Organizational Development: The Missing Link in Lean Transformations
Introduction
Lean Manufacturing is an operational strategy oriented toward achieving the shortest possible cycle time by eliminating waste. It is derived from the Toyota Production System and its key thrust is to increase the value-added work by eliminating waste and reducing incidental work. The technique often decreases the time between a customer order and shipment, and it is designed to radically improve profitability, customer satisfaction, throughput time, and employee morale.
The benefits generally are lower costs, higher quality, and shorter lead times. The term "lean manufacturing" is coined to represent half the human effort in the company, half the manufacturing space, half the investment in tools, and half the engineering hours to develop a new product in half the time.

The Issues
Lean Manufacturing is in direct opposition with traditional manufacturing approaches characterized by use of economic order quantities, high capacity utilization, and high inventory. In changing from a traditional environment to one of lean production, cultural issues emerge quickly, as well as resistance to change. A managing change program is needed to accompany the effort.
But becoming a lean, world class company requires overcoming organizational inertia. Often overlooked are outdated cultures, ineffective management skills, untrained workers, bureaucratic red tape, and traditional pay and reward systems that do not fit. In a Lean Manufacturing transition, factories, systems, and organizations have to be streamlined. Lines of communications have to be opened. Barriers between departments have to be dismantled, and you must put an end to the "we've always done it that way" argument. To be successful, employees must be highly involved in assuming new skills and responsibilities. Consider the following:

(1)Organization culture is a major factor in success. Culture is to an organization as personality is to an individual. Said simply, its the "way things are done." Culture greatly influences many facets of daily productivity and improvement: the way employees work, their attitudes toward work and change, their relationships with each other and management. The way change is introduced, embraced and tackled is defined by a company's culture. All of it contributes greatly to a company抯 health.

Experts estimate that 80 percent of becoming a lean enterprise is culture-related. Without employee support, a company can抰 make many, if any, changes in the organization. Making any changes sustainable can be an uphill battle without the right company culture. For instance, a company with a bureaucratic and controlling management culture will likely have the most difficult time transforming itself to a Lean culture or a team-based organization.

(2)Traditional pay systems are structured through periodic reviews. The criteria for each employee are loosely defined, often generic in nature and hardly in consonance to a Lean environment. Rewards for taking additional responsibilities are not defined, nor for m-astery of skills. There is little incentive for learning additional skills and virtually nothing for cross training, a must in lean manufacturing.

Individual pay systems pay for the job, and do not differentiate skills or contribution sufficiently. Over time they result in pay outstripping employee contribution, making employees complacent, self-inflated and difficult to work with. Contribution higher than pay, in contrast, results in disillusioned employees with high turnover and drop in performance over time. The challenge in devising a pay system is one where contribution and pay for each employee continuously grows parallel over time.

(3)Traditional performance reward systems are, for the most part, subjectively eva