On September 20-21,2018, Lean Frontiers held their annual Lean Leadership Summits at the Westin Hotel on Jekyll Island. This was my fifth year to be invited as a speaker at the conference. This year’s summit continued the combination of Lean Management,/Lean Accounting, and Lean H.R./People Development summits that was begun last year.
Co-founder Dwayne Butcher explained last that year that “It’s about time that the whole enterprise be involved in becoming a Lean company. Lean is a business model and must therefore include every part of the business, including those in Executive Leadership, Accounting, HR, Sales, Product Development, Supply Chain. We need to breakdown the silos between these departments.”
Between the keynote speakers, there were four tracks related to Lean Management/Lean Accounting, and Lean H.R./People Development. Besides giving my own presentation, “How Reshoring and Lean are Helping Rebuild Manufacturing,” based on my new book Rebuild Manufacturing – the key to American Prosperity, I attended the keynotes and several of the sessions in the Lean Management and Lean Accounting tracks.
Lean Frontiers is not a consulting firm. Its sole focus is to provide learning opportunities to
address: Enterprise?wide adoption of Lean and the foundational skills needed to become a Lean company.
Co-founder Jim Huntzinger, said, “The first Lean Accounting Summit was held in 2005, and out of that summit, Lean Frontiers was born. Lean is still perceived as a program with short term results by too many, and we need to make the transition to Lean as a business model. We need to traverse unclear territory — trust the process to go from current condition to the target position. We can use XYZ Thinking: If we do X, then we will get Y, but if we get Z instead, then we will learn.”
Mike DeLuca of the Lean Enterprise Institute introduced a Lean Accounting A3 for attendees to provide ideas on how to achieve the aspiration of having Lean Accounting be self-sustaining within five years.
Jim announced that the Journal of Cost Management has taken an interest in the summit and has a booth in the foyer. Lean Six Sigma Master Black Belt Gary Kapanowski, who is a Guest Editor for the Journal, invited attendees to sign up to contribute articles to the magazine in the coming year as they are interested in running more stories about Lean in the magazine.
Then, he introduced the first keynote speaker, Karen Martin, author and President of the Karen Martin Group, spoke about her new book, Clarity First. Clarity was a concept that she introduced in her book, The Outstanding Organization, wherein she looked at common patterns at companies and individual performance. She covered four areas: clarity, focus, discipline, engagement in her previous book and was asked by her readers to expand on the topic of clarity. She discussed “what is clarity and what it is not,” saying that “it is coherence, precision, and elegance. Information needs to be complete accurate and easy to understand. Think of your target audience as your customer. The opposite of clarity is ambiguity, which complicates, slows, frustrates, increases risk, and is expensive. Ambiguity is manmade and different than lack of certainty. Strategic ambiguity can be useful for certain purposes. “
She asked: “What type are you? Clarity pursuer, clarity avoider, clarity blind” She stated, “Children have a natural curiosity but it gets stamped down when they ask why. Same thing can happen at work. Close to curiosity is humility about how you are communicating and how you are being received. We have 180+ cognitive biases that affect communication. Rushing hampers clarity; take time to be clear. Fear can be underlining lack of clarity. Fear can be biggest reason for resistance to Lean transformation.
She explained that clarity liberates purpose, priorities, process, performance, and problem solving:
Purpose – great way to get people engaged about what you do.
Priorities – defining true north.
Process – Value stream thinking is critical to defining process
Processes: documented, current, followed, consistently monitored, regularly improved; Standard work description is necessary for each task
Problem solving – CLEAR
C = clarity
L = learn
E = experiment
A= access
R = Rollout
In conclusion she recommended, “Infuse clarity into your organization…You need a scoreboard at all levels of company showing how you are doing.”
Prior to the afternoon keynote speaker, Jean Cunningham announced the awardees for the Lean Enterprise Institute’s Lean Accounting professor and student awards. Professor Laurie Burney of Baylor University and her student, Katie Kearny of KMPG received the award for their research on Lean Accounting that will be published this fall.
Harry Moser, founder and head of the Reshoring Initiative was the afternoon keynote speaker. He spoke on “TCO/Reshoring: Simplify your Lean Journey, Improve Employee Morale.” Harry developed the Total Cost of Ownership (TCO) calculator that quantifies he hidden costs of doing business offshore, which is free for companies to use at www.reshorenow.org. Harry highlighted the fact that the tide turned in 2016 between offshoring and reshoring as reshoring increased by 500% and offshoring fell by 75%. Reshoring and Foreign Direct Investment (foreign companies setting up plans in the U.S.) are responsible for an increase of nearly two million jobs in the U.S. He reminded the audience that Lean leaders, W. Edwards Deming, John Shook, and Jim Womack all advised companies to identify the “true cost,” and that offshoring multiples the wastes to be eliminated through Lean: overproduction, waiting transport, overprocessing, inventory, motion, and defects. He stated that among the top ten reasons for reshoring are: “quality/rework/warranty issues, freight costs, inventory, intellectual property risk, rising wages, and communication problems.”
He said, “By understanding the advantage of producing near the consumer, and the small TCO gap instead of the large price gap, U.S. companies can justify domestic investment, process improvement, automation, training, etc., and they do not have to sacrifice quality, delivery, time-to-market, or employees to be competitive and profitable.” He announced two awards for reshoring for 2019: the first Sewn Products Reshoring Award and the second Metalworking Reshoring Award.
In conclusion, he invited attendees to cooperate with the Reshoring Initiative by testing Made-in-USA impact on volume and price, incorporating TCO in your lean efforts, and documenting their reshoring cases.
The day ended with a Townhall Conversation on “The Lean Economy” in which panelists Jim Huntzinger, Tom Jackson, Harry Moser, and Bill Waddell discussed how Lean business and practice can be one of the most profound impacts for elevating a strong economy.
On Friday morning, Mike Wroblewski, author of Creating a Kaizen Culture and President of Dantotsu Consulting LLC, was the keynote speaker on the topic of “Leading a Lean Transformation.” He said, “Most companies measure performance by EBITDA, which he defined as earnings before interest, taxes, depreciation and amortization. Cutting heads is the first thing management does to improve EBITDA by reducing costs. Which path are you on? Lean can be like the path to hell. You need upper management support but you also need lower level support. There are two things you can control – your effort and your attitude.”
He was taught Lean by Shifeo Shinzo from Japan in 1985 when he worked at Hill-Ron. He shared, “We did Kaizen events all week for SMED and after repeated Kaizen events, we got our die change from one hour down to 4 1/2 minutes.” He admonished, “ Kaizen needs to be your way life. It’s the culture. Lean isn’t meant to find blame faster. What do you do in the course of the day? Check email, respond to emails, make phone calls, plan, etc. How much time should you spend in Gemba? You should be spending 80% of your time in the Gemba. The standard you walk by is the standard you set for others.”
Space doesn’t permit me to highlight all the excellent breakout presentations during the summit. If you haven’t started on your Lean journey, I recommend that you do so soon. If you are already on a Lean journey,I encourage you to put next year’s Lean Leadership Week on your calendar.
Tags: American manufacturing, Lean accounting, reshoring, Total Cost of Ownership