Jeffrey Liker, Professor of Industrial and Operations Engineering at the University of Michigan, shares his thoughts about the experience of Panalpina, featured in the latest issue of LMJ.

The Panalpina case presents both a typical and unusual approach to lean rolled together. With 200 logistics operations in 50 different countries and 15,500 staff, the company started a lean programme in 2011. The focus is “the deployment of lean processes and techniques and ways to involve people” across 21 geographical areas simultaneously. It starts with a workshop of all the regional area heads. They develop the LogEx pyramid of far too many lean tools and organisational concepts. By this point I am wondering: is this pyramid a house of cards? It sounds like so many large companies that seek to “deploy” tools and methods, and by the way change the culture in the process, and want to do it all in two years. But the story then takes an optimistic turn.

The focus of the initial workshop was to engage the 21 area heads in a process of relating the company’s five-year strategy to their efforts to launch lean in their regions. Each area head is asked to go back to their regions and develop their own vision and objectives that supports the global objectives. Through a back and forth process they come back together to develop a global vision. It is a dialogue and consensus building process.

Then they do some other surprising things. The head office realises it is a folly to dictate the details of how to deploy lean to all regions, and waste to use the pyramid as a scorecard.  Instead, it provides direction, but each area decides how they will execute it. The pyramid is used as a self-assessment tool to “jump start” the regions. The regions work on different things, but they also learn from each other improving on each other. This is real kaizen!

The role of the pyramid reflects deep thought:

“We knew the classic approach is to do a lean assessment and to score each site. However, experience told us that creating lean score cards can create perverse incentives – it is always easy to select a few key points on a check list and focus on them to boost your score rather than tackling what the business really needs. Furthermore, we didn’t want ‘lean auditors’ running around the facilities carrying out hundreds of audits and spending time ticking boxes. We saw this as waste.”

They go on and my spirits are lifted still further.

“A key learning for the LogEx team is that if you give people the freedom to develop their own tools and methods and then the support to implement them (rather than dictate them from head office), local teams are much more likely to create better, more practical tools and techniques than anyone from our head office.”

In this very early stage of this global transformation Panalpina may be taking on too much. But so far the organisation is thoughtful, learning and inspiring.