Lean 2.

0
Strategy

Lean 2.0
Foundation Strengthening
Key objectives of the session
• Reflect on current Lean journey
• Identify what's new in Lean 2.0
• Identify why Lean 2.0 is beneficial
• Establish key Lean 2.0 concepts
Reflection of journey thus far

What went right?

What went wrong?

What could have been better?

Why Lean 2.0?
• Strategic Imperative
• “Embrace the past as we built the future “
• Labor challenges
• Lean to change business model and develop holistic
manufacturing system- system thinking

• Process
• People
• Purpose
• Leadership
• Basic Principles
What is LEAN 2.0

FROM TO
Leadership Leadership

Ownership

Engagement
People People
Flow +
Automation
Process Process
Lean Pathway
LEAN 2.0
You are here
CHALLENGE FOUNDATION
EQUITABLE MFG PILOT
STRENGTHENING
in transition
Through innovations • Data & financial modeling
in worker wellbeing & • Lean/HRM ( built on current process )
performance, how do • Team member engagement New Learning
we support Nike’s & mindset change Apply EM learnings on Leadership
CHALLENGE & People across current Lean
strategic growth • Compensation & benefits
agenda? • New venture approach to capture value now
How can Lean
unlock value to
LEAN 2.0
SCALING
support Nike’s 2020 PROTOTYPING
CHALLENGE NOS growth and ( L+P ) + Reinforced Process*
Changes in landscape • Implement stability/flow/pull
innovation agenda? * Reinforced =
drive the need to Optimization of Flow + ‘Right’ Automation
• Proliferation through Reflections
change the way Nike
compliance: NOS Line Create Reinforced Process
manufactures product
Definition/LAT enhanced with Leadership &
and delivers to the
People
marketplace. • Tools and training focused

Capability NOS Foundation Strengthening

• Lean 2.0 Boot camp
Development • NOS Core and Mastery programs
Prototyping
• With LED/LIM coaching • Learn by doing
LEAN PLAYBOOK
STRUCTURE

STRUCTURE
40%
INTRODUCTION
LEAN FUNDAMENTALS PURPOSE
KEY CONCEPTS
» Creating Stability
» Material & Information Flow
» Built in Quality
» Continuous Improvement Mindset
» LEAN Culture
60% VALIDATION
» NOS Line Definition
» LEAN Assessment Tool (LAT)
LEAN 2.0

REFLECTIONS AND NEW LEARNING

MANAGEMENT APPROACH
HRM FOUNDATIONAL ELEMENTS FOR LEAN 2.0
KEY CONCEPTS
» Leadership Engagement
» People Engagement
» Roadmap Development
» Execution
» Sustaining the Gains
MODERNIZATION CENTER
THE ECOSYSTEM

LEADERSHIP

LEAN MANAGEMENT SYSTEM

PEOPLE
WORKFORCE OF THE FUTURE

CULTURE OF SAFETY

PROCESS
LEAN MANAGEMENT SYSTEM DRAFT
FRAMEWORK AT MC

PURPOSE:
Lean 2.0 enables excellence through
revolutionized and sustainable* world class
manufacturing

PEOPLE PROCESS
LEADERSHIP IMPROVEMENT
ENGAGEMENT ACCOUNTABILITY

Employees at all levels are Processes are

Leaders use Lean
capable and engaged predictable and agile
Management System to
drive business performance

* Lean, Green,
Equitable & SAFE INCLUSIVE PROFITABLE SCALABLE FLEXIBLE
Empowered
FULL POTENTIAL MODEL

LEADERSHIP PEOPLE PROCESS

MACHINES INFORMATION

MATERIALS

Unlocking continuous improvement that supports

profitable business growth in a stable and agile environment

ENABLERS

LEAN HRM HSE

Management System Workforce of The Future Culture of Safety
 LEAN MANAGEMENT SYSTEM
ENABLERS
LEADERSHIP
GM – Value Stream Manager
Lean Leadership
» Hoshin kanri
» Lean leader development workshop*
» Leader standard work*
Human Resources Management
» HRM org structure capability,
systems and accountability for
capability development system
» Strategic People Development Value
Stream System in alignment with
Generic Lean Behaviors
Culture of Safety
» Risk analysis for facility changes
» Risk analysis for natural events
ENABLERS
PEOPLE PROCESS
Group Leader – Team Member MACHINES MATERIALS INFORMATION
Shop Floor Production System Reliability, Safety & Material Parts and Data Management System
Daily Frequency Maintainability (R&M) Logistics » CMMS (Maintenance
» Short interval control Machine Development » Planning logistics Management System)
» Standardized work / job instruction » R&M system » Heijunka leveling – » Production line control
training » Design for QCO, error- vol. x mix x seq. (BTS) system (data base)
» 5S proofing, run at rate » External logistics » Interlocked andon system
» Practical problem solving » Life cycle maintenance » Internal logistics » Interlocked machine PLC
» Machine deployment:  Supermarket FIFO systems
Variable Frequency training, commission, and » Live visual management –
» Skills development* (up-skilling,  Fixed material
problem mitigation real time performance
multi-skilling, relief team, etc.) handling routes data visual display
 Plan for every part
» EWB Survey*
» Supervisor skills assessment* Total Productive Maintenance
» Kaizen – production and non- System Lean Layout Design
production (well-being)* issues » In Production » 3P
» Suggestion system* » Autonomous (workers)
» Lean design guidelines
» Quality and safety circles* » Preventive (maint.) » M&I flow
» Productive/predictive
(Maint/Eng.)
* Learning from Equitable Mfg. pilots
LEAN 2.0 PROTOTYPING &
FOUNDATION STRENGTHENING
MANUAL PROTOTYPING
MODERNIZATION PROTOTYPING
(Transition Line)
(LEADERSHIP + PEOPLE + PROCESS)
(LEADERSHIP + PEOPLE + PROCESS)

Foundation Strengthening Foundation Strengthening

+ +
Optimize (flow) before Automate Optimize (flow) given Automation
3 Factories (2 in VN, 1 ID) 7 Modernization Centers (5 in CN, 2 in VN)

S. America
FOUNDATION STRENGTHENING
(LEADERSHIP + PEOPLE)

Enhance current Lean approach by incorporating learning from

Equitable Manufacturing Pilots with respect to Leadership and People
13 Factories (10 AP, 2 FW, 1 Converse)
Historical Houses
The Toyota of Lean-TPS
Production System 1976

Highest Quality - Lowest Cost - Shortest Lead Time

Through Shortening the Production Flow By Eliminating Waste

Just in Time Jidoka

“The right part
“Built-in Quality”
at the right time
in the right amount”

Production Lines
HEIJUNKA That Stop for
Abnormalities

Stability and Kaizen

House of Lean- Toyota way 2001
The Toyota Way
Customer First

Continuous RESPECT
Improvement For
PEOPLE

Challenge – Kaizen – Genchi Genbutsu

Respect - Teamwork
Historical Houses of Lean-NOS

Nike NOS (Lean 1.0) Original 2004.

Second Edition (Model displayed above) 2011
Lean Transformation Model
Lean Transformation (LEI 2014)
Model
SITUATIONAL APPROACH
- Value-Driven PURPOSE -
“WHAT PROBLEM ARE WE TRYING TO SOLVE?”
Accountable
LEADERSHIP
PROCESS PEOPLE
IMPROVEMENT CAPABILITY
DEVELOPMENT
Continuous,
real, practical Sustainable
changes to improvement
improve the way capability
the work is done in all people
MANAGEMENT
SYSTEM at all levels

Basic Thinking, Mindset, Underlying Assumptions

That drive this transformation
(What does this need to look like?)
Why this Framework for Lean 2.0- Transformational
Fundamentals
1. The Purpose must be clearly defined. This would be the Business Case –
Why Lean 2.0? How Lean 2.0 fits into the bigger Nike picture. “What
problem are we trying to solve?”

2. The model incorporates the already developed People, Process,

Leadership aspects of Lean 2.0.

3. The countermeasures for the EM Pilot were appropriate for those

factories at that point in time. The risk is a “cut and paste” approach

4. At the base of the model lies “Underlying Assumptions”

• Need to define the expected outcomes very clearly. This prevents variability of
mindset at leadership level as we proliferate. Could also be framed “Lean 2.0 Guiding
Principles.”
Provides a framework to Align:
•Leadership
•Process
•People to create value
•Purpose
The 5 Transformation Questions
1. What is our purpose or what problem are we trying to solve,
what value to create?
2. How do we improve the actual work?
3. How do we develop the people?
4. What role must leadership take and how does the management
system support the new way of working?
5. What basic thinking underlie this Transformation?
The 5 Transformation Questions
1. What is our purpose or what problem are we trying to solve,
what value to create?
2. How do we improve the actual work?
3. How do we develop the people?
4. What role must leadership take and how does the management
system support the new way of working?
5. What basic thinking or assumptions underlie this
Transformation?
Transformation Questions
What is our purpose or
what problem are we
“What is our trying to solve, what
True North?” value to create?
What Problem are We Trying to Solve?

Okay, so that’s where we need to go…

“Which way to True

North?”
Transformation Questions
1. What is our purpose or what problem are we trying to solve,
what value to create?
- What is the Business Case?
- How is Lean 2.0 part of the overall Nike Business Plan?
- Why is Lean 2.0 part of the business plan?

Key Point: This needs to be clearly defined up front to ensure there is a common
understanding and alignment why we are embarking on the Lean 2.0 journey.
The 5 Transformation Questions
1. What is our purpose or what problem are we trying to solve,
what value to create?
2. How do we improve the actual work?
3. How do we develop the people?
4. What role must leadership take and how does the management
system support the new way of working?
5. What basic thinking or assumptions underlie this
Transformation?
 What is our purpose or
what problem are we
WHAT trying to solve, what
is our value to create?
PURPOSE?

What situational problem

do we need to address?
How to
improve
the work?
2. Process Improvement…
(Now that we understand the Business Case)
What is the work to be done
in order to get there…?
Process Improvement at ALL Levels

Macro Group Level

Factory / Value Stream Level

Group, Cell, Machine, Process

Micro Level of Each Individual Job

Process- Focus Areas
Process - Machines
• Reliability, safety and maintainability
• Machine Improvement: Reliability &
maintainability
• Predictability: Integrating the concepts of
reliability, maintainability and availability
• Machine safety

• Total productive maintenance

• Zero unscheduled downtime
• No loss due to equipment malfunction
• Create a partnership between Production and
Maintenance through shared TPM responsibility
• Preventive work, not reactive work
Process- Focus Areas
Process – Materials

• Material parts and logistics

An Integrated lean value chain
• Small, frequent parts and material shipments
Machine safety
• Scheduling that provide stability
• Product to be built to customer demands
• Reducing variability to help eliminate waste
• Increasing the ability to adjust and respond

• Lean Layout design

• Design or modification supporting logistics according
to Lean Principles
• Highest Quality Product
• Lowest Total Cost
• Shortest Lead time
• Flexibility to change
• Respect for people
Process- Focus Areas
Process – Information

• Data management system

• Provide accurate, real-time data for decision
making
• Optimization of preventative maintenance
• Extend life cycle performance
• ANDON and visual management
The 5 Transformation Questions
1. What is our purpose or what problem are we trying to solve,
what value to create?
2. How do we improve the actual work?
3. How do we develop the people?
4. What role must leadership take and how does the management
system support the new way of working?
5. What basic thinking or assumptions underlie this
Transformation?
 What is our purpose or
what problem are we
trying to solve, what
value to create?

How to
How to improve
develop the work?
the people?
3. People Capability Building…

What skills do we need to get the work

done…?
People Capability Building

Build processes that develop people as they

do their work.
Manage and lead accordingly.

PDCA
LEARNING CYCLES
t
Lean 2.0
– the ultimate “social-technical system”

• The process of doing the work is integrated with the process of

improving the work, and
• The operating processes ARE people development processes

PDCA
t
LEARNING CYCLES
People- Focus Areas

• Shop floor production system

• End to end visual management

• Waste elimination
• Prevent problem re-occurrence

• Environment that encourage employee

engagement & development
The 5 Transformation Questions
1. What is our purpose or what problem are we trying to solve,
what value to create?
2. How do we improve the actual work?
3. How do we develop the people?
4. What role must leadership take and how does the
management system support the new way of working?
5. What basic thinking or assumptions underlie this
Transformation?
 What is our purpose or
What leadership behavior what problem are we
and management system trying to solve, what
do we need? value to create?

How to How to
develop improve
the people? the work?
4. Management, Leadership…

How will we manage the work?

What role must leaders take??
Lean Leaders Aim for Two Things
• Enable each person to take
responsibility to solve problems and
improve his or her work
• Align each persons’ work to provide
value for the customer and
prosperity for the organization

Get the work done and Develop Capability

- at the SAME TIME!

 Lean Leadership Begins with Self Development!

Leadership- Focus Areas
• Lean Leadership
• Commit to Self Development
• Coach and Develop Others
• Support Daily Kaizen
• Create Vision and Align Goals

• Human resource management

• Organizational Supporting Processes
• Coach and Develop Others
• Support Daily Kaizen
• Create and Communicate Vision and Align Goals

• Culture of safety
• Health & Safety Management System
• Understand International Building Code
Requirements
• Risk Analysis
Transformation Questions
1. What is our purpose or what problem are we trying to solve,
what value to create?
2. How do we improve the actual work?
3. How do we develop the people?
4. What role must leadership take and how does the management
system support the new way of working?
5. What basic thinking or assumptions underlie this
transformation?
 What is our purpose or
What leadership behavior what problem are we
and management system trying to solve, what value
do we need? to create?

How to How to
develop improve
the people? the work?

What is our basic

thinking?
5. What basic thinking underlies all this…?

Does this really make sense to

everyone???

What mindset do we have?

Do we need?
What underlying assumptions?
What are we trying to achieve?
What basic thinking underlies all this…?
This should be clearly defined by the leadership.
Some Examples are as follows;
1. Our work force are our most important asset
2. A valued workforce equals better business
3. Capable Team Members on all processes at all times
is the standard
4. All problems (both Production and non-production)
can be solved
5. Problem solving capability and engagement at all
levels at all times.
6. Leadership is accountable to develop the capability of
their people
Recollection and Reflection….
Questions……

Framework developed along with :

Tony McNaughton
Nike Lean Master Coach
Vietnam
Email: Tony.McNaughton@nike.com

Materials and the Lean Transformation Model Concept developed by Lean Enterprise Institute
Boston, MA
www.lean.org
Exercise
Transformation Dimension 1-5 Questions
1. Purpose - What is the purpose or what problem are What are the goals and aspirations of the organization?
you trying to solve? Are the goals of you and the organization aligned?
Is Lean a Vehicle/Means to achieve strategy/goals?
2. Process Improvement - How are you improving the Is there a drive for waste elimination at all levels?
actual value-creating work? What is the process available for systematic waste elimination at
all levels?
What is the process for ensuring standardization and
improvement (problem solving and Kaizen)?
3. Team Member Capability Development and Is there a development plan for everyone in the organization?
Engagement - How are you developing capability to work What role does HR play in this aspect?
in new ways? Is there problem solving at all levels?
Are the team engaged to carry out continuous improvement?
4. Leadership and Management System - What leadership Does our leaders go and see and get involved in implementing
behaviors and management systems are required? kaizen?
Are they coaching mentoring or firefighting/ delegating?
Are they committing for lean and lean leadership development?
5. Philosophy, Basic Thinking, Underlying Assumptions - What is our basic thinking on lean?
What basic assumptions or mindset underlies this Do we believe in problem solving at all levels?
change? Do we believe in continuous improvement?
Who are you as a company? Do we exercise respect for people?
Life of a Team Member - Reflection
Life of a Team Member - Reflection