Why do so many companies which try to implement lean manufacturing fail?

During both prosperous and difficult times, successful businesses naturally look for new ways to improve performance. However, in recent years, as the world economy suffered through one of the worst recessions in history, many companies turned in droves to Lean and other variations of continuous improvement programs to rescue their sagging businesses. But, did they really learn during this process?

Despite the enormous popularity of Lean, the track record for successful implementation of the methodology is spotty at best. Some recent studies say that failure rates for Lean programs range between 50 percent and 95 percent. To analyze this level of performance from a Lean, problem-solving perspective, continuous improvement experts should be asking: Why do so many companies fail to achieve Lean success?

While the causes are numerous and extensive, I will focus on one of the most significant reasons: failure to understand the theories and concepts of Lean and their relationship to the entire business.

What Is In a Name?

First of all, there is the name itself. The commonly used term Lean manufacturing perhaps could be the worst-coined phrase for this type of continuous improvement methodology. It automatically emphasizes two things that conjure limited expectations of the functionality of this business methodology: Lean and manufacturing.

The dictionary definition of the word lean (lacking in richness, fullness, quantity; poor) brings up unfortunate connotations. When mentioned in business circles, Lean is often associated with trimming down, reducing or (most notably during the Great Recession) lack of sales or work. Thus, when the word Lean is spoken, most people immediately think of doing more work with fewer people. Because no one prefers unemployment to a stable job, figurative walls are automatically erected to defend against the inevitable layoff.

Companies considering Lean also need to understand that manufacturing is a woefully inaccurate term to describe the full uses of Lean concepts. Lean is a business methodology, not simply a manufacturing tool. It requires complete and total commitment from the highest executive levels and must cascade down to all departments and throughout all levels of business.

Lean does involve manufacturing, of course, but it also directly affects sales, customer service, human resources, research and design, finance, administration, purchasing, scheduling and building maintenance. Failure to understand how improvements (or lack thereof) made in one area will affect another can result in transformation failure. If your manufacturing team improves processing time from five days to one day, but your “pre-production” team still requires 25 days to get the order to manufacturing, you haven’t gained much on the competition.

‘Flavor of the Month’ Resistance

Given that so many companies have misused the Lean approach, resistance is to be expected. This push-back also creates barriers to the change that needs to take place for an effective Lean transformation. Meanwhile, the understandably skeptical staff considers the methodology to be just another flavor-of-the- month that will eventually be abandoned.

But how does a Lean transformation become another flavor of the month? Businesses in all sectors are jumping on Lean. Some truly do the research and understand what they are getting into – usually realizing it is far more than they had foreseen. However, far too many believe that simply applying the tools (5S, Kaizen, value stream mapping and so on) will get them on the road to quick success. They do not take the time to learn of the theories and concepts needed to sustain the transformation. They do not review those theories and concepts thoroughly and align the business to the methodology.

Here lies an additional level of cause. As flavor-of-the-month management is so readily displayed in business today, the faith required for a Lean transformation often does not exist. Too many businesses initiate change, only to fall away when they cannot overcome this barrier.

Arguably, there are several solutions to this lack of faith in Lean. For instance, businesses committing to Lean transformation should not use the time benefits gained from Lean as an excuse to pile more work onto their employees. Simply adding more work to the pile only lowers productivity, morale, and both the physical and mental health of the staff. Taking the time to work with the employee, learning to identify necessary tasks, removing unnecessary work and discovering more available time to do more valuable work (without increasing the overall workload) will result in better understanding between employee and manager, more trust, communication, and overall employee performance.

Nor can a business use Lean as a tool for headcount reduction. Certainly, layoffs made headlines across the globe during the Great Recession, including some companies touting Lean. Many companies used the downturn in business as the excuse for layoffs, claiming they were not Lean-related, but that is like claiming it is not your fault the house burned down while holding the empty gas can and the matches.

Total Commitment

The single most significant key to a Lean implementation is that all parts of the business must make the transformation through total commitment to Lean theories, concepts and tools. For example, if your finance team is still using standard cost accounting, you will not see the financial gain of implementing Lean. If finance has no desire to change, the executive level must step in and drive change.

When Lean is implemented to reduce staff sizes or add work without eliminating waste, or is focused too heavily on manufacturing, the transformation is bound to fail. Some improvements will be made, but they will be neither sustainable nor, more importantly, continuously improved upon.

Newtonian laws state that every action has an equal and opposite reaction – it is a simple theory. The difficulty lies in understanding the reaction, preparing for the reaction and working with the reaction. Failure to understand the relationship that a Lean transformation has with the entire business will cause an unexpected, and unwanted, result.

In these kind of implementations, the only reason for failure is failing to change "The mindset of employees".

Lean Implementations Don’t Fail, the failures happen when companies have every intention of implementing lean techniques that will help their businesses, but they do not actually implement the techniques.

So, if lean manufacturing techniques will make a company better, what is keeping many from getting started? For some companies, too many things seem to get in the way. Daily events such as critical machine breakdowns, modified customer requirements, an influx of new jobs or employee absence provide just the right excuses for putting things off. Some companies even offer the traditional defensive responses, such as "That doesn’t apply to our business", "We tried something similar once and it was a disaster," or the compelling "Sounds good, but we have no time or resources to do it". Still others say they will address their lean manufacturing implementation "next year," as if things will be any easier a year from now. The fact is that any type of change requires effort, and you can always find reasons for not doing what you know needs to be done. Yet to prosper, or in some cases survive, you have to keep getting better. Lean techniques provide a means for you to start to get better now.

One of the keys to realizing the benefits associated with implementing lean manufacturing techniques is a carefully crafted lean implementation plan. This plan is essential because it is too easy to get distracted by the numerous problems and daily challenges faced by anyone working in a manufacturing operation. Without a lean implementation plan, we tend to lose focus and end up hoping things happen instead of managing the things that need to happen.

The lean implementation plan needs the input of key people in the organization. It is built with desired results in mind and should be clear enough to serve as a road map for everyone involved. Unlike so many plans that end up in bottom desk drawers and are rarely, if ever, reviewed, the lean implementation plan must be a living document. It should be distributed to all stakeholders, who should be urged to post it visibly in their work areas. The lean implementation plan should indicate what is to be done, by whom, and when. It should be updated on a regular basis, with completed action items visually highlighted. Ultimately, the lean implementation plan is a reminder to the entire organization that the clock is ticking.

Another key to effective lean imple-mentations is a strong belief that these techniques really will help your company. Those who have not witnessed first hand the transformation that occurs when companies successfully implement lean techniques may have to take a leap of faith. Yet this is not a great leap. Anyone can find success stories with documented benefits to bolster confidence that these techniques really do work. Your journey to lean manufacturing will not require you to blaze new trails. Instead, you will be walking a path that many have walked before you. There is help out there if you need it.

Lean techniques work because they make sense in any industry. They have been successfully applied in thousands of companies around the world and are being introduced in many more every day. How can anyone really argue against reducing or eliminating waste? How can anyone seriously claim that organizing a workplace will not lead to finding what you need faster? How can anyone really believe that machine downtime is just something we have to live with, rather than an opportunity for improvement? Finally, in this ever-changing world, how can we afford to believe we will survive by simply maintaining the status quo?

Thanks for invitation

I am  agreeing with my colleague’s answer  Mr. wasi

This is not Area of ​​my specialization, I hope to invite only specialists in this area

because it is very difficult not like commerce co. that dependent machine and manpower plus cars and technical with workshop and calculate net cost to put rate for sale