Presentation Overview:
• Introduction to study
• Enterprise using LESAT
- Successful
- Unsuccessful
• Observations of LESAT-driven actions
• Analyzing the assessment results
• 3 Categories of lean transformation management
• Linking enterprise strategies to Lean improvemen

Hallam, Cory R. A.

DSpace@MIT

Interpreting and Acting on LESAT Results   Cory R. A. Hallam March 27, 2003 LESAT Facilitator Workshop - Mar 27, 2003 - 2 web.mit.edu/lean Presentation Overview  •  Introduction to study •  Enterprise using LESAT •  Successful •  Unsuccessful •  Observations of LESAT-driven actions •  Analyzing the assessment results  •  3 Categories of lean transformation management •  Linking enterprise strategies to Lean improvement LESAT Facilitator Workshop - Mar 27, 2003 - 3 web.mit.edu/lean Introduction to Study •  Study 30 LESAT users (10 part of Beta Test) •  Post-assessment interviews/visits  •  What data to consider for improvement •  How to present the data to others (Examples in Facilitator’s Guide, pp.140-149) •  Creating LESAT-driven action plans  •  Develop an understanding of how LESAT is perceived to be a part of management’s goals of continuous improvement LESAT Facilitator Workshop - Mar 27, 2003 - 4 web.mit.edu/lean Classes of Enterprise Using LESAT •  Successful •  Business unit •  Division •  Program (although not originally intended for this) •  Site •  Generally Profit and Loss (P&L) accountable organizations •  Unsuccessful •  Support functions as enterprises (should not be used here) •  Tool not intended for this •  No clear understanding of which customer and product/service to focus on  (internal functional customer or external end customer) •  But Section I of LESAT was felt to be applicable LESAT Facilitator Workshop - Mar 27, 2003 - 5 web.mit.edu/lean Acting On Results What was Bad... •  Performed  assessment, no action  •  Fixed the assessment results to look better to upper management •  Arbitrarily mandated 1 point improvement across the board in 1 year (no strategic imperative or understanding of complexity associated with change) LESAT Facilitator Workshop - Mar 27, 2003 - 6 web.mit.edu/lean Acting On Results What was Good... •  Addressed practices with lowest maturity •  Addressed practices with largest maturity variability  •  Addressed lowest maturity in leadership section first according to the TTL  •  Cross-referenced lowest maturity practices to business strategy •  Integrated improvement actions into Annual Operating Plans (AOP’s)  •  Performed annual LESAT, aimed for continual, incremental increase in maturity LESAT Facilitator Workshop - Mar 27, 2003 - 7 web.mit.edu/lean Address Practices  with Lowest Maturity SECTION 1 - LEAN TRANSFORMATION/LEADERSHIPTTL LINK Lean Practice State Mean Variance RangeI.A Enterprise strategic planningI.A.1. Integration of lean in strategic planning processCurrent 2.3 0.5 3I.A.2. Focus on customer value Current 1.6 0.3 1I.A.3. Leveraging the extended enterprise Current 2.8 0.3 2I.B Adopt Lean Paradigm I.B.1. Learning and education in ‘lean’ for enterprise leadersCurrent 1.7 0.3 2I.B.2. Senior management commitment Current 1.9 0.2 2I.B.3. Lean enterprise vision Current 2.2 0.7 3I.B.4. A sense of urgency Current 1.6 0.4 2I.C Focus on the Value StreamI.C.1. Understanding the current value stream Current 2.3 0.5 3I.C.2. Enterprise flow Current 1.6 0.3 1I.C.3. Designing the future value stream Current 2.8 0.3 2I.C.4. Performance measures Current 1.7 0.3 2I.D Develop lean Structure and BehaviorI.D.1. Enterprise organisational orientation Current 1.9 0.2 2I.D.2. Relationships based on mutual trust Current 2.2 0.7 3I.D.3. Open and timely communications Current 1.6 0.4 2I.D.4. Employee empowerment Current 2.3 0.5 3I.D.5. Incentive alignment Current 1.6 0.3 1I.D.6. Innovation encouragement Current 2.8 0.3 2I.D.7. Lean change agents Current 1.7 0.3 2LESAT Facilitator Workshop - Mar 27, 2003 - 8 web.mit.edu/lean Address Practices  with Lowest Maturity LESAT Practices 0.001.002.003.004.005.00LESAT PracticeLESAT ValueGapCurrent StateLESAT Facilitator Workshop - Mar 27, 2003 - 9 web.mit.edu/lean Address Practices  with Largest Variability •  Low variability in assessments is an indication of common understanding and enterprise integration SECTION 1 - LEAN TRANSFORMATION/LEADERSHIPTALLYSTTL LINK Lean Practice State Mean Variance Range Level 1 Level 2 Level 3 Level 4 Level 5I.A Enterprise strategic planningI.A.1. Integration of lean in strategic planning processCurrent 2.3 0.5 3 2 11 6 1 0I.A.2. Focus on customer value Current 1.6 0.3 1 8 12 0 0 0I.A.3. Leveraging the extended enterprise Current 2.8 0.3 2 0 6 13 1 0I.B Adopt Lean Paradigm I.B.1. Learning and education in ‘lean’ for enterprise leadersCurrent 1.7 0.3 2 8 11 1 0 0I.B.2. Senior management commitment Current 1.9 0.2 2 4 15 1 0 0I.B.3. Lean enterprise vision Current 2.2 0.7 3 4 10 5 1 0I.B.4. A sense of urgency Current 1.6 0.4 2 10 9 1 0 0I.C Focus on the Value StreamI.C.1. Understanding the current value stream Current 2.3 0.5 3 2 11 6 1 0I.C.2. Enterprise flow Current 1.6 0.3 1 8 12 0 0 0I.C.3. Designing the future value stream Current 2.8 0.3 2 0 6 13 1 0I.C.4. Performance measures Current 1.7 0.3 2 8 11 1 0 0I.D Develop lean Structure and BehaviorI.D.1. Enterprise organisational orientation Current 1.9 0.2 2 4 15 1 0 0I.D.2. Relationships based on mutual trust Current 2.2 0.7 3 4 10 5 1 0I.D.3. Open and timely communications Current 1.6 0.4 2 10 9 1 0 0I.D.4. Employee empowerment Current 2.3 0.5 3 2 11 6 1 0I.D.5. Incentive alignment Current 1.6 0.3 1 8 12 0 0 0I.D.6. Innovation encouragement Current 2.8 0.3 2 0 6 13 1 0I.D.7. Lean change agents Current 1.7 0.3 2 8 11 1 0 0LESAT Facilitator Workshop - Mar 27, 2003 - 10 web.mit.edu/lean Address Practices with  Largest Variability LESAT Variance Analysisof all 52 Practices 0.000.100.200.300.400.500.600.700.80LESAT PracticeLESAT ValueSeries1Lean PracticeCurrent State Gap VarianceI.B.3 2.15 2.40 0.66I.D.2 2.15 2.40 0.66II.B.2 2.15 2.40 0.66I.A.1 2.30 2.25 0.54I.C.1 2.30 2.25 0.54I.D.4 2.30 2.25 0.54II.C.2 2.30 2.25 0.54II.D.3 2.30 2.25 0.54II.A.4 1.55 2.90 0.47I.F.1 2.85 1.70 0.45LESAT Facilitator Workshop - Mar 27, 2003 - 11 web.mit.edu/lean Address Lowest  Maturity in Leadership LESAT Gap Analysisof all 52 Practices 012345LESAT PracticeLESAT ValueGapCurrent StateLESAT Facilitator Workshop - Mar 27, 2003 - 12 web.mit.edu/lean Address Lowest  Maturity in Leadership •  III.B.1 - Process Standardization •  III.B.2 - Common Tools an Systems •  III.A.1 - Financial System Supports Lean Transformation •  III.A.3 - Promulgate the Learning Organization •  III.B.3 - Variation Reduction •  I.B.4 - A Sense of Urgency •  I.D.3 - Open and Timely Communications •  II.A.4 - Allocate Resources for Program Development Efforts •  II.C.1 - Incorporate Customer Value Into Design of Products and Processes •  I.A.2 - Focus on Customer Value •  I.C.2 - Enterprise Flow •  I.D.5 - Incentive Alignment Lean PracticeCurrent State GapIII.B.1 1.2 3.45III.B.2 1.35 3.45III.A.1 1.4 3.4III.A.3 1.4 3.1III.B.3 1.5 3.35I.B.4 1.55 2.8I.D.3 1.55 2.8II.A.4 1.55 2.9II.C.1 1.55 2.8I.A.2 1.6 3.05I.C.2 1.6 3.05I.D.5 1.6 3.05II.A.2 1.6 3.05II.C.3 1.6 3.05II.E.1 1.6 3.05III.A.5 1.6 2.55LESAT Facilitator Workshop - Mar 27, 2003 - 13 web.mit.edu/lean Enterprise Transition to Lean (TTL) Roadmap Entry/Re-entryCycleFocus on the ValueStreamInitialLeanVisionShort Term CycleCreate & RefineTransformation PlanLeanTransformationFrameworkAdopt LeanParadigmEnterpriseStrategicPlanningFocus on ContinuousImprovementOutcomes on Enterprise MetricsImplement Lean InitiativesEnterprise LevelTransformationPlanDevelop Lean Structure &BehaviorDetailed LeanVisionEnvironmental Corrective Action IndicatorsDetailedCorrective ActionIndicatorsDecision to Pursue Enterprise Transformation•Build Vision•Convey Urgency•Foster Lean Learning•Make the Commitment•Obtain Senior Mgmt. Buy-in•Map Value Stream•Internalize Vision•Set Goals & Metrics•Identify & Involve Key Stakeholders•Organize for Lean Implementation•Identify & Empower Change Agents•Align Incentives•Adapt Structure & Systems•Identify & Prioritize Activities•Commit Resources•Provide Education & Training•Monitor Lean Progress•Nurture the Process•Refine the Plan•Capture & Adopt New Knowledge•Develop Detailed Plans•Implement Lean Activities++Long Term Cycle I.AI.I.BI.I.CI. I.DI.I.EI.I.FI.I.GI.•  Aim to improve the LESAT Section I variables as a means to improve the section II and III variables •  The TTL is a good guide for the order of improvement activities LESAT Facilitator Workshop - Mar 27, 2003 - 14 web.mit.edu/lean Observed Categories of Lean Transformation Management •  Category 1 - Open Loop Assessment  •  Category 2 - Independent Closed-Loop Control •  Category 3 - Integrated Closed-Loop Control LESAT Facilitator Workshop - Mar 27, 2003 - 15 web.mit.edu/lean Category 1 - Open Loop Assessment •  Using LESAT •  Will improve the lean enterprise vocabulary of the participants •  Will have little or no direct effect on transformation EnterpriseImprovementPlanLeadershipDesiresOutputLESATResourcesLESAT Facilitator Workshop - Mar 27, 2003 - 16 web.mit.edu/lean Category 2 - Independent Closed-Loop Control •  Using LESAT •  Will have impact on transformation and improvement activities, with uncertain outcomes •  Can result in competition of objectives (and for resources) EnterpriseOtherImprovementPlanLeadershipDesires (a)OutputLESATResourcesLESATImprovementPlanLeadershipDesires (b)LESAT Facilitator Workshop - Mar 27, 2003 - 17 web.mit.edu/lean Category 3 - Integrated Closed-Loop Control •  Using LESAT •  Will result in impact on enterprise transformation with much less uncertainty than first two models   •  Manages competing desires and resources to move the enterprise in an agreed-upon strategic direction EnterpriseImprovementPlanLeadershipDesiresOutputLESATResources∑LESAT Facilitator Workshop - Mar 27, 2003 - 18 web.mit.edu/lean Becoming a Category 3 Enterprise  •  Successful category 3 continuous lean improvement requires integrating current assessment results with enterprise strategic needs  •  This should be done in light of and in conjunction with other improvement efforts •  This requires a team approach with strong leadership support and commitment that creates the environment for cross-functional and cross-process continuous improvement LESAT Facilitator Workshop - Mar 27, 2003 - 19 web.mit.edu/lean Linking LESAT to Strategic Objectives - Completing the Management Control Loop Rank Order Increasing LESAT Practice Maturity Rank Order Increasing Importance in Strategic Objectives LESAT  Practices Assessed Maturity Strategic Objectives A      B      C       D 1.6 1.7 1.85 1.9 1.9 2.1 2.2 . . . X                  X       X X       X                                                X X       X                  X X                                                  X         Improvement activities should target cross of lowest maturity practices and highest strategic importance LESAT Facilitator Workshop - Mar 27, 2003 - 20 web.mit.edu/lean The LAI Toolset as Part of  an Integrated Enterprise Continuous Improvement Cycle Continuous Improvement/Assessment CycleCreate FutureState VisionPrepare theOrganization forChangeCreate/RefineEnterpriseImprovement PlanExecute NextCycle of PlanUtilize Best PracticesAssess CurrentMaturity LevelSpecify DesiredLevelIdentifyGaps/PrioritizeActionsLESAT TTL Road Map LEMStrategic PlanningChangingCustomerValues/NeedsExternal ForcesExternal Inputs,BenchmarkingFigure 11Assess CurrentStateFacilitator’s Guide, pp. 27 LESAT Facilitator Workshop - Mar 27, 2003 - 21 web.mit.edu/lean Major Observations on LESAT use to Date •  Transformation is a continuous process that takes years •  LESAT acts as a “sensor” for closed-loop lean enterprise management control •  LESAT users fall into 3 categories of enterprise management •  1 - Open Loop •  2 - Independent Closed-Loop •  3 - Integrated Closed-Loop •  Significant investment of time deemed worthwhile •  Increases understanding of the lean enterprise •  Sustainable transformation successes will likely be closely linked to Category 3 enterprises LESAT Facilitator Workshop - Mar 27, 2003 - 22 web.mit.edu/lean Workshop Attendees Should  be Able To... •  Extract results of importance from the LESAT Maturity Calculator  •  Lowest maturity •  Highest variability •  Largest Gap •  Identify the key enterprise practices that need attention in future improvement efforts •  Think about how to integrate strategic needs of enterprise with assessment potential of the LESAT  

Interpreting and Acting on LESAT Results

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Interpreting and Acting on LESAT Results

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