Challenges in Implementing LEAN thinking

The companies operate in highly competitive markets, where the winner takes it all. Cheaper, Better, Faster and Agile production is the competitive attribute not only for market share and profit but also for organizational survival. 

Originating from the shop floors in Japanese manufacturers the LEAN thinking is finding its way into today’s modern production and service environments. While the LEAN concept is simple, focusing on cost reduction by eliminating waste, many modern companies have challenges in implementing lean thinking. I will list only a few below. 

?  Top Management does not understand the basic lean principles. Sometimes, there is more waste created in convincing managers and making powerpoint slides, than implementing lean. 

?  The lean thinking is solely viewed as cost reduction methodology and is driven by finance managers for P/L benefits and quick fixes without understanding the customer value, which is a prerequisite for lean thinking.

?  Limited communication and leadership during the implementation phase. The Top Management initiated a lean program but not supporting it, neither with communication or direction, while expecting financial benefits and short-term P/L impact.  

?  Disagreement on value definition. The nature of service intangibility in combination with complicated internal/ external customer setup makes it difficult to define value, especially in a service environment. The value is always specified by the customer served, and sometimes we are missing uniform way to capture value.

?  Missing the strategic aspect of lean. The Top Management perceive lean as a job for the specialist in Business Improvement or Business Excellence department. This missing strategic element results in fragmented improvements, negatively impacting the other value streams in the organisation. The lack of strategic aspect in lean implementation can create isolated short-term benefits disconnected from the employees and the entire supply chain. 

?  Management philosophy and culture. The lean philosophy originated by Japanese traits for work concept and resource utilisation which can be entirely different from today’s management and organisational concepts.  

?  Employee Involvement. The lean concept is based on employees and their contribution to the lean implementation. The most significant lean thinking challenges are namely related to the lack of understanding the cultural aspect of lean, which in many cases is not compatible with the modern management philosophy. The Lean thinking has evolved from the shop floor in Toyota and will continue to develop, but the ethos that employee involvement is the ground pillar of lean thinking will remain.