit, the results of the class will improve too.”

The real challenge is developing the skills of teachers and school leaders, to have them teach less and learn more. To many of them, it is a shock, as all they have been doing througout their careers is teaching – letting them visiting businesses and creating a professional learning community among different classes and schools, for example, could help making the case for a more heartfelt adoption of continuous improvement principles, whose ultimate goal is a better society.


THE ONE TO WATCH

Philip Uythoven, manager of process development, supply chain, at Philip Morris Holland BV, talks about how the company managed to move from the mere use of lean tools to creating a culture of continuous improvement.

With an output of 80 billion cigarettes produced in a year, Philip Morris Holland is faced with unique challenges. Customers often demand new packaging and filters, for example, and the company soon realised it needed to be faster at changing its product portfolio. The affiliate needed to change from big to better and from large to lean. This is supported by the strategy to become the fastest improving factory within Philip Morris International.

Philip Morris Holland’s lean journey started in 2009, when the global company launched the OPEN programme, Operations Performance and Engagement model, based upon two pillars: Processes and People & Organisation. In the Processes pillar basic lean tools were introduced, including 5S, 7 wastes recognition and standardised work. Each affiliate adopted the OPEN programme with its own approach to change – to account for differences in local culture.

In Bergen op Zoom a group of managers and engineers was trained using the train the trainer concept, and soon all 1,400 employees across the business, from manufacturing to HR, had received the same basic lean education.

In 2010, the central PMI operations centre in cooperation with the affiliates selected “13 common main challenges” (split into Processes and People) to help identify improvement opportunities in every area of the business. Diagnostic Week was used to look for these “symptoms” and analyse processes, through value stream mapping and A3s. PMH volunteered to have the pilot of the Diagnostic Week approach and this became the tipping point. PMH identified four focus areas and started looking at the whole value stream.

It soon became clear a new leadership model was needed before a continuous improvement model could be created: managers and supervisors went through a one week training programme, before entering the employee engagement programme where every team spends a day to discover the new continuous improvement mindset. This year, building on the ability of workforce and leadership to work together, PMH will embark on their first experiments with flow and kanbans/supermarkets. While the main focus is now on manufacturing, anybody from any business area can still “pull” expertise to implement lean projects.

The mindset changed dramatically, with focused improvement and set priorities now on Philip Morris Holland’s agenda. Employees were used to big projects, now they are after small improvements instead. With people more empowered and engaged in kaizen, managers can concentrate on facilitating, going to the gemba, checking on standards and coaching the people.

Where people and culture come together with lean manufacturing processes, results will follow in becoming the fastest improving factory, delivering top-quality products according to customer demand.


INSURING CHANGE

Sybrand Hoekstra, master black belt lean and six sigma, is responsible for lean development and training at insurance company REAAL. Here he talks about how six sigma couldn’t change the firm’s way of working, and how lean made the difference.

Six sigma didn’t work for us. We did it for two years, starting in 2007, but it didn’t deliver. Management thought of it as a nice “solution” to our problems, but did not believe in it.

I already was a Master Black Belt when I read The Toyota Way. I immediately thought that this was what we were looking for, although there wasn’t much information on lean in our sector, as opposed to so much on six sigma. Our group became a lean team. We successfully led small projects concentrating on what it meant for people and management to change the system, which at that time was heavily based on a command and control approach.

This time, management really bought into the initiative and adopted the lean philosophy (the new head of the company had seen lean in action in Japan). Now we have 21 internal consultants within the lean team.

The approach we took looks at the entire value stream, from data entry to acceptance. We coach managers and employees, and we have KPIs to assess the effectiveness of meetings, all to ensure that we are achieving our goals and those of our clients. Our plans start from the client and go backwards through the value chain, using PDCA.

This is transforming our management model, from top down to bottom up. Our leaders are beginning to believe in people and spreadsheets at the same time. We have flipped the pyramid, putting people on top, and support is now building up quickly. Once you get 20% of the people on board, it becomes unstoppable. With six new people joining the team this year, it is now clear than we don’t need to push anymore. People are coming to us now and we train and advise them. They are coming from all over REAAL, we are becoming one company.

We are teaching people to become lean believers, and to work on our projects with commitment. Within three projects, they become fully independent: we from the team are in the lead for the first one, we supervise them as they do the second one, and they are able to deliver the third one on their own. Lean has to be of the people, it doesn’t have to stay with us. When more people are needed in the projects next year, the organisation will be able to deliver without hiring extra workers.

Transforming people who have worked and thought in a certain way for a long time is incredibly difficult, but we are doing it throughout the company. We started with a pilot project, and then extended the principles to the entire business. Our motto is: LEAN=DO!


COSTS DOWN, QUALITY UP

The Greenery is an international fruit and vegetable supplier. All year round, it provides a full, day-fresh range of fruit, vegetables, mushrooms and potatoes to its clients: supermarket chains, wholesalers, caterers and the processing industry. Donny van Dam, plant manager at organic division Naturelle, shares with LMJ the company’s lean journey.

Naturelle works with a cooperative of 30 Dutch organic producers. We supply around 80 customers, mainly based in the Netherlands, but also in Germany, Belgium, France, England and Eastern Europe. Supermarkets want a complete range of products all year round, therefore we have to import from other areas. Our primary goal, however, is to sustain producers in the Netherlands. Transportation within our supply chain is conducted mostly by our own road transportation company. On a busy day there are over 200 lorries of The Greenery on the streets.

Until recently, our performance at Naturelle was challenged to improve: we had logistics and quality issues, and we were receiving complaints from our customers. A survey among employees showed also points of improvement concerning the management. One of the main problems was lack of information and communication. Customer requirements weren’t always met. They were not communicated. The whole process was very complex, and we simply had to change the way we did things at Naturelle. A newly formed management team determined lean would be the way to do it.

We started to monitor our processes: we analysed customer demand, and established the lead times and quality specifications we needed to respect. This way we were provided with the necessary information at any given time, and therefore we could start to plan more accurately. At the same time, I concentrated on people on the shop floor, who didn’t participate at first. They were never invited to do so. I asked them what was preventing them from performing their job in the most efficient way. I managed to convince some employees that the new system was better for everybody, and it spread. To sustain the kaizens we introduced daily performance board meetings. Lean encourages you to think, not just to cut costs.

In two years we have dramatically changed the way we work, by reducing overtime and lead times; due to the creation of flow we process ginger 35% more quickly than before, for example. Besides, we introduced a pull system and kanbans are used between internal processes. The layout of our facility also changed. We used to have one storage room, with cold air coming in from one side and warm air from the other, which isn’t ideal to store soft goods. We divided it into four refrigerators with different temperatures, to best keep fruit and vegetables and ensure quality while adding more than 25% extra pallet storage spaces. Because of this additional capacity and the reduction of packed inventory by 70% we didn’t need to rent additional warehouse space anymore. These changes led to substantial cost savings and improved quality.

Our producers are the first link in the chain, thus communication with them is critical. Our head of quality actively engages with them, helping them when they need support and making sure customer requirements are as clear to them as they are to us. We acknowledge the importance of seeing the whole value stream: for example, we ask our producers to use the boxes the customer requires, so we won’t have to repack.

Introducing lean already paid off substantially: we reduced our operational costs over 2011 by € 1m, an overall improvement of more than 19%.

 


INCREMENTAL IMPROVEMENTS

Freek Dekker, manager of the radiotherapy department at Erasmus MC, the largest university medical centre in the Netherlands, talks about how lean is used to enhance patient care, and how it was a visit to a paint manufacturer to finally get management on board.

Three years ago, in the radiation oncology department, only eight linear accelerators out of ten were working, while the entry waiting list increased. We needed to find a way to staff them with less people. We had heard about lean, but simply forcing a golden standard upon our employees wasn’t going to work.

We needed a different method. After I took the lean practitioner course at the Lean Management Instituut, we realised, through training and kaizen activities, that only 50% of our time was used to actually add value. There were people sitting around and waiting to perform their job, and a sense of urgency to change quickly started to spread in the department.

The real challenge for us was to keep focus on our interaction with patients. We simulated our radiation process with less operators by removing the waste of waiting time. But we soon found out that if we just did so, we were then pushing patients through the process and giving them and ourselves a negative experience. So we had to find other ways to cut the waste but not get that in the way of compassionate care.

We are introducing a lot of small incremental improvements. We finally managed to reduce the number of operators needed for each machine, and all ten accelerators are now working.

We are constantly building on small improvements, teaching people how to creatively approach a problem. A recent example is a small poka-yoke devised after an incident involving a gantry crashing into a fixture and causing a treatment couch to break. A meeting of the lean team resulted in an inexpensive,quick solution – a small catch – that has since been applied to all the accelerators.

We started from the bottom up, but we eventually ensured full support from management when 150 people from the department visited the manufacturing site of paints and coatings specialist AkzoNobel. We saw 5S, kanban and how the company managed to increase output without extra people or big investment – which is what we were striving for. The visit really opened the eyes of our managers, and helped them to make the leap of faith and believe that we could actually improve patient experience through reducing lead time.

We developed a management A3 during a full day with the management team, and we held our first Improvement Week in October: we measured our lead time for patients with prostate cancer (from the diagnosis to the first day of treatment). It was 35 days and we decided to work to take it down to 10 days.

The kaizen week is the means through which we deliver our project with our team, which now includes five doctors (it used to be only technicians). Our result for prostate cancer stopped at 15 days, because in the meantime a new technology was introduced: gold markers placed around the prostate, which can help track and treat the tumor more precisely but that requires another week to make the CT scan.

So we have come to the point we are doing both: small incremental kaizen and cutting lead time through weeklong events.