Warning: What You Call Kaizen May Really Be Rework

Your organization's products and services embody all your value-adding activities, plus they form critical connections to many other functions. As a result, they are the perfect platform for organizational change. In fact, Jim Morgan, an executive experienced with product-led transformations, asserts that if you really want to create lean enterprise change, you must shift your focus upstream from production to product development.

Morgan is COO of electric vehicle startup Rivian and the former global engineering director at Ford Motor Company during the product-lead turn-around under CEO Allen Mulally. He also is senior advisor to the Lean Enterprise Institute’s initiative in lean product and process development (LPPD). Chet Marchwinski, LEI communications director, caught up with him at the annual Designing the Future Summit.

Q: You see a lot of companies, why do so many struggle with implementing lean in operations?

Jim: What I see most often is that companies fail to enroll people in the process; they don't make them part of the process. They establish separate initiatives and use isolated people to roll out lean, as opposed to actually using the work to enroll people into the change. They also see LPPD (lean product and process and development) as just an initiative, rather than as a way to do the work -- as an enabler, to enhance performance.

Q: How has lean product and process development changed in the past decade? You and Jeff Liker, about 10 years ago, wrote your first book, The Toyota Development System. So, we have been watching the LPPD effort for 10 years.

Jim: Initially, I, Taka Fujimoto, Durward Sobek, Jeff Liker, and Allen Ward, did a significant amount of research into it. Since then, it's been taken on by companies around the world.

I think at last year's (Designing the Future) conference, we had, 10 or 12 countries represented. We have people practicing these methods in industries like aerospace, oil and gas exploration, consumer electronics -- just a really broad group of organizations.

Michigan Medicine is applying LPPD principles to develop better clinical processes. Last year, we heard from Kendra Leith at MIT’s D-Lab on how they are utilizing these practices to improve lives in under-served markets around the world. It's really gratifying to see where it's gone.

Q: In your latest book with Jeff Liker, Designing the Future, you note that companies tend to take a narrow view on improving current conditions and operations, targeting labor, cost reductions and manufacturing. What's wrong with that?

Jim: You have to first understand, what is the value you're creating for your customer. If you don't have that understanding, you could be implementing a cost reduction, while simultaneously sacrificing significant value from the perspective of your customer.

The other thing is that oftentimes if you begin your lean work on the shop floor, even though you call it kaizen, it's really rework. It's reworking things that should have been much, much better coming out of the development system. And so by moving upstream and focusing your efforts earlier in the process, you can have a much bigger impact.

Q: Lean production concepts spread to healthcare and other industries. Are you seeing LPPD diffuse to other industries?

Jim: Absolutely. I mentioned healthcare and D-Lab. This year I've begun to work with Sebastian Fixson, who is an associate dean of innovation at Babson College, to see if we can apply these principles to develop new products and services in the academic world where the needs of the customers have changed dramatically.

Q: I read an article about block chain coming to manufacturing and, of course, we've seen articles about digitization. So, why should managers and executives learn about lean product and process development when all these other trends seem to be disrupting business?

Jim: I think they are very powerful tools, and we can do some really great things with them. But there can also be a downside to these technologies, especially if they keep you from going to the gemba (Japanese for the “actual place” where value is added such as a factory floor). If they trap you in your office, looking at streams of data instead of enabling you to go to the gemba to see what's really going on.

To Do:
-- Register 4 team members now for the Designing the Future Summit, June 18-19, 2020, and the 5th member attends FREE! Sign up here to catch keynotes by Jim Morgan and other lean product development practitioners in 2020, and to watch highlights from the 2019 conference: https://www.lean.org/designfuture2020

-- Sign up for the Lean Product and Process Development eletter and access to thought-leading content at the LPPD website. Click the link, then scroll down to the orange “stay updated” banner. Subscriber information is never shared, sold, or swapped.:https://www.lean.org/leanpd/

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