T H E L E A N , M E A N N E W
Learning From Mistakes
For lean manufacturing to work,
you must integrate the social and technical
by
Drew Lathin and Ron Mitchell
A
S U.S. COMPANIES COMPETE GLOB-
ally, they face unprecedented pressure
to supply manufactured products that
meet increasingly stringent cost, qual-
ity and delivery requirements. The
drive toward agility in manufacturing
also means that firms have to cope with the need
for continuous change in product design, while
simultaneously reducing the cost and time required
for change.
Increasingly rigorous quality standards also
E C O N O M Y
require that each generation of new designs has
fewer defects than the generation before. These are
difficult standards to meet, even for the most able
of companies. As a result many organizations have
jumped on the lean production bandwagon.
Lean production is a term that was introduced in
the 1996 book The Machine That Changed The World.1
It describes the production system that Eiji Toyoda
and Taiichi Ohno developed at the Toyota Motor
Co. in Japan.
According to the authors, lean production, com-
pared with mass production,
... uses less of everything ... half the
human effort in the factory, half the
manufacturing space, half the invest-
ment in tools, half the engineering
hours to develop a new product in half
the time ... . Also, it requires keeping
far less than half the inventory on site,
results in many fewer defects and pro-
duces a greater and ever growing vari-
ety of products.2
It is no wonder that many manufac-
turing companies around the world are
trying to become lean producers. The
efforts of some U.S. companies to imple-
ment lean manufacturing are described
in the 1997 book Becoming Lean.3
QU A L I T Y P R O G R E S S I J U N E 2 0 0 1 I 39
L E A R N I N G F R O M M I S TA K E S
Mass production leads to waste
The mass production paradigm in effect today results
in a great deal of hidden waste. Much of this waste is in
overproductionironically, the primary objective of the
mass production model. Overproductionproducing
as much as possible, as fast as possible as soon as pos-
siblecauses or increases the other types of muda (the
Japanese word for waste) inherent in mass production
systems.
One type of waste resulting from mass production
is excess inventory. The expense of carrying invento-
ryfloor space, extra handling, counting, the cost of
moneyis an obvious waste inherent in mass produc-
tion. Other types of muda that result from mass pro-
duction may be less obvious. They include time and
money wasted in handling and transporting large
batches of material, labor and equipment capacity
wasted in producing supposedly economical order
quantities, and increased time and cost to find and
correct defects in large batches.
Converting a classic mass production system to lean
production will double labor productivity all the way
through the system while cutting
production throughput times by
90% and reducing inventories in We can demonstrate that an
the system by 90% as well. Errors
reaching the customer and scrap approach including people and
within the production process are
typically cut in half, as are job relat- culture is essential to the success of
ed injuries, according to James
Womack and Daniel T. Jones.4 implementing lean manufacturing.
Learn from history
The widespread interest and activity in lean manu-
facturing closely resemble the quality movement in
the United States in the 1980s and early 1990s. Many
of the same mistakes made in the zest to improve
quality are being repeated in the quest to become lean.
Many companies started their quality movements
by copying techniques from successful Japanese firms.
First it was quality control circles and then statistical
process control. These were followed by increasingly
more sophisticated techniques such as design of
experiments.
Real progress, however, had to wait until more pro-
gressive companies realized that quality improvement
required more than rote copying of techniques
applied by other firms. Quality improvement was
only achieved after companies implemented compre-
hensive change management programs such as total
quality management (TQM) that addressed both
social and technological aspects of quality manage-
ment. Many companies today are repeating the mis-
takes of the past when they attempt to implement lean
technology without accounting for social issues.
40 I QU A L I T Y P R O G R E S S I J U N E 2 0 0 1
We encourage a new approach for planning and
implementing lean technologies that is consistent with
the lessons learned a decade ago in the TQM effort.
We can demonstrate that an approach including peo-
ple and culture is essential to the success of imple-
menting lean manufacturing. This article introduces a
predictive and planning tool called the Lean
Implementation Planning Matrix, which helps deter-
mine which specific people and cultural factors will be
problematic for lean efforts.
Sociotechnical systems
Sociotechnical systems (STS) integration is a con-
ceptual model that enables organizations to introduce
the new processes and methods of lean manufacturing
more effectively. Its benefits include faster and more
complete utilization of lean methods and greater eco-
nomic impact.
The STS method is based on the assumption that all
work organizations combine a technical system and a
social system. The technical system includes the orga-
nizations technology and work process. The social
system includes its people,
organizational structure and
culture.
The technical and the social
systems are interdependent,
with neither able to perform
the work of the organization
without the other. Technology
requires people to operate
within the confines of the work
process. When lean methods
are introduced, there is a need to consider the interac-
tion of new methods with the existing social system.
Lean methods are more likely to yield promised
benefits where the characteristics of the existing social
system are capable of supporting and sustaining the
new technical system. For example, organizations that
have a good history of collaborative problem solving
and teamwork have a social system that is in align-
ment with the introduction of work cells and teams
that staff them. Such organizations are more likely to
enjoy rapid deployment after the introduction of work
cells, a common component of lean manufacturing.
But where there is a misalignment between the
social and technical subsystems, the implementation
of lean methods can be problematic, and promised
economic gains may not materialize. For example, an
organization in which departments jealously guard
their own autonomy and freedom will probably expe-
rience a difficult transition when it tries to reorganize
by product families across functional boundaries.
Perhaps the most insidious barriers hindering the
widespread adoption of lean manufacturing are the
Technological Requirements of Lean Manufacturing
Six technological changes are
necessary to implement lean
manufacturing:
1
Transform the traditional batch
and queue production system
into a continuous flow system
where possible. Batch and
queue production systems are
characteristic of process
focused organizations.
Equipment is typically grouped
by type of function. For exam-
ple, all presses are in one
department, welders in another
and assembly in yet another
area. Material is produced in
large batches to maximize
machine efficiencies and trans-
ported to downstream opera-
tions where it waits in queue
before being processed.
In a continuous flow pro-
duction system, the equipment
is organized to support materi-
al flow. The machines are
arranged so material can be
processed and moved from
operation to operation, one
piece at a time (in a continuous
flow) with little or no waiting
time between operations.
2
Implement supermarket pull sys-
tems wherever continuous
flow is not possible. There are
situations that may prevent the
use of continuous flow from
raw material all the way
through to shipment. Wherever
continuous flow is disrupted, it
is necessary to implement an
alternative method for control-
ling inventory and scheduling
production. A supermarket pull
system is such a method.
The supermarket is the area
where material is stored wait-
ing for use. Just as in your
local supermarket, the objec-
tive is to have enough material
to satisfy customer demand
without having excess product
that increases carrying costs.
5
When the supermarket quanti-
ty reaches a predetermined
levela minimum quantity or
reorder pointa signal (the
pull) is sent out to schedule the
production of just enough
material to replenish the stock
consumed.
3
Smooth the demands on the pro-
duction system through the
adoption of standard order
(pitch) quantities and leveled
mixes of work orders. When
there are large variations in the
amount of product consumed
over short periods of time, it is
necessary to maintain large
inventories (with increased car-
6
rying costs) and/or excess pro-
duction capacities (with
increased investment costs) to
meet those variances. When
those variations in demand can
be reduced or leveled, the
investments in inventory
and/or productive capacity can
be reduced.
4
Improve the flexibility of the pro-
duction system through quick
changeover technologies. A
flexible production system is
one that can efficiently change
from producing one product
type to another. As batch sizes
decrease (toward the ideal of a
one-piece batch), it will be nec-
essary to change over from one
product to another much more
QU A L I T Y P R O G R E S S
frequently. The production sys-
tem will be better able to han-
dle an increase in product mix
and a decrease in production
quantities when the time and
effort required to change over
machines is reduced.
Improve the reliability of the pro-
duction system through total
productive maintenance tech-
nologies. With production
equipment linked in a continu-
ous flow arrangement, the
effects of equipment break-
downs are magnified. When
one machine in a cell goes
down, the other machines do
not have a queue of work to
keep them running. Therefore,
it is essential that all equipment
be properly maintained to pre-
vent breakdowns. Predictive
and preventive maintenance
must replace breakdown and
repair maintenance.
Improve the repeatability of the
production system through
process controls and poka-
yoke quality technologies.
When excess inventories of
product have been removed
from the production system, it
is no longer possible to simply
replace defective products
from stock. To make just in
time production work, 100%
quality production is essential.
Inspection based quality sys-
tems do not achieve 100%
quality levels. It is therefore
necessary to adopt a preven-
tion based system of quality
control through the use of
process control plans and error
proofing (poka-yoke) devices.
I J U N E 2 0 0 1 I 41
L E A R N I N G F R O M M I S TA K E S

beliefs, norms and values that comprise the mass pro-
duction mind-set (in other words, the belief that more,
faster, sooner is better). This can sabotage the right-siz-
ing of technology required to become a lean producer.
The point is that without a careful consideration of
the existing social system, barriers may arise that
slow or thwart various aspects of lean production
implementation. Some of the social factors will be
obvious to the casual observer, but many will not.
Instead, they will surface at critical points in the
implementation process, causing added and unex-
pected chaos during an already hectic rollout. The
trick is to anticipate the social barriers before they
arise and plan for managing them during the techni-
cal system design.
Joint optimization
The process we employ to do this is called joint opti-
mization, which is the process of simultaneously
designing the social and technical subsystems to create
an overall work organization that is capable of high
performance. Joint optimization recognizes that a
work organization that attempts to optimize the tech-
nical subsystem at the expense of the social subsystem,
or vice versa, is likely to have suboptimal performance
overall. High performance requires that both subsys-
tems be operating effectively together, aligning new
technology, work processes, reward systems, person-
nel practices and organizational structure.
The sociotechnical design process follows four
steps:
1. Design the preliminary technical system. Value
stream mapping is a relatively new technique that has
helped many companies plan the technological changes
necessary to transform their mass production systems
into lean production systems. Value stream mapping is
described in detail in the book Learning To See: Value
Stream Mapping To Add Value and Eliminate Muda.5
Value stream mapping begins with the creation of a
current state map (see Figure 1 for an example).
Current state maps describe the flow of material and
information through the production system. Through

FIGURE 1 Current State Value Stream Map

Yearly forecast Production control Yearly forecast

Forging Customer
suppliers Monthly orders MRP* Weekly orders

Weekly schedule Weekly ship schedule

Monthly Weekly
Daily schedule

Turn 01 Turn 02 Broach Mill New brits Heat treat Assembly

I = 37,516 I = 1,270 I = 1,612 I = 841 I = 1,686 I = 610 I = 465 I = 2,061

107 days 3.6 days 4.6 days 2.4 days 4.8 days 1.7 days 1.3 days 3 days

C/T = 95s C/T = 152s C/T = 30s C/T = 912s C/T = 112s LT = 12h C/T = 450s
S/U = 90m S/U = 90m S/U = 60m S/U = 180m S/U = 270m C/T = 216s S/U = 0
Rel = 57% Rel = 57% Rel = 90% Rel = 80% Rel = 80% S/U = 150m Rel = 100%
3 shifts 3 shifts 1 shift 3 shifts 1 shift Rel = 80% 2 shifts
1 shift

I = Inventory s = Seconds
Inventory days = 133.6 days C/T = Cycle time m = Minutes Current state map
Value added time = 32.8 minutes S/U = Set up for clutch manufacture
Rel = Reliability June 2, 1999

* Manufacturing resource planning

42 I QU A L I T Y P R O G R E S S I J U N E 2 0 0 1
 FIGURE 2 Future State Value Stream Map
Customer purchases 83,000 per year or 332 per day
TAKT time (the rate of consumption) = 162 seconds per piece
over a 2 shift operation

Yearly forecast Production control Yearly forecast

Suppliers Customer
Daily orders MRP* Daily orders
2 Days

Daily ship schedule

Daily Daily

2 Days

Turn 01 Turn 02 Broach and mill New brits Heat treat Assembly
FIFO FIFO FIFO

2 Days 2 Days 5 Days

C/T = 95s C/T = 152s C/T = 124s C/T = 116s C/T = 124s C/T = 113s
S/U = 90m S/U = 90m S/U = 180m S/U = 2.5h S/U = 0 S/U = 0
Rel = 57% Rel = 57% Rel = 72% Rel = 80% Rel = 98% Rel = 100%

FIFO = First in first out s = Seconds Future state map

9 days of inventory
C/T = Cycle time m = Minutes for clutch manufacture
Value added time = 14.4 minutes
S/U = Set up h = Hours June 3, 1999
Rel = Reliability
* Manufacturing resource planning

analysis of current material and information flows it is
possible to identify the technological changes necessary
to transform the production system into a lean one. The
future state map serves as a blueprint for planning and
constructing the system (see Figure 2 for an example).
2. Test the preliminary technical system against the
existing social system. After the preliminary technical
design is complete, it should be tested against the
existing social system. This is done to ensure the antici-
pated changes can be implemented. Too often, organi-
zational factors impede the implementation of lean
practices. It is far better to try to predict which organi-
zational factors will obstruct the implementation of
lean production and adjust for them in the design
phase than to wait for the implementation phase.
The first step in conducting the joint optimization
analysis is to conceptually determine the individual,
organizational and cultural variables relevant for
implementing lean production. These variables or
potential issues are gleaned from the literature, experi-
ence, knowledge of the organization and common
sense. Our experience tells us that the following vari-
ables are among the potential roadblocks to lean
implementation:
A mass production mind-set.
Peoples need for autonomy.
A lack of real-time information for shop floor pro-
duction and inventory management.
Sales bonuses that create spikes in end of month
demand for goods.
Piece rate pay systems.
Feelings of status among technical specialists that
make them resist cooperation with factory floor per-
sonnel.
A bigger is better mind-set applied to technology.
A full utilization mind-set or belief that machines
and people must always be busy.
All the well-known barriers, such as individualism,

QU A L I T Y P R O G R E S S I J U N E 2 0 0 1 I 43
L E A R N I N G F R O M M I S TA K E S

FIGURE 3 Lean Implementation Planning Matrix (Partial)

Strategy Implement continuous flow production Summary

Technical Organize equipment Schedule production Utilize multiskilled workers
changes into product cells to match TAKT time
Required Management Management Workers Cell workers Machine Machine Machine
behavioral focus will will implement will follow will perform operators operators operators
changes change from a fast response standard as part of a will be will be will be
Technical system

departmental system to work synchronized able to able to able to

(machines) to correct methods production perform run all perform
products (cell) production team own mahcines quality and
problems setups in the cell maintenance
checks
Social system
Individual factors
Desire for -2 -2 +1 +1 +1 -1
autonomy
Management 0
understanding
and ability
in new
coaching role
Teamwork skills -1 -1
Understanding -1 -1
of new system
Employee 0
motivation
Group factors
Understanding 0
of new
roles and
responsibilities
Understanding 0
of results
expected
Mass -2 +1 -1 -1 -2 -5
production
mind-set
Continuous 0
improvement/
kaizen activities
in place
Experience in -1 -1
team concept



Summary -3 0 -1 -4 0 0 -1

Plus = facilitates 0 = is neutral Minus = is a barrier TAKT time = rate of consumption

individual reward systems, competitive spirit and presence and strength of these variables. Question-
multiple job classifications, to teams and teamwork naires, surveys, interviews and focus groups are just a
at all organizational levels. few we have employed.
Using a process that identifies these barriers and To determine whether these variables facilitate,
puts them on paper makes it much harder for system impede or are neutral with regard to the ideal future
designers to ignore their potential impact on lean state, you can construct a joint optimization matrix we
implementation. call the lean implementation planning matrix. At the
A variety of methods can be used to determine the top of the matrix the various features of the technical

44 I QU A L I T Y P R O G R E S S I J U N E 2 0 0 1
changes (strategy, technical changes and behavioral
changes) are entered. These are fairly predictable.
The social variables are entered along the left-hand
column. They are organized into five categories: indi-
vidual, group, intergroup, company and intercompa-
ny factors (see Figure 3 for a partially filled out
matrix). Then a determination is made in each cell
indicating whether the existing social system variable
strongly or weakly facilitates, is neutral, or weakly or
strongly impedes the lean behavior at top.
A rating scale is used to determine the strength of
facilitation or impediment (+2, +1, 0, -1, -2). A summary
score can be determined by adding the values entered
in the cells to determine whether the particular lean
behavior is at risk or not (column sums) or whether a
social system factor is supportive or not (row sums).
For example, in Figure 3 it can be seen that the mass
production mind-set is a strong barrier as evidenced
by its being a mismatch with a number of required
behavioral changes. The desire for autonomy,
although having a number of interactions with the
required behavioral changes, is basically a wash since
it both facilitates and impedes a number of factors.
Looking at row sums, however, we can see that the
desired change cell workers will perform as part of a
synchronized production team is at great risk
because a number of social system factors are barriers.
Another desired change, management focus will
change from departmental (machines) to products
(cell), is also at risk.
With this information, it is now possible to see
which behavioral changes are at risk, what the barriers
are and why, prior to implementation. Targeted action
planning can occur to ameliorate these negative effects.
3. Design the final sociotechnical system. In cells
where mismatches are identified (in other words,
where the present social system factor impedes the
lean technique), system designers face two choices.
First, they can change the social system. For example,
when individuals are performing individual jobs, and
continuous flow manufacturing requires the implemen-
tation of work teams, it may be necessary to address a
variety of individual, organizational and cultural fac-
tors to facilitate multiskilling and working together as a
team. Changes could include developing team skills for
workers and management, developing a culture of
mutual respect and cooperation across functional
groups and making changes to the labor agreement.
The second option for dealing with mismatches is to
modify the preliminary technical system design.
Where it is determined that the organization will ini-
tially be too resistant to changes, some compromise in
the ideal technical future state may be needed. This is
often disheartening to system designers and manage-
ment. If it is remembered that the change process
incorporates an ongoing continuous improvement
phase, many of these ideal technical features can often
be implemented later in kaizen (continuous improve-
ment) activities when the organization is more
amenable to the concept.
4. Assemble and place all the changes to the tech-
nical and social systems into an implementation
plan after the new sociotechnical system is complete.
A good project management methodology and tool
are essential to keep track of the changes being imple-
mented.
Total system required
While the literature is replete with examples of lean
manufacturing implementation success stories, far
more organizations are reaping only 25 to 50%, if that,
of the anticipated results from lean implementation.
Our experiences point to the lack of a total sociotech-
nical methodology as the cause. This methodology is
systematic, starting with the creation of a current state
map and proceeding through a variety of steps to
design of the lean production system, testing that
design against the existing social system and then
designing a jointly optimized sociotechnical system.
Jointly optimized sociotechnical systems will
increase the rewards of lean manufacturing, improv-
ing the bottom lines of organizations that use them.
REFERENCES
1. James P. Womack, Daniel T. Jones and Daniel Roos, The
Machine That Changed the World (New York: Rawson Associates,
1990).
2. Ibid, p. 13.
3. Jeffrey K. Liker, Becoming Lean: Experiences of U.S.
Manufacturers (Cambridge, MA: Productivity Press, 1997).
4. James P. Womack and Daniel T. Jones, Lean Thinking:
Banish Waste and Create Wealth in Your Corporation. (New York:
Simon and Schuster, 1996).
5. Mike Rother and John Shook, Learning To See: Value Stream
Mapping To Add Value and Eliminate Muda (Brookline, MA: Lean
Enterprise Institute, 1999).
DREW LATHIN is a founder of the Lean Enterprise Action
Network LLC, an Ann Arbor, MI, lean production consulting
firm. Previously he consulted on team based work systems. Lathin
earned masters degrees in industrial relations from Purdue
University and organizational behavior from Carnegie Mellon
University. He is a member of ASQ.
RON MITCHELL is a founder of the Lean Enterprise Action
Network LLC, an Ann Arbor, MI, lean production consulting
firm. Previously he consulted in quality and productivity
improvement. Lathin holds masters degrees in industrial/organi-
zational psychology from Central Michigan University and
applied behavior analysis from Western Michigan University. QP
QU A L I T Y P R O G R E S S I J U N E 2 0 0 1 I 45