By September 10, 2006 9 Comments Read More →

GE Can Really Help Spread Lean

IndustryWeek : Driving Incremental Value Through Lean Six Sigma

GE did so much to help popularize Six Sigma, will they do the same for Lean? As a lean guy, I hope GE is incredibly successful with their lean efforts – it will give the Wall Street Journal and Business Week something positive to write about lean, other than Toyota. Instead of “Just in Time Supply Chains are Risky” articles, the media can write about GE’s lean success. That would help us all, wouldn’t it?

Even with the problems I had with getting refrigerator service scheduled, I’ll hold out hope that GE can get lean right.

GE’s definition of Lean:

GE, an early adopter of Six Sigma, has been working to combine Six Sigma’s core principles with that of Lean, a methodology focused on waste reduction (as opposed to defect reduction). GE’s hybrid approach to Lean Six Sigma is in part based on the venerable Toyota Production System (TPS), which seeks to compress the timeline from order receipt to payment received by removing waste. GE’s Lean Six Sigma mode is guided by four key principles:

  1. Define what the customer perceives as value in the product or service.
  2. Map the value stream of all steps (value and non-value added).
  3. Establish the flow of products, services and related knowledge from supplier to customer.
  4. Continuously improve the process to perfection

The article, written by GE people, uses Toyota and Dell as examples of “floor efficiency.” I guess they are aluding to Dell also being “lean,” like Toyota, but if you’ve been reading my blog for a while, you know how I feel about that.

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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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9 Comments on "GE Can Really Help Spread Lean"

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  1. Mark Edmondson, Lean Affiliates says:

    Dear Mark,

    I too hope that GE’s emphasis on lean will have a positive effect.

    But I’m not optimistic. GE’s practice of ranking employees followed with systematic layoffs is just not consistent with lean. See the article, “The ABCs of Rank of Fire Management“, which takes a look at this practice and how it stymies the cornerstone of lean: teamwork and everyone actively engaged with CI.

    Indeed, I fear that GE’s influence may further confuse the true philosophy of lean.

  2. Mark Graban says:

    Mark, I applaud you for raising that point. We have to hope that GE realizes that Lean is more than the elimination of waste. Rank and yank has never sounded like it was high on the “respect for people” scale, the other main component of TPS.

    Still, even if GE doesn’t have it “completely right”, I think it still has the potential for good — what’s the old saying about there’s no such thing as bad publicity?

    Part of me fears that GE will give lean a bad name, but there are enough primary sources for folks to read — the great Toyota Way and Toyota Way Fieldbook series, Jim Womack, Norm Bodek, and others who would make sure everyone understands “true lean.”

  3. Mark Edmondson, Lean Affiliates says:

    Maybe GE will change – at least that what the Fortune/Money article, “Tearing up the Jack Welch playbook” suggests.

    Do you also sense that American management philosophy is beginning to move past Welsh?

  4. Anonymous says:

    Not knowing anything about GE’s current cultre, won’t Lean Six Sigma just be another tool? It seems that it would take an overbearing CEO like Jack W. to really change the culture like he did with Six Sigma.

    How else does culture change at very large corporations?

    Mark, you have many good examples of lean in your blog. What are the textbook, other than Toyota, of large corporations that have made a transformation to lean?

  5. Mark Graban says:

    To the last comment — that’s a great question, and one I’ll pose to the blog.

    There are a lot of large companies that have done lean things — look at the list of Shingo Prize winners. But, that doesn’t mean they’ve transformed their culture.

    It’s far easier to find examples of culture change and lean success stories at smaller, private companies. That’s probably no surprise. It’s got to be easier to change a smaller organization. If Mulally can change the Ford culture, he deserves 10x the $30M package he’ll be getting paid.

    What are some big company examples — Danaher, Wiremold (but I heard they went downhill), what are the others?

  6. JWDT says:

    Anon,

    That is the current path GE is on, LS6 is just another tool in their toolbox is how it is being rolled out, just like CAP, Six Sigma & Work Out.

    I agree about the only way a Culture at a large corporation changes are by the real authoritarian types who have driven accountability. From what I have read Ohno was not an armchair QB, more like an on field player/coach.

    A lot of Lean Transformation examples out their but are they really on the path, I know Bobcat (division of Ingersol Rand) was on the path, Altec (privately held company), one in Healthcare that seems to be on the Path is Virginia Mason, where the entire leadership team spent several weeks in Japan learning the Toyota Production System from Nakao (Shingijutsu Consultant).

  7. Mark Graban says:

    I thought GE was a “Six Sigma Culture”, but today’s WSJ suggests otherwise, in an article about CEO Immelt:

    “Today, GE is beginning to look less like his predecessor’s company and more like his own.

    It’s more focused on increasing revenue through new technology. Mr. Immelt stresses marketing and customers while pulling back on some internal processes, such as the Six Sigma quality program.”

    Program? Pulling back? Would the same eventually happen with lean?

  8. JWDT says:

    I am not so optimistic. LEAN at GE will fail overall (pockets will remain, but they are just pockets) and in some ways will give its critics more ammo to say what they will.

    Here is what I saw as a GE six sigma black belt & LEAN Leader for two years 2004-2006.

    Leadership that wanted LEAN training neatly packaged into a two or three week course (i.e. they are missing the boat that it requires a continuous learning environment).

    Leadership that wanted LEAN to be ‘just’ another Tool, like Six Sigma.

    Six Sigma people that despise and view LEAN as a competitor.

    Leaderships inability or want to actually fix broken processes due to amount of capital required.

    The Financial Leaderships inability to over look short term gains for Long Term longevity. For any of you that worked in GE you know how the short term objectives ultimately drive your thoughts.

    The Human Resources Leadership of double speak, value employees versus Valued Employees. The Model revolves around the entire Rack & Stack, with High Pots moving on to a new position every 2 years or so, irregardless of what Immelt tells the outside & inside world.

  9. Anonymous says:

    I sympathise with JWDT's comment, but with the benefit of a few more years (all as a practicing master black belt)I can assure readers that this ain't the case. Lean is delivering well for GE, and if anything we've been slow to get over the awe of Lean and understand its place alongside other change management techniques. Our best change managers now seemlessly match their current challenge to the appropriate learnings from CAP, Six Sigma, Lean and good ole common sense. Lean is great but its not the be-all, go look at Healthcare if you don't believe me. Sorry to be anonymous I'm in a rush – insert your joke here!

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