Like the Baldrige model, lean started in the manufacturing world but has spread to all types of organizations. Several Baldrige Award winners have implemented lean because it helps them create more value for their customers with fewer resources. Like Baldrige, lean (1) is process-oriented, focusing, in lean’s case, on the value streams that produce products and services for customers; (2) improves quality and cycle time; and, (3) provides a competitive advantage for those organizations that institutionalize it.
In “Lean Confusion” (IndustryWeek, August 18, 2010), Jill Jusko traces the growth of lean in manufacturing, noting that 90 of the 100 IndustryWeek Best Plants from 2005 to 2009 demonstrated significant or complete implementation of lean. “Those same plants reported median 30% reductions in manufacturing cycle times over the past three years, median scrap reductions of 33%, and median productivity improvements of 24%,” according to Jusko.
But lean, like Baldrige, is about far more than quality and cycle time improvements: They are transformative systems, changing the cultures of the organizations that implement them. They help shape strategy, redefine measurement, and engage employees in the process.
Jusko describes an automotive industry supplier, Autoliv, as an example of the human side of lean. Last year at its Ogden, Utah, plant, “managers received 63 implemented ideas per person.” Most suggestion systems are lucky to garner one or two ideas per person per year, and not all of those are implemented. Imagine how good your processes could become if everyone who worked on them initiated more than one improvement every week!
An organization cannot get these kinds of results without engaging and empowering its employees, which is a cultural change for many organizations but a competitive advantage when it occurs.
As IndustryWeek’s Best Plants and Autoliv show, implementing lean differentiates them from their competitors by making their management systems a competitive advantage. Baldrige has the same effect.
To learn more about lean, check out a book called The Antidote by Anand Sharma and Gary Hourselt.
To read more about the transformation power of Baldrige, click on these articles: