MRO Today - Ten lean steps for surviving the recession

Ten lean steps for surviving the recession

by Jim Womack

I just read in the newspapers that it's official; we're in a recession that started as early as March 2001. Has anyone in manufacturing doubted this?

In addition, the world situation continues its turbulence – despite military successes and robust, but profitless, car sales – and it could be nine months to a year before the economy turns up.

So it's time for lean thinkers to think leaner to get through the recession and secure a strong position for the upturn. The following 10 steps provide more detail on how to do that.

1. Identify all of your product families and give someone clear responsibility as the value stream manager for the performance of each product family value stream.

2. Tell the functions to help your value stream managers, rather than optimizing their own assets. No customer is interested in full utilization of your engineers or plants, only in the price, quality, performance and delivery of their specific product.

3. Map the current-state value stream for every product family and envision a future state. Do this within a few days.

4. Achieve a first future state for every product family. Do this and stabilize value stream performance within three months.

5. Introduce truly continuous flow in every value stream wherever you can. This means implementing properly designed cells with twice the productivity, half the footprint, and one-tenth the throughput time of the typical cell in operation today.

6. Introduce leveled pull between areas of continuous flow. This means untangling information on orders and production forecasts in your MRP from clear signals from the next down-stream process on what is actually needed now. Install simple shop-floor pull systems that actually control production and eliminate expediting, while leaving your MRP free for capacity planning.

7. Calculate simple financial numbers for the savings in your future; state value streams so operations, engineering and finance can intelligently discuss the benefits of a lean conversion.

8. As you get value to flow in your engineering and operational areas, turn to your support functions. Appointing value stream managers, drawing value stream maps and achieving future states in the office can produce savings equal to or greater than those in your plants.

9. Master the art of change management by learning to lead lean improvement projects that mesh with corporate strategy and the emerging value stream organizational structure.

10. Extend your new value stream perspective for all of your product families up and down the value stream to customers and suppliers. Instead of focusing on each other's margins (if any), focus on the waste created by your collective behavior and create waste-free future and ideal states for entire value streams.

None of this is easy of course. But there can be no doubt that it's possible. Just look at Toyota's continuing brilliant performance in the current recession. (They have just reported record profits for the first half of their 2002 fiscal year.) Thus Toyota continues to be our ideal lean company.

Jim Womak is the president of the Lean Enterprise Institute (LEI). LEI is a consulting company, information resource and host of multiple seminars regarding lean manufacturing. He can be reached at .