What to Expect From a Corporate Lean Program

Corporate "lean" programs, often modeled after the Toyota Production System, can be powerful instruments for improving the performance of manufacturing plants. They help to emphasize parts of the production process that add the most value and eliminate those that don't. However, misplaced expectations can make implementation difficult and reduce the benefits. The authors argue that if managers better understood the expected rates of improvement, then implementations would go more smoothly. The authors studied the implementation of the Volvo Group's production system. Volvo Group, a leading maker of trucks and other heavy vehicles. The company introduced the Volvo Production System in 2007, and since then has been implementing it in its factories around the world. The authors visited 44 of Volvo's 67 plants and interviewed 200 managers. They found that there were four distinct stages of change in the rate of performance improvement and that there was a strong relationship between a plant's maturity in a production system implementation and its performance; progress roughly followed the shape of an S-curve: a plant's rate of improvement changes in the shape of a bell curve as the plant becomes more mature in implementing the production system. Performance improves slowly at first, and then at an increasing rate before the improvement rate gradually decreases. To measure the performance of the plants, the authors focused on nonfinancial metrics related to the quality, cost, delivery and safety of the plant's output. They then used statistical methods to find patterns. Volvo's assessment process provides a structure to help local managers compare their plants. It also provides a mechanism for transferring expertise and best practices. The assessments have a strong symbolic impact: They communicate the company's commitment to the production system. Implementing a production system is a long journey, but the authors conclude that it's a worthwhile endeavor.

• Operations strategy