《Integrating The Lean Enterprise》The soft stuff is the hard stuft"

People/Organizational Issues in the Lean Enterprise Professor Debbie Nightingale October 21. 2002

People/Organizational Issues in the Lean Enterprise Professor Debbie Nightingale October 21, 2002

The soft stuff is the hard stuff Chris Cool, VP, Lean Enterprise Northrop Grumman, ISS Sector Debbie Nightingale, MIT@ 2002

2 Debbie Nightingale, MIT © 2002 "The soft stuff is the hard stuff” -Chris Cool, VP, Lean Enterprise Northrop Grumman, ISS Sector

Issues in Lean Enterprise Implementation How to organize for lean Change management → Education → Training( re-training) Teams →G| obal/virtua| teams → Excess people → Metrics Debbie Nightingale, MIT@ 2002

3 Debbie Nightingale, MIT © 2002 Issues in Lean Enterprise Implementation ➥How to organize for lean ➥Change management ➥Education ➥Training (re-training) ➥Teams ➥Global/Virtual teams ➥Excess people ➥Metrics

Socioeconomic Drivers Globally rising and converging standard of living Increasing rate of technological change Environmental responsibility Profound increase in understanding of"needs < Customer ∈ Employees < Stockholders <Partners Debbie Nightingale, MIT@ 2002

4 Debbie Nightingale, MIT © 2002 Socioeconomic Drivers ➥Globally rising and converging standard of living ➥Increasing rate of technological change ➥Environmental responsibility ➥Profound increase in understanding of “needs” ÅCustomer ÅEmployees ÅStockholders ÅPartners

Changing Roles of the Enterprise, the Individual the Community Leading edge companies will succeed even if a State or Nation does not The Leading Edge Corporation will be an opportunist that capitalizes on the competitive resources provided by the individual and the community Sustained access to these resources will require a company to be a proactive partner with the community and the individual Debbie Nightingale, MIT@2002 Source: Next Generation Mfg, 1997

5 Debbie Nightingale, MIT © 2002 Changing Roles of the Enterprise, the Individual & the Community ➥ Leading edge companies will succeed even if a State or Nation does not ➥ The Leading Edge Corporation will be an opportunist that capitalizes on the competitive resources provided by the individual and the community ➥ Sustained access to these resources will require a company to be a proactive partner with the community and the individual Source: Next Generation Mfg., 1997

A Premise It is not the physical facilities but the organizational capability that will differentiate success from failure of the enterprise Source: Gerhardt Schulmeyer, President, ABB-North America Debbie Nightingale, MIT@2002

6 Debbie Nightingale, MIT © 2002 Source : Gerhardt Schulmeyer, President, ABB-North America A Premise " It is not the physical facilities but the organizational capability that will differentiate success from failure of the enterprise !

Human Resource shifts From To Perform task Perform task provide knowledge Reward for doing Reward learning and doing Skills life equal to career life Skills obsolescence at 20% per year Training as 1% of payroll Training as 7% of payroll Individual treated as cost Individual viewed as asset imit human potential Maximize human potential Debbie Nightingale, MIT@2002 Source: Next Generation Mfg, 1997

7 Debbie Nightingale, MIT © 2002 Human Resource Shifts Perform task Reward for doing Skills life equal to career life Training as 1% of payroll Individual treated as cost Limit human potential Perform task & provide knowledge Reward learning and doing Skills obsolescence at 20% per year Training as 7% of payroll Individual viewed as asset Maximize human potential From To Source: Next Generation Mfg., 1997

Shifts Required to Support Teaming partnering as a Core Competency From To Physically control core Control the knowledge of core competencies competencies Reward individual contribution Reward individual contribution and team success Transfer knowledge within team Transfer of knowledge between teams Single decision style: hierarchy Multiple decision styles: hierarchy, team, empowered Material supply chain Knowledge supply chain Debbie Nightingale, MIT@2002 Source: Next Generation Mfg, 1997

8 Debbie Nightingale, MIT © 2002 Shifts Required to Support Teaming & Partnering as a Core Competency Physically control core competencies From To Reward individual contribution Transfer knowledge within team Single decision style: hierarchy Material supply chain Control the knowledge of core competencies Reward individual contribution and team success Transfer of knowledge between teams Multiple decision styles: hierarchy, team, empowered Knowledge supply chain Source: Next Generation Mfg., 1997

Knowledge Supply Chain Treat knowledge as a commodity Treat the knowledge process as an integrated supply Utilize the core competencies of industry and academia Apply the principles of supply chain management Debbie Nightingale, MIT@ 2002

9 Debbie Nightingale, MIT © 2002 Knowledge Supply Chain ➥Treat knowledge as a commodity ➥Treat the knowledge process as an integrated supply ➥Utilize the core competencies of industry and academia ➥Apply the principles of supply chain management

Requirements for Competitive Excellence Knowledge Knowledge Generation Transfer New technical behavioral New knowledge University discoveries that result converted into new in new technologies teachings, new talent new principles Continuously educated Leading-edge product employee using latest Industry and process platforms knowledge for effective that satisfy customer execution of technical needs management process Debbie Nightingale, MIT@ 2002

10 Debbie Nightingale, MIT © 2002 Requirements for Competitive Excellence New technical & behavioral discoveries that result in new technologies, new principles University New knowledge converted into new teachings, new talent Industry Continuously educated employee using latest knowledge for effective execution of technical & management process Leading-edge product and process platforms that satisfy customer needs Knowledge Generation Knowledge Transfer