In this article, I’d thought I’d share with you the power of using the house of lean model, to get your lean improvements lined up in the right order.
What is the House of Lean? The House of Lean is a model, originally created by Toyota from their lean production system, which identifies the main factors that must be perfected to create an efficient and effective business system. These factors focus on improving process performance and are depicted by a house, to show their order and priority of implementation. For instance, at the foundation of the house comes the creation of stable processes and an organised work environment. The two pillars focus on making reliably and consistently to what the customer expects, as well as ensuring defects aren’t passed on across processes. In the middle of the house is the creation of empowered teams. The roof depicts the outcomes of these tools through improved delivery, quality, lead-times and profitability.
Let’s delve a little deeper to show you what I mean about the house of lean improving me as a lean practitioner. Here’s my version of the house of lean.
It’s Just a Process!!
I like to keep things simple. The same is true when practising lean. There are a lot of people that spend far too long pontificating and adding (largely) unneeded formulas and equations to analyse process fixes.
Some process may need this. But these are on the odd occasion. Most improvements can be defined and implemented pretty simply.
The House of Lean shows us that actually, when you strip away all the complexities that are in your business, there are really 2 factors that matter when delivering the customer what they want, whilst creating a lean enterprise:
That’s it. Everything we do thereafter should be about using the people to improve their processes.
And if we do this consistently, we’ll make drastic improvements in our business.
The House of Lean allows us to see a business in this simple fashion.
Don’t underestimate the power of it though. Get it right and you’ll be able to make big inroads to creating a lean enterprise.
The House of Lean Foundation
Like building a house, you need to lay good foundations.
In lean, we need to build our own lean foundations. The House of Lean shows us that we need to create two key things first:
- Stable processes
- Organised and controlled work environments
What Does That Mean?
Well, without stable processes, how can you build a solid foundation? You can’t. It’s impossible.
Processes need to be standardised. Everyone should know exactly how to do something in the most effective way.
If people follow the same standards you get a more consistent output.
In fact the whole DNA of a lean process is to achieve the following 4 requirements:
- All work is specified in terms of content, the correct sequence, the time it should take and the necessary outcome.
- Every customer-supplier relationship connection in a process must be clear and direct. There should be a clear yes or no format to identify when more work needs to be processed or not.
- The pathway along processes for every product or service is simple and direct.
- Improvements are made using the scientific method, under the guidance of a teacher.
Standardise the Work Area
Another part of this foundation is to organise the work environment, so it’s optimised for the processes we run.
This is conducted via 5S and workplace organisation principles.
How can you expect great efficiency and stabilised processes if the workplace around you is messy, disorganised and full of clutter? The reality is you can’t.
And with an organised environment, the area is optimised for easy retrieval of information and equipment, that’s both capable and available when you need it.
The bottom line is this:
Processes must be optimised and standardised for the current and agreed best way to run them. This should include identifying how long tasks take to complete; making it easy to see when to process more; removing complexity and being able to see their performance so you can constantly improve any deficiencies.
As part of this, you must organise your areas to suit these agreed ways of working, so you can make it incredibly easy to find what you need – fast.
The result should be process and workplace standardisation…which has a big impact on stability and performance.
The House of Lean: 1st Pillar – Reliable Delivery
Your processes and work environment are now standardised – check!
It’s now time to turn our attention to how the business becomes reliable in its delivery.
The components of creating reliable delivery include some of the classic lean tools like:
- Level loading
- Pull principles and making only to what the customer wants
- Flowing work through processes
The above means that we need to reduce batch sizes as much as we can so we can flow our information and products through the processes efficiently.
We want to make only to what the customer wants. That means no over-producing and stocking product that we may sell another time. We want to link our processes together, using Pull Principles, to ensure everything works in unison and to the same pace and triggers.
Essentially, under this pillar, we’re optimising what we make and how, so it flows through the business as efficiently as possible, in a highly repeatable fashion, with just the right resource and material to get the job done.
The Benefits of Level Load
When we level load, we cycle through work quicker. We do this by reducing batch sizes and releasing multiples of jobs in smaller time increments, like below:
As we know, the smaller each batch, the more agile our production is. This in turn means we have to changeover our machines faster, too. This helps improve our agility and productivity, which has a knock-on effect to flow and pull.
By focusing on these three key elements, we can build on our standard processes, and develop a clear understanding of how the facility manufactures each part to optimise delivery.
And by implementing these 3 tools effectively, we’ll be able to provide a reliable way of working that can be repeated over and over again.
The House of Lean: 2nd Pillar – Building Quality Into Processes
The other side of our house of lean focuses on improving quality in our process.
By creating standard work (the foundation) and organising our work environment to suit this standard work, it’s more than likely that we’ll increase repeatability and quality.
However, errors can still happen.
And it’s what we do about them that matters.
In this second pillar, we need to:
- Ensure that we can improve our processes so we don’t pass defects on to the next step
- Try to error proof our processes so we can’t physically make any mistakes in the first place
- And if we do spot errors, stop and fix the root causes so the error doesn’t return
I’ve written an article on autonomation, which is very much a part of this pillar, too.
This whole pillar is dedicated to error proofing and using PDCA to drive continuous improvement in detecting and eliminating root causes to problems.
Inside The House of Lean – Empowered Teams
So far, everything we’ve talked about is solely on processes and improving them.
It’s people that run these processes.
It’s people that have a big impact in terms of how these tools are implemented and whether they’re followed.
Do you think a group of employees that are unhappy at work and looking to leave, will embrace our house of lean?
Do you think they’ll jump to it to make improvements in their own processes?
Would they be bothered identifying defects and looking to error-proof their processes?
Are they indeed motivated to make an impact?
We can all agree that the answer is a big no.
Yet, how many managers think lean is just about implementing process fixes?
Far too many, indeed.
Lean practitioners are guilty of this too. Most will spend over 90% of their efforts and time on implementing lean process improvements (some even implementing lean for people), and only 5% of their time involving teams and ensuring that proper change management is taking place.
A daily leadership framework helps fix this problem. I call it lean leadership.
Lean leadership consists largely of best practice leadership practices, which involve:
- Empowering others to take responsibility and to identify improvements
- Training teams so they are capable of making lean improvements
- Coaching teams and individuals to allow them to learn and apply the tools in a safe environment
- Incentivising employees so they can work to common goals and become inspired
- Rewarding employees and celebrating their successes
- Allowing the teams to create their own action plans to support organisational goals
The above takes time and effort but must happen to ensure that employees are motivated, happy, energised and engaged… and the business is optimised, too.
This means a lot of time should be spent in developing leaders to be able to coach their employees and empower them. That’s what the main wheel in the model below is all about.
Managers and supervisors walk their areas and coach at every opportunity.
They spend time discussing process performance and asking how things could be improved. They also empower teams by encouraging improvement ideas that they implement themselves.
Here’s how the model stacks up.
The House of Lean: Roof
Everything that’s gone into our house so far has created a foundation and structure to support the roof.
We have solid foundations in standard work and workplace organisation.
We’ve increased reliability to our customers and reduced quality liabilities.
We’ve also developed leaders by training them to lead lean initiatives and coach their teams for results.
At the same time, the employees are now being coached, empowered and acknowledged to make an impact.
The roof are the results of our efforts.
When all these facets come together, we can expect drastic improvements in customer value.
What do i mean by customer value?
Value is what the customer wants and expects to pay for. It could be a number of things, like:
- Fast lead time
- More choice
- Warranties and guarantees
- Deep customer-supplier relationships
There are more, but you get the gist.
By following this house of lean, you can make huge improvements to what the customer receives and expects.
This in turn means that you’re probably more competitive than other companies offering the same service or products.
As a result, you’ll win more business, and the impact snowballs.
As a supplier, you’d also expect greater margins – because lean allows you to produce more with less resource.
As I’ve defined in previous posts, I’ve seen businesses transformed by the proper use of the house of lean. Here are some examples:
- One company managed to go from around 10 products offered on their website, to over 100 – providing unrivalled choice to their customers
- The same company achieve standard products within 5 days, which used to be 25 days plus
- A door manufacturer doubled their productivity and sales without having to increase headcount. They achieved 2 week lead-times, as opposed to over 5 weeks which other companies were providing.
- Another manufacturer achieved next day delivery, as opposed to 5 days, prior to lean.
How You Can Use the House of Lean In Your Role?
When you walk the business, look for evidence, or lack of, of each of the 4 facets:
- Standards and standardisation
- Quality at source
- Reliable delivery
- Empowered teams
Look for the following signals:
Walk your processes – Using either process maps or a value stream map, identify what processes are not fully endorsing the house of lean standard and demonstrating:
- High defects and not-right-first-time
- Poor workplace organisation
- lack of simple yes/no triggers to make or not make (pull principles)
- Lack of standard work, whereby people are working in their own ways
- large batches of work (both information processing and product)
- Lack of understanding of how long things should take
- Lack of understanding of who does what and when
- Lots of stock
- The same errors keep appearing
- poor communication – and frustrated employees as a result
- Lack of team discussions, empowerment and trust
- Little leadership coaching and development
Track performance – are all departments tracking what matters to them? These metrics should show process performance. Here are some examples:
- picks completed to plan
- products produced each hour to plan
- errors in quoting
- number of quotes to plan
- quotes turned around within 5 hours
- machine downtime and reasons why
- customer complaints
Are processes hitting these targets – From this information, identify a picture of where the main processes are failing / missing plan.
- Now begin to document and standardise these critical processes. Standardise the work areas too, using 5S
- Develop flow and kanban by reducing batch sizes, whilst linking processes through simple “yes/no” triggers
- Develop clear metrics and track them daily, using stand up meetings. Use these forums to take action to fix problems, and root causes, too
- Create team goals and clear standards and responsibilities
- Train leaders to lead the lean way
You can get a House of Lean Handout Here for free.