Silos of Lean

Few companies see this connection between Toyota leadership and the company’s exceptional results. They see Toyota’s methodical approach to everything it does and quickly leap to the conclusion that the technical system is the solution. But replicating Toyota’s technical systems without understanding their source—the engine that drives the system, you might say—has largely proved futile. While impressive gains from adopting some version of TPS or lean are common, they are almost never sustained. Why? Because tools and blitz events don’t ingrain the leadership needed to coach and sustain a large process change within the existing company culture.

This is not to say that “lean” doesn’t work. On the contrary, thousands of companies have derived benefits from lean projects. Those benefits can be significant, as when one of the largest banks in Belgium embarked on a lean program and documented a one-third reduction in labor in one of its largest divisions. Yet these successes can most accurately be described as “point improvements,” unconnected to a broader set of business goals. The standard point approach is to implement a process experimentally in a silo of the company. In the case of lean, the silo may see production lead time decrease from five days to three, or production costs be reduced by 20 percent. Everyone cheers these improvements and then turns to the next lean project.