The Remedy

Winner of the Shingo Prize for Excellence in Quality Improvement

-From the Shingo judges:

This work has an extremely widespread application as the tools, techniques, and methods described are at a level that achieves the goals of Lean and operational excellence without tying them down to a specific industry or work stream. The book provides practical knowledge for lean champions, managers, and executives driving toward operational excellence enterprise-wide. The story format, and the presentation of this material was excellent, and the avoidance of lean and operational excellence jargon gives the book a wide appeal…it is a pleasure to read.

The Sequel to the Influential “Lean” Business Novel Andy & Me

The Remedy is a compelling a business fable that shows how Lean quality improvement business practices—traditionally associated with manufacturing--can dramatically improve the service areas of your business-including design, engineering, sales, marketing and all processes in between.

Written by Pascal Dennis, a leading Lean consultant, the story follows Tom Pappas and Rachel Armstrong, senior leaders at a desperate automotive company as they try to implement a Lean management system across an entire platform, the Chloe, a breakthrough "green" car. The future of the company is at stake. Can Tom and Rachel, supported by Andy Saito, a retired, reclusive Toyota executive, regain the trust and respect of the customer? Can a venerable but dying company implement Lean practices to every part of their business and learn a new, more effective way of managing?

• Shows you how to use the Lean quality improvement method to fix not just a manufacturing system, but an entire company, including management, design, marketing, and supply chain
• Written by Pascal Dennis, author of four books on Lean practices and winner of the coveted Shingo Prize for outstanding research contributing to operational excellence
• Originally developed by Toyota, the Lean approach to quality improvement has gained a worldwide following and helped turn around enumerable struggling businesses

Acknowledgments xi

About the Author xiii

Preface xv

1 Motor City Sadness 1

Overview of Lean fundamentals

How Lean looks different in white-collar environments vs. the factory

Waste in health care and the restaurant business

2 Lotus Land 19

The nature of big companies

Big Company Disease

Obstacles to transforming big companies

Role of the Shusa

3 What Have I Learned? 37

Lean fundamentals

Lean thinking—core mental models

Waste in business processes

Introduction to problem solving

Nature of transformation

4 How Will We Change Their Thinking? 67

Reflections on how to deepen and extend mental models

The nature of value and waste in knowledge work

Grasping the situation by going to see for yourself

Basics of system thinking

5 Focus and Alignment—When You’re a Jet, You’re a Jet 85

Fundamentals of strategy deployment

Defining True North, our strategic and philosophical objective

How strategy making actually works in organizations

How the New York Jets might apply strategy deployment

6 Cluing into Chloe 103

Politics in large organizations

Creating a shared vision

Strategy deployment in action

Deploying targets and tactics through Catchball

7 A Trip to Boston to Dispel the Fog 121

Role of the leader

The Water Ring model

How complex systems fail—and succeed

The Four Rules—Standards, Connections, Pathways, Improvement

The Remedy to Big Company Disease

8 Marketing—Leaning Out the Mad Men 137

Marketing basics

Mental models in marketing

Waste and value in marketing

Yamazume

Takt, flow, and pull in Marketing

Expected, Specified, and Delightful Value

9 Design and Engineering—Making Knowledge Flow 157

Mental models in Design

Value and waste in Design and Engineering

Production physics—implications for Design

Small batch learning

Takt, flow, and pull in Design

Set-based concurrent engineering

10 Nick Papas Falls into the Abyss 173

Mental models in health care

Value and waste in health care

Lean fundamentals in health care

Our health-care mess—root cause and countermeasures

The Four Capabilities

The remedy to Big Company Disease—reprise

11 My Beautiful Mind—Leaning Out Our Supply Chain 187

Mental models in supply chain

The Nash equilibrium

The importance of information flow

The Groundhog Day effect

The bullwhip effect—causes and countermeasures

What is heijunka?

Process and system kaizen

12 Dealers, Spielers, and Concealers 205

Mental models in retail

Principles of Lean provision

Provision/consumption maps

Politics in large organizations

Financial aspects of Lean

Possible effects of standard cost accounting

Lean in Human Resources

13 Scylla and Charybdis 225

Politics in large organizations

14 Be My Phenomena 235

Nature of transformation

Ethics

The cardinal virtues

Lean leadership

Glossary 247

References 251

PASCAL DENNIS is the President of Lean Pathways Inc., a successful international consultancy, and the author of three previous books on Lean management, all of which have won the coveted Shingo Prize for outstanding research in the field of operational excellence. His clients include Fortune 500 companies like Kimberly- Clark, Lockheed Martin, and Magna International, as well as leading health care, construction, and financial services firms. Dennis learned the Toyota Business System in leadership positions at Toyota Cambridge, one of Toyota’s best plants, and has worked with leading Toyota senseis in North America and Japan.

Are you wondering how to do more with less by pushing “Lean thinking” beyond manufacturing into every area of your company? Meet Tom Papas, the hero of Pascal Dennis’s enlightening Lean business novel The Remedy. As plant manager for New Jersey Motors Manufacturing (NJMM), Tom has used Lean methodologies and processes to make his manufacturing operation a bright spot for otherwise limping automaker Taylor Motors. Now Tom has been called to company headquarters near Detroit to meet with Senior Vice President Rachel Armstrong. Will she offer Tom a promotion? Or will the shortsighted CFO J. Ed Morgan cut NJMM to the bone and negate all Tom’s hard work?

A powerful story for today’s challenging economy, The Remedy doubles as a highly readable playbook for taking your Lean practices into marketing, service, and other parts of the organization where Lean hasn’t typically been applied. Bringing back characters from Dennis’s Shingo Prize–winning Lean novel Andy & Me, including the reclusive quality sensei Andy Saito, this new tale demonstrates how you can bring Lean processes to your entire enterprise.

Follow Tom, Rachel, and Andy as they embark on a mission to revitalize Taylor Motors in the face of the U.S. auto industry’s devastating meltdown. Along the way, you’ll discover illuminating new ways to:

• Apply Lean concepts and methods beyond manufacturing to corporate functions such as marketing, supply chain, and design
• Overcome the politics of large organizations as you create change
• Define your True North—your strategic and philosophical objective
• Apply Lean to knowledge-based workflows
• Understand and strengthen the Four Rules and the Four Capabilities in your organization
• Reduce waste and build value in different kinds of enterprises such as health care and retail

Do you want to improve your business, but haven’t considered Lean processes as a possible approach? The Remedy offers a vibrant, entertaining look at how today’s Lean techniques can be applied far beyond the factory floor.