Tuesday, February 18, 2014

Aligning Lean Principles and Organizational Culture

We have all heard stories of industry giants such as Toyota and Dell successfully cut costs and waste in their manufacturing processes through lean implementation. However, these are exceptional cases. Toyota or Dell did not just poured in a lot of money into lean initiatives, they shaped their organizational culture and business processes so that the company can fully embrace lean production models. Many companies have been able to set up isolated lean projects, and it has resulted in huge cost savings, but they are never able to successfully replicate these results to similar processes in other parts of the company, or in companies in other regions. The article, “Decoding the DNA of the Toyota Production System”, mentions of Honda and Nissan’s attempts to replicate the Toyota Production System, and how they fall short of Toyota’s standards.

Toyota has an organizational culture where all workers share the same vision and values, and which encourages continuous learning, innovation and improvement. This culture allows their operations to be flexible and adaptable. Line workers at Toyota are delegated a significant amount of authority to make changes in business processes as needed. One of their major structural advantages is that people can implement design changes in one part without unduly affecting other parts. Managers, in this scenario, feel much more comfortable delegating responsibility without the fear of creating chaos or uncertainty. In what they call a “community of scientists”, people continue to experiment with creating the best possible solution to any problem.

Starbucks also endeavored to make and serve coffee the lean way.  Using lean techniques, Starbucks reduced the time to make coffee from more than a minute to 16 seconds – this was mostly achieved through reorganizing items in the shop, and altering the order of assembly of the coffee. Starbucks uses lean techniques to reduce time to deliver products to the customer, decrease costs and reduce waste. The lean model works well with the organizational culture at Starbucks. Employees share the vision that customer service is one of the most important aspects of the business. They want to improve processes so that customers do not have to wait a long time. The less customers have to wait, the higher is their buying experience at Starbucks.

However, does it mean that the Lean model will work for everyone? The answer is no. This is because the principles of lean model must be applied to many different aspects of the business, not just the production processes. There must be an organizational culture that emphasizes the responsibility for improvement on all employees. There should be an effective leadership willing to delegate, and a motivated workforce keen on exploiting any opportunity for improvement, no matter how big or small.

A company, considering the adoption of Lean model must examine whether there is an organizational culture that would really optimize the way they work. A lean model can help a manufacturing company reduce its lead-time from 10 weeks to 2 weeks, but what about a fast food franchise wanting to reduce the time the customers have to wait in line. The workers at the fast food franchise might resist the idea of working faster or moving things around just to keep the customers happy. This is where the organizational culture and good leadership comes in. You must shape your culture so that your employees are happy to work more efficiently. The lean model will work best where the employees are willing to make these kind of changes themselves.


Latest Starbucks Buzzword: “Lean” Japanese Techniques (WSJ, August 4, 2009);http://online.wsj.com/news/articles/SB124933474023402611

Decoding the DNA of the Toyota Production System (Spear and Bowen, Harvard Business Review, January 2006)

Living in Dell Time (Breen, Fast Company Magazine, December 2007); www.fastcompany.com/51967/living-dell-time

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