Table Of ContentBusiness & Management / Lean Methods & Implementation / Leadership Strategy K
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Any senior executive serious about leading a Lean transformation should start here. e
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Koenigsaecker captures well the essence of sustained lean success…. i
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—Larry Culp, President and CEO, Danaher Corporation
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Koenigsaecker has spent more time transforming organizations into Lean enterprises than
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any other CEO. In this brief volume, he summarizes his 30 years of experimentation by k
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describing Lean, showing how to measure it, explaining the role of value stream analysis
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and kaizen, and providing a tactical and a strategic action plan for Lean transformation.
—Jim Womack, Chairman and Founder of the Lean Enterprise Institute
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Koenigsaecker has been one of the most important mentors on our Lean journey. His
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willingness to share his knowledge and experience has been invaluable.
—John Toussaint, CEO, ThedaCare Center for Healthcare Value t
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This truly worked for us, and continues to make our Air Force better. The message comes r L
with great stories and legendary examples to make it readable for all. p
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— Michael W. Wynne, 21st Secretary, United States Air Force r
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Updated with new information, illustrations, and leadership tools, Leading the Lean
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Enterprise Transformation, Second Edition describes how the metrics used by Toyota n
drive every line item in a financial statement in the right direction. Rather than focus
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on Lean tools and principles, the new edition of this bestselling reference focuses on
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the least understood and most critical aspect of a Lean transformation: the building of a a t
Lean culture. In addition to new appendices with background information and insightful h
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stories on Lean leadership and implementation, it includes new information on tactical
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organization practices, strategy deployment, and Lean culture.
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Koenigsaecker illustrates successful strategies and valuable lessons learned with case e
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histories of U.S. leaders who brought Lean to the forefront. He explains the use of value
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stream analysis at the leadership level and describes how to structure correct kaizen
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events. Organized in the chronological sequence that a leader embarking on a Lean jour-
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ney would experience, the book discusses the methods used by the author during the Hon
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Company’s successful Lean conversion, which doubled productivity, tripled revenues,
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and led Industry Week to recognize Hon as one of the “World’s 100 Best Managed Firms.” o
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The book not only introduces powerful leadership tools—including strategy deployment,
transformation value stream analysis, and transformation plan of care—but also arms
potential change agents with the soft skills needed to define, develop, and communicate
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their vision. Detailing the steps required to sustain improvements, it supplies time-tested
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guidance for effective leadership. ic
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K12734 ion
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ISBN: 978-1-4398-5987-2
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www.crcpress.com
9 781439 859872
www.productivitypress.com
K12784 cvr mech.indd 1 8/21/12 11:27 AM
Leading the
Lean Enterprise
Transformation
Second Edition
Praise for the Bestselling first edition:
“Any senior executive serious about leading a Lean transformation should start here. Koenigsaecker
captures well the essence of sustained Lean success, not just the feel-good kaizen event.”
— larry Culp, president and CEO, Danaher Corporation
“Koenigsaecker has spent more time transforming more organizations into Lean enterprises than any
other CEO. In this brief volume, he summarizes his 30 years of experimentation by describing Lean,
showing how to measure it, explaining the role of value stream analysis and kaizen, and providing a
tactical and a strategic action plan for Lean transformation.”
— Jim Womack, chairman and founder, Lean Enterprise Institute
“This truly worked for us, and continues to make our Air Force better. The message comes with great
stories and legendary examples to make Leading the Lean Enterprise Transformation readable for all.”
— Michael W. Wynne, 21st Secretary, United States Air Force
“Koenigsaecker has been one of the most important mentors for me on our Lean journey. His willingness
to share his knowledge and experience with the ThedaCare team has been invaluable.”
— John toussaint, CEO, ThedaCare Center for Healthcare Value
“Koenigsaecker’s long and extensive study and application of Lean at the strategic and tactical levels
make him a foremost authority on the topic. He has a unique and valuable grasp of the tools, process
and change dynamics at implementing organizational Lean transformation.”
— stan askren, chairman, president, and CEO, HNI Corporation
“Few, if any, American executives can match the variety and depth of experience with Lean transforma-
tions of George Koenigsaecker. So it comes as welcome news that George has written a book telling
what he has learned and how he learned it. Leading the Lean Enterprise Transformation is simple, use-
ful, packed with information, concise, to-the-point, and easily accessible. It will be a great source for
companies looking to begin or advance their Lean initiative or managers at any level wishing to deepen
their personal learning.”
— John shook, founder, The TWI Network
“George Koenigsaecker’s story is an inspirational one. In this book, he captures succinctly over 20 years
of wisdom about how to lead Lean transformation. This should be compulsory reading for anyone with
a genuine interest in the topic.”
— david fillingham, chairman and CEO, Royal Bolton Hospital NHS Foundation Trust
“George Koenigsaecker hits a grand slam with Leading the Lean Enterprise Transformation, and the
operative word is ‘leading!’ A respected practitioner and sensei in the art and science of Lean, George
drives home the point that Lean is as natural in the touchy labor arena as it is in the intellectual labor
arena — and leadership is the key to success in both. George further adds value with his focus on Lean
in the context of (public and private sector) corporate governance. This is definitely a ‘must read!’”
— a.B. Morrill iii, Major General, USAF, Vice Director, Defense Logistics Agency
“Finally, a hands-on, real-world book written by someone who has actually led several Lean transforma-
tions. My only concern is that my competitors get their hands on this book.”
— Peter desloge, chairman and CEO, Watlow Corporation
Leading the
Lean Enterprise
Transformation
Second Edition
George
Koenigsaecker
CRC Press
Taylor & Francis Group
6000 Broken Sound Parkway NW, Suite 300
Boca Raton, FL 33487-2742
© 2013 by George Koenigsaecker
CRC Press is an imprint of Taylor & Francis Group, an Informa business
No claim to original U.S. Government works
Version Date: 20120824
International Standard Book Number-13: 978-1-4398-5988-9 (eBook - PDF)
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Contents
Preface to Second Edition .....................................................................ix
Acknowledgments ..............................................................................xiii
Introduction ..........................................................................................xv
The Author ...........................................................................................xxi
Chapter 1 My Journey of Lean Learning: Eleven Corporate
Transformations .................................................................1
Deere & Company .......................................................................1
Rockwell International ...............................................................3
Jake Brake (Danaher) ..................................................................4
HON Company ............................................................................7
Summary ......................................................................................8
Chapter 2 What Is Lean? .....................................................................9
What Toyota Does .......................................................................9
Two Pillars ..................................................................................10
Identifying and Removing Waste ...........................................10
A Problem-Identifying and Problem-Solving System ..........13
Six Sigma or Lean…or Both? ...................................................15
Summary ....................................................................................16
Notes ............................................................................................16
Chapter 3 Measurement Can Be Easy ..............................................17
Understanding Financial Measures: Personal Examples .....17
Toyota’s True North Metrics ....................................................18
How High Is High? ...................................................................20
The Four True North Metrics in Detail .................................26
Quality Improvement ...........................................................26
Delivery/Lead Time/Flow Improvement ...........................27
Cost/Productivity Improvement .......................................30
Human Development ...........................................................33
Linking the True North Metrics with Financial Measures ...35
Summary ....................................................................................37
Notes ............................................................................................38
v
vi • Contents
Chapter 4 Value Stream Analysis Provides the Improvement
Plan—And Kaizen Events Make It Happen....................39
Taking a Walk to Create an Initial-State VSA ......................40
Initial-State VSA and the True North Metrics .................41
Helping You See the Waste ..................................................41
Brainstorming to Create an Ideal-State Value Stream ........43
Creating a Future-State Value Stream ...................................44
Improvement Goals ..............................................................45
Work Plan and Responsibilities ..........................................45
The Rule of 5× ...........................................................................48
A Model Value Stream ..............................................................53
The Power of Weeklong Kaizen Events ..................................55
Summary ....................................................................................59
Notes ...........................................................................................60
Chapter 5 Tactical Organizational Practices ...................................61
The n/10 Rule ..............................................................................61
Designing Improvement Teams .............................................64
Key Event Failure Mode ..........................................................66
The 3 Percent Guideline ............................................................67
Selecting People for the Full-Time Improvement Team..69
Selecting the Leader for the Dedicated Lean Team .........70
The Watlow 3 Percent Experience ......................................71
Administrative Teams ..............................................................73
Redeployment ............................................................................75
Other Lean Training .................................................................77
Summary ....................................................................................78
Chapter 6 Strategic Organizational Practices ..................................79
Understanding Governance .....................................................79
Immersion .................................................................................80
Guiding Coalition .....................................................................81
Communication ........................................................................84
Lean Simulation ...................................................................84
Strategy Deployment ............................................................85
Antibodies .................................................................................88
Lean Year by Year .....................................................................90
Year One ................................................................................90
Contents • vii
Year Two .................................................................................91
Year Three ..............................................................................91
Year Four ................................................................................91
Summary ....................................................................................92
Chapter 7 Building a Lean Culture ..................................................93
Defining Culture .......................................................................94
The Building Blocks of Lean/Toyota Culture ........................95
Serve the Customer .............................................................96
Seek What’s Right, Regardless ............................................97
Decide Carefully, Implement Quickly ...............................97
Candidly Admit Imperfections ..........................................98
Speak Honestly and with Deep Respect ...........................99
Go, See, and Listen to Learn (Genchi Gembutsu) ............99
Deliver on Meaningful Challenges .................................100
Be a Mentor and a Role Model ..........................................101
The Action Plan .......................................................................101
Giving Your Leadership Team Personal Experience .....102
Daily Improvement ............................................................103
Challenging Your Team to Build Knowledge .................104
Summary ..................................................................................106
A Final Thought .......................................................................107
Author’s Note ...........................................................................108
Appendix A: A Lean Tutorial .......................................................................111
Appendix B: Building a Sustainable Lean Culture—The Watlow Way ....139
Appendix C: Watlow’s Enterprise Visual Management
System—Mission Control ......................................................159
Appendix D: The Origin of Simpler’s Transformation ContinuumSM ....173
Appendix E: Red River Army Depot—Accelerating Lean through
Leadership Immersion............................................................187
Appendix F: A New Product Design System That Uses Lean
Principles .................................................................................207
Appendix G: Autoliv—Empowered to Solve Problems ............................221
