- Toyota has a very different culture than anybody else, certainly different from us.
- We simply don’t have the time or patience for a bottoms-up approach to Lean.
- Don’t underestimate the costs of all that change – we simply don’t have the budget.
- Ford and GM’s scale is way beyond us – not comparable.
- They developed very specialized versions of Lean that were meant for UAW shops.
- We are OK as we are now – my guess is that there’s not really much difference in our productivity compared to their average.
- I don’t trust the metrics – this is apples and oranges.
- We are different.
- Based on my metrics, we are already best-in-class.
- Yeah, well, we are already doing all that stuff and we are Lean right now.
The colored lines represent VW’s North American parts warehouses; the dotted black line (barely visible) is the average productivity of all VW’s NA PDCs. Starting in 2004, VW initiated a march from its comfortable home in the bottom quintiles to 2007, when it reported all warehouses in the top quintile. In 2006 it missed by a nose in having all 7 facilities in the top quintile. VW’s ride to best-in-class has been rapid, steady, sustainable, and, most importantly, capable of emulation. How did they do it? I talked with Jack McEowen to find out.
Of all the Lean operations we have closely examined at NASPC, VW’s is the most relevant and interesting. First off, we all saw it unfolding year-by-year at the conference – the march to best-in-class could not be ignored. VWGoA is not GM, Ford, or Mopar – not massive in scope with specialized labor requirements. It was not a Toyota company, yet it had reached a level of productivity comparable to Toyota. It did not spend fat wads of cash to become lean. It did not immerse itself in years of cultural training and outfit its folks in dojo attire to simply start its Lean journey. Jack described VW’s journey in roughly 4 steps/phases:
- The Vice President of Service-Parts became committed to business system evolution and standardization based on a massive global SAP implementation effort. He was also quite savvy and paid attention to where VW was vs. others in terms of productivity metrics. The challenge to his team was to evolve, or be evolved by others. The numbers, in comparison to others in the industry, told a convincing story that change was a comin’.
- The big-bang improvements came from implementing standardized business processes and systems. The excuse for this was SAP – but, ultimately it was just an excuse. GM’s excuses were their “Template Warehouses”, Ford’s excuse was DPA – bottom line is that mostly it is an “excuse” that matters, not what the excuse is. Others have standardized business processes based on other momentum generating events. Standardizing on better, but still sub-optimal methods and processes gave VW huge gains in productivity. Implementing these under a commitment to a metrics-driven Lean culture leads you on the journey to excellence and improvement. The Big bang within a metrics-driven Lean culture that focused on individual accountability of results got VW within reach of the First Quintile.
- Enterprise improvement came from a simple adoption of Continuous Improvement (CI) processes. Jack had worked with Lean at 5 previous employers. Jack’s focus was on inventory and Troy Smith’s focus was on warehousing. Jack described Continuous Improvement at VW. “It came down to a matter of finding a way of making the changes we needed to make. I was familiar with 6-Sigma, Kaizen, Cycle Takt time … , but we needed to find an easier way to get there without spending a year of up-front time in training and non-productive work. I could not translate the number of black belts we might have in a facility into LHY productivity improvements.” So, they went simple, fast, and inexpensive. This step got them into the First Quintile and is keeping them there.
- Sustainability is VW’s challenge for the future. As would be expected, VW’s CI efforts have sliced and diced work processes and made them fairly VW-unique. This limits their ability to quickly cope with growth – external hires cannot come aboard and immediately start contributing. They need to be trained and indoctrinated into the new VW Lean Culture.