THE MACHINE THAT CHANGED THE WORLD APPLYING LEAN

PRINCIPLES TO THE WATER BUSINESS

Ken Campbell, P.Eng., R.V. Anderson Associates Limited*
*R.V. Anderson Associates Limited, 2001 Sheppard Ave. East
Toronto, Ontario M2J 4Z8

INTRODUCTION
Several years ago, as chair of my companys QA Committee, I received a challenge from
the president of our company, to consider how the Lean process could be used to
improve our business. Through his involvement with North York General Hospital
Board, and a Local Heath Integration Network, he had seen promising results of applying
the Lean process to health care.
My first challenge was to try to understand what Lean was.
My research about Lean led me to what I felt was the original book on the
topic.The Machine that Changed the World. This book was written in 1990 by 3
founding members of The International Motor Vehicle Program (IMVP) part of MIT.
The book focuses entirely on automobile manufacturing, and it claims that one of the
IMVP researchers coined the term Lean manufacturing because it was leaner in all
ways than mass manufacturing.
The book states that the automobile has been manufactured in three different eras as
follows:
1. CRAFT Manufacturing Era:
Cars were first manufactured in the late 1800s. They were built one by one, by
highly skilled workers - craftsmen, using simple, flexible tools. Each car was
different, built to meet the specific requirements of the buyer. But each car was
also different depending on the skills and building techniques of the builder.
These cars were costly and had lots of defects, since every car was essentially a
prototype a one off. The craft manufacturing era was almost completely
eliminated by the second era of manufacturing the Mass Manufacturing Era. It
is interesting to note, however, that this type of manufacturing still exists today.
One example used by the authors is the manufacturing of space craft.

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2. MASS Manufacturing Era

The Mass Manufacturing Era was started by Henry Ford, and was later perfected
by Alfred P. Sloan. (A quote from Wikapedia: Under Sloan's direction, GM
became the largest and most successful and profitable industrial enterprise the
world had ever known.)
The most important component of mass manufacturing was not, as most think, the
assembly line, but rather the concept of interchangeable parts. Parts
manufactured with tight enough tolerances did not need filing or fitting by skilled
craftsmen. In other words, no skill was needed workers could be simply trained
to bolt one part to the next. That key unlocked the possibility of the assembly
line, and automobile manufacturing was never the same. Features of mass
manufacturing included:

Each assembly line could only do one product

The manufacturer tried to make as many identical products as possible
Companies typically had poor relationships with parts suppliers bidding,
games, etc.
Lower production cost was always the goal, but the goal for quality was
Good Enough
Another goal was to sell products, not gain customers
The system generated huge inventories of parts and finished products
If faults occurred, it could be a long time before they were found after
hundreds or thousands of units had been finished
Mass manufacturing was very slow to respond to consumer wishes and
sometimes ended up with huge stockpiles of cars no one wanted to buy.
Large rework areas of plants were usually required, to try to fix problems at
end of assembly line.

3. LEAN Manufacturing Era:

As part of Japans post-war rebuilding, Eiji Toyoda was sent to visit the United States
in 1950 to help his family business understand how Americans make cars. He
learned a lot, but came back to Japan with many ideas of how manufacturing could be
done better. Toyoda knew that Japan could not support the volumes required for
mass manufacturing. He began to develop a new approach to suit the specific needs
of Japan. This included:

Focus on development of long term customers

Developing teams of multi-skilled workers
Flexible machines were developed making it easy to change products
quickly, and have much smaller production runs, allowing quick response to
customer demand

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One goal of Toyoda was Perfection Everyone in the company was

encouraged to identify problems, and work towards solutions always
striving for perfection
Another goal was Continuous Cost Reduction through a continuous
improvements and elimination of waste
Toyoda wanted to develop strong relationships (frequently partial ownership)
with suppliers. Staff from suppliers were invited to work in Toyota assembly
plants to help solve problems. Toyota staff were also sent to work in suppliers
design offices and factories to support and improve their suppliers products.
On the assembly line, every person was given responsibility for quality each
person could shut down line, if they saw a problem. Faults were to be
identified and dealt with immediately.
Another goal was the total elimination of rework. The finished product at
end of the assembly line was to be perfect.
To keep plant sizes smaller, and to keep costs down, Toyoda wanted minimal
inventories, which led to the just in time delivery of parts.
If defects were found in any parts, the defects would usually be found quickly,
since the parts were used immediately.

This type of manufacturing was very difficult to set up, took huge time investment
and commitment, but ultimately ended with superior results. These results included:

significantly fewer defects in product

lower costs
faster model switches
lower product volumes
more flexibility to respond to customer demands
higher company growth and profitability

This manufacturing approach was ultimately given the label of Lean

Manufacturing.

IS THIS RELEVANT TO THE MUNICIPAL WATER BUSINESS?

My first reaction to reading the book was that it had little relevance to consulting
engineering and the municipal water business in general.
For example in consulting, our work is almost always different from one day to the
next. Many of our projects are unique from one project to the next. In fact, our industry
seemed to be much closer to the craft industry described in the book, than either the
mass-produced or lean type manufacturing world.

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However, on more careful second thought there were a number of attributes of Lean
Manufacturing that could be applicable to our business. Some of these are as follows:

Focus on long term customers at our company 80% of our work comes
from long term customers, and we recognize they are of critical importance to
the success of our firm.
Goal of perfection Elimination of designs that require too much time to
commission or operate, equipment that breaks down, pipes that break.
Elimination of Waste We know we have some wasted time, and wasted
effort we would be more successful if we found ways to eliminate this
wasted time and effort.
Strong relationships with suppliers. Positive, long term relationships
between municipalities, system operators, consultants, sub-consultants,
equipment suppliers, and the Ministry of the Environment can have many
long term benefits.
Total Elimination of Rework We may not call it that, but every
consultant recognizes the concept things getting done wrong the first time,
and needing to be re-done. Im sure its the same with others in our business.
Every person responsible for quality QA is a huge focus in consulting and
in drinking water supply we know that generating quality work is expected
by our clients but consistently delivering quality work is not easy.

As noted in the first paragraph lean thinking has been successfully applied to other
service industries such as health care. So yes perhaps Lean is something that could
be relevant to the water business.
WHAT IS LEAN FOR THE WATER BUSINESS
My suggested definition of Lean Processes for the water industry is:
An systematic process to identify, develop, implement, and monitor methods to
improve the quality of our service/product, and increase the efficiency of its
delivery/production.
Another way to look at Lean is in terms of elimination of wastes:
Lean management is a total business approach designed to identify and
eliminate forms of waste in both the process of producing goods, services, or
combinations of both. (Ball, 2003)
There are many possible Wastes. Some examples include:

Talent
o Using over-trained staff to do certain tasks (under delegating)
o Using undertrained staff for certain work (over delegating)
o Loosing key staff

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o Not being able to attract talented staff

Motion
o How people need to interact with other people driving, walking
around the office, etc.
o Too many people doing the same thing
o Staff time spent driving to sites
Waiting
o Having steps that stall the completion of a task, and leave people
waiting
o Having too many steps in a process, that results in slow delivery
Defects
o Design errors or poor workmanship
o Mis-coordination of design
o Missed construction problems
o Erroneous sampling or testing
Behaviours
o Staff interaction problems
o Confusion over whos doing what
o Negativity or morale problems

STEPS TO LEAN IMPLEMENTATION:

The world is full management consultants and Lean implementation specialists. There
is a whole science of Lean, with very detailed terminology and numerous approaches to
implementation.
However, it does not require an expert to understand the basic principles. For most of
our businesses, the concepts can be kept fairly simple. The basic steps can be
summarized as follows:
Step 1:

Decide on your approach:

Do you need improvements?
Is there a business case for Lean Process Improvements?
Do you have internal support?
How will you educate people about the program?
Will you do it on your own or hire someone to assist?
Who will lead the initiative?
What methods will you use?

Step 2: Identify the ideal service or end product

Specify the values of the finished product consider
Regulations
Client Satisfaction
Quality
Performance

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Step 3: Identify your metrics.

Identify what you can measure, to tell you how well you are doing.
Consider costs, cost breakdowns
Internal and external benchmarking.
Staff utilization ratios, project billable ratios, profit ratios
Water quality standards
Customer Complaints
Staff turnover statistics
Step 4: How do you deliver your service/product (Process Mapping)
Understand the details of exactly how you deliver your service/product
Do flow charts or value streams or process mapping including actions,
interactions, and steps. (These may start with broad steps, then zero in on finer
details later where necessary.)
Step 5: Identify wastes:
Look at the list of wastes in the previous section and your ideal product or service
in Step 2, and think about how you deliver your product/service in Step 3, then
Identify all the specific wastes possible
Select your waste reduction priorities.

Step 6: Develop Approach for each Priority Waste

Assign a leader to tackle the issue/waste
Consider hiring someone, hiring a company, setting up a working group,
developing a cross department team, or any other approach depending on the
specifics of your waste reduction challenge
Develop Action/Implementation Plan
Hold workshops to review new ideas and concepts
Step 6: Implement Changes
Step 7: Monitor Results
Step 8: Refine/modify as Necessary
SOME KEY POINTS:

Lean initiatives must be supported and led from the top of the organization.
Otherwise they wont be successful.

A culture has to be developed in which everyone in the organization needs to

understand the benefits and support the initiative.

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Unless there is leadership and broad support, change will be difficult and success
will be harder.

Many of our organizations have been taking many of the steps listed above for
years, without calling it Lean. But there can still be a benefit to thinking in
terms of a Lean process. This type of process and thinking can provide a
framework, and clarity of thought towards organizational improvement.

SOME EXAMPLES
In recent years one of our primary tools has been Principal/Associate meetings where
50-70 of our senior staff meet to focus on specific areas of our firms operation. In recent
years, these groups have identified numerous issues or wastes that we have
subsequently addressed. Some of the specific wastes that were identified in our
workshop system and that we have tackled include:

Inadequate Specifications Recognition of an inadequate system to update and

customize plant and facility specifications, which led to a 6-month program to
develop a Master Specification along with a methodology for updating the
Master.

Inadequacies and inefficiencies in handling Shop Drawings. This led to the

development of a Shop Drawing Coordinator Position and development of
standardized methods for handing the submissions as they come in and go out.

Lack of coordination and prioritization in large interdisciplinary projects. This

led to the development a new Interdisciplinary project spreadsheet with a data
link to our corporate accounting system. The spreadsheet became a tool for a
coordinator to check in with project managers across the company, and the basis
for regular senior staff meetings to sort out priorities, and identify scheduling
conflicts before they became major problems.

AutoCAD External Reference (X-refs) Drafting Problems This specific

technical drafting problem was identified in a workshop session. A committee of
drafting staff worked was set up to developing a company standard, that is now
posted at every CAD workstation and is the law in our firm.

Repeating the same mistakes. We recognized that feedback from construction

to design didnt always happen, with the result that problems sometimes were
repeated. We have now implemented what we call Graund Rounds where
construction projects approaching completion are reviewed with the contract
administrator and all the original designers. Items are flagged and discussed with
designers so they wont happen in the future. Items are also added to a series
of specialty checklists for future reference.

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Quality Assurance. A number of our sessions have been devoted to education,

review, and renewal of our various in-house QA techniques.

None of these are earth-shattering, or particularly amazing. They are simply an

illustration of Lean thinking continuously looking and eliminating wastes and
improving quality and efficiency. They also empower a broad spectrum of our
organizations staff to have specific input into improvements.

DO LEAN PROCESSES WORK?

The Machine that Changed the World documents the incredible leaps of quality and
efficiency that occurred in the automotive world that were accomplished by what is now
called Lean Management.
There is no doubt that the basic principles of Lean thinking are very relevant to the Water
Industry, as they have been to other service industries such as heath care. At the same
time, the literature makes the point that lots of Lean initiatives are not successful.
Success in Lean is based on the people. There must be buy-in, support from the top and
support right down to the bottom. It has to be implemented in way that will be
sustainable and work with the culture of the organization. Lean implementation is not
just a one-time thing, it is a way of doing business, and will never be finished.
In summary, I would encourage everyone to spend a little time thinking about how your
organization works, and if the Lean approach could be something that could help you and
your organization to prosper in the years ahead.

REFERENCES:
1. The Machine that Changed the World The Story of Lean Production Toyotas
Secret Weapon in the Global Car Wars that is Revolutionizing World Industry. by
James P. Womack, Daniel T. Jones and Daniel Roos. (1990)
2. Lean Management of Environmental Consulting in Journal of Management in
Engineering by Daniel Ball and John Maleyeff (January 2003)
3. Numerous references and information are also available on the internet.
http://www.lean.org/

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