Volume 1 / Issue 4 / May 9, 2016
Enterprise thinking Skill2
One of the biggest shifts for a lean enterprise is the shift from functional or departmental thinking to enterprise thinking.
Functional thinking causes people to think about their job or their department. When judging the merit of a new way of doing something, they think about the impact on themselves. This causes sub-optimization and territorial infighting. One of the great-unseen costs for every enterprise is the cost of defending turf. When a problem occurs, people look for ways to deflect the blame. They spend hours talking, emailing and presenting data about why it’s not their fault. When an improvement is suggested they spend even more time trying to make sure the change affects everybody but them
Enterprise thinking helps people understand how potential improvements affect the enterprise as a whole. Enterprise thinking is where value-stream mapping plays a big part. In value-stream mapping, you map the as-is flow of the entire enterprise. It shows how all the individual activities work together in a process to create value for the customer.
Enterprise thinking can only exist when everyone, from top to bottom, understands what we mean by a process —the conversion of input to output by applying value —and when everyone knows that all work is accomplished by a process. The lean enterprise must get to the point that, if something goes wrong, we look at the process that created the waste not the individuals involved. When we want to change something, we look at the steps in the process and change those. Enterprise thinking means we look for the common good not our individual or departmental good.
Enterprise thinking requires that management and the people know the basics of process improvement, which are: process mapping, process measurement, and process redesign.
Lean people are intimately familiar with process mapping. A picture is still worth all those words. Lean people understand various types of process mapping techniques and know when to apply each one. The more tools we have in our process mapping tool kit, the more likely we are to select the proper tool every time.
Process measurement is the key to improving any process. It is still true that most people think, however unintentionally, “Tell me how you’re going to measure me, and I’ll tell you how I’m going to act.” I’ve seen affects of this kind of thinking over and over. A salesman’s commission is based on total sales dollars so he pushes the high-dollar items, not the high-margin items. Base the commission on standard margin, and he sells the high margin items but may reduce actual profit by promising delivery in less than lead-time. The shop then has to work overtime to execute and actual profit is reduced. Measure the wrong thing or measure something in an imprecise way and you may work at improving the wrong area. Lean people understand how to design meaningful measurements of critical steps in their processes.
Enterprise thinking is used to transform the as-is process to the to-be process. The step of reengineering or redesigning processes to eliminate waste requires that lean people set aside their parochial concerns and think about what’s best for the entire enterprise. An individual in this position may be asked to modify the process in such a way that it makes his or her job harder but eliminates waste for the larger enterprise. There are specific tools and techniques used to redesign processes. These must be understood and applied by lean people.
Source: AFEE Manufacturing Consortium Weekly Update, October 10, 2005