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The Lean Benchmark Report

Chapter Four: Recommendations for Action

Key Takeaways

  • Lean Six Sigma programs are setting ever more stringent benchmarks against which all companies should measure themselves.

  • Laggards should start by mapping their value stream beginning with the customer back to the supplier, improve workplace organization, implement appropriate Lean techniques and pilot; prove results and look for new opportunities.

  • Industry average companies should create a culture of Lean, implement a total produc- tive maintenance (TPM) program; conduct Kaizen Blitz Workshops.

  • Best-in-class organizations should balance long-term strategy and short-term results, im- prove supplier collaboration, and prepare for more frequent and stringent product launches.

D uring the course of this research study, we spoke to a number of companies that achieved tremendous business results by committing to Lean. Best-in-class com- panies are driving Lean techniques and culture across manufacturing and into their supply chains by building strong leadership teams and demanding organizational commitment. Market leaders such as Honeywell and Rockwell have further strengthened their Lean initiatives by incorporating Six Sigma expertise and disciplines into their in- dustry leading Lean Six Sigma initiatives. Lean does not directly enable specific proc- esses and Six Sigma by itself does not organize processes into a synchronized flow; how- ever, Lean and Six Sigma combined provide a strong foundation from which unique and differentiating processes enable companies to achieve competitive advantage.

Lean Six Sigma strives for perfection across the entire value chain. Its intent is to con- tinuously establish and achieve ever higher levels of performance. During this study, re- spondents were asked about the performance goals they set for their organizations. Even companies classified as best-in-class in this study (the top 20% of respondents) reported achievements in the range of 90-94% (Figure 11). For many industry sectors, these re- sults are substantially lower than industry leaders. For instance, a target order fill rate of 93.66% is well below acceptable performance thresholds in a number of sectors, most notably automotive, electronics, and consumer goods, which often demand between 98%-100%. In terms of the target yield metrics, meeting a target of 90.23% would result in close to 10% of factory time and resources wasted by producing unwanted product. Finally, if a company achieves a 90.47% delivery rate, that would result in customers receiving orders on time in only one out of every ten shipments.

Will meeting the goals shown in Figure 11 enable your company to successfully compete in today’s global market tomorrow or in the years to come?

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