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Friday, August 26, 2011

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Innovation & Lean Management

Innovation and Lean management often contradict each other. However, it is constant innovation in products, processes, equipments & tools that sustains and improves the planning and implementation of Lean management. This strange anomaly is something; the present day management has learned to live with.

 The choice is between discouraged Lean management or discouraged Innovation. How much of each is needed is largely dependent on organizations economic health, market realities, and strategic positioning, growth planning and the segment to which the organization caters.

Certain manufacturing sectors like Pharmaceuticals, Consumer Durables, Automobiles, need to have a correct mixture of Innovation, and Lean Management and prevent one from interfering with other.

Role of support systems

The temptation to term the internal support systems (ISS) as discretionary expenses is great but not correct. The ISS are the internal vendors, and the processes to which they cater are the internal customers. These are organizations within the organization. ISS are in fact value creating organizations within the organization. These need to be aligned to the processes they support through strategy maps and Balance Score Cards. We need to put in place robust processes, relationships and tools to establish and sustain a perfect synch with the corporate units.



Hoshin’s planning:

Hoshin Planning is a management tool used to identify and close “gaps.” The difference between where you are and where you want to be can be and is thought of here, as a gap. Yet some gaps are more strategically important than others. Using these Key Performance Indicators (KPI’s), is the job of management to steer the focus of their organization towards those few vital priorities that will keep or bring the organization into alignment with the demands of its markets. Once these are identified, employees can then pinpoint the group, division, factory, department, or project gaps that must be closed to stay aligned with the strategic direction of your organization.

These “vital few priorities” are actually called “Hoshins.” A key principle of Hoshin Planning is to deploy and track only a few priorities at each level of the organization. Given all of the rapid changes and increasing distractions organizations face today, individuals must be able to focus on those things that offer the greatest advantage to the organization. The clearer the priorities, the easier it will be for people to focus their energies on what really counts. How often has your company made dramatic improvements in a product or process that suddenly became obsolete due to the lack of these communication tools?

These can be demonstrated by the following images: