PRD_LESAT_Fac._Guide_2001

LEAN
ENTERPRISE
SELF
ASSESSMENT
TOOL
Version 1.0
AUGUST 2001
FACILITATOR’S GUIDE
LEAN ENTERPRISE
SELF-ASSESSMENT TOOL
(LESAT) Version 1.0
Facilitator’s Guide
August 2001
Table of Contents
Foreword .........................................................................................................2
Acknowledgements ...........................................................................................5
Part I - Introduction...........................................................................................7
Part II – Lean Enterprise Architecture..................................................................11
Part III - Development of Lean Maturity Matrices .................................................14
Part IV – Assessment Methodology ....................................................................22
Part V - LESAT Maturity Matrices .......................................................................32
Appendix A – The “What and Why” of Lean .....................................................86
Appendix B – LESAT Glossary ...........................................................................104
Appendix C – TTL Tutorial .................................................................................108
Appendix D – Comparison of LESAT to Other Assessment Approaches ................125
Appendix E – LESAT Assessment Aids ................................................................136
© Copyright Massachusetts Institute of Technology, 2001

Foreword
The Lean Aerospace Initiative (LAI) is a collaborative published as a three volume set. This guide (called
effort among major elements of the United States Air the TTL Guide) describes a logical sequence of
Force and related government organizations, leading actions required for transitioning an enterprise to a
companies within the aerospace industry, and the Lean state. Both the TTL Guide and the LEM may
Massachusetts Institute of Technology. LAI was formed be accessed from the LAI web site,
to identify and implement Lean principles and prac- http://lean.mit.edu or by contacting the MIT LAI
tices throughout the aerospace industry. office.
An early LAI product, the Lean Enterprise Model The tool described in this document is called the Lean
(LEM) provided a convenient framework for integrat- Enterprise Self-Assessment Tool (LESAT). It is
ing lean principles and practices. In providing a tax- closely aligned with the structure and content of the
onomy of lean principles and practices, the LEM TTL Guide. Therefore, the TTL Guide is highly rec-
addresses the issue of the “whats” of lean, but does ommended as read-ahead material for the enterprise
not address the “hows” of implementation. Another performing a Lean self-assessment.
LAI product was developed to address the broad
issues of implementation. Called “Transitioning to The relationships between the LEM, the TTL Guide
a Lean Enterprise: A Guide for Leaders”, it is and LESAT are illustrated in Figure 1.
Figure 1. LAI Enterprise Tool Triad
LEM
Principles and
IMPLEMENTATION Practices BEST PRACTICES
TTL LESAT
Guide and Self
Roadmap Assessment
ASSESSMENT
Page 2 of 166 © Copyright Massachusetts Institute of Technology, 2001

Western manufacturers were slow to comprehend the ful transition and may begin asking “How much progress
significant paradigm shift initiated by Toyota’s new have we made?” “How much farther is it to lean?” “How
model of production operations. The awareness do we compare to others in getting lean?”
occurred in “bits and pieces” as some of the practices
became known. As more and more of the lean prac- These types of questions led LAI to realize that consor-
tices were uncovered, the principles underlying those tium members needed a means of assessing their
practices began to be perceived. Many of the principles progress relative to the TTL Roadmap and of determin-
and practices of lean are captured and organized with- ing the extent to which lean principles, practices and
in LAI’s Lean Enterprise Model (LEM). behavior have become “the way we do business” across
the enterprise.
Acquiring an understanding of the fundamental princi-
ples of lean was a necessary prerequisite for being able The Lean Enterprise Self-Assessment Tool (LESAT) was
to conceive and develop a process for converting an developed and field-tested over an 18-month period,
enterprise organized and managed under the mass pro- resulting in the release of LESAT Version 1.0 in August
duction mind set to one based on lean principles and 2001. As the name implies, LESAT was designed for
practices. The LAI consortium developed the “Transition- use in self-assessment by enterprise leaders. LESAT is
to-Lean (TTL) Model and Roadmap” that provides an not intended to provide any basis for comparison
organizing framework for achieving a lean transforma- between different organizations. Each organization is
tion. unique and will have distinct goals and objectives.
These varying objectives will translate into different lev-
As consortium members gained experience with TTL, els of desired lean maturity for each enterprise. LESAT
they began to acquire an understanding of what it is also not intended to be used for comparative evalua-
means to be a lean organization. They perceived that a tion or source selection.
lean organization not only must change its practices, it
must also change its behavior. It is much more difficult It is important to note that LESAT facilitates self-assess-
to change behavior than to change practices. ment of an organization at the enterprise level and is
intended to highlight the key integrative practices at the
The lean transformation is a lengthy journey for any com- uppermost levels of an enterprise. Other assessment
pany. After launching upon the journey there are typi- tools have been developed that focus on specific process
cally some quick successes as well as some setbacks, and or functional areas, such as production operations,
frequently some initiatives take longer than expected. product development, and supply chain management.
Enterprise executives are naturally anxious for a success-
© Copyright Massachusetts Institute of Technology, 2001 Page 3 of 166

The LESAT material is contained in two volumes:
LESAT Guide
(this volume) has been written for Lean Change Agents and others who are deeply involved in facilitating
lean transformations within their organizations. It describes the rationale underlying the development of
LESAT, a suggested outline of steps for conducting an assessment, and several assessment aids for analyz-
ing and presenting the assessment data. The LESAT Maturity Matrices are also included for completeness.
LESAT Maturity Matrices

contains only the maturity matrices and minimal auxiliary discussion. It is designed as a “workbook” for
the assessment participants, to be marked up while performing the assessments. LESAT Facilitators within
each organization are expected to provide guidance and assistance to those participating in the assessment.
Both volumes of LESAT may be accessed from the LAI web site, http://lean.mit.edu or
by contacting the MIT LAI office.

Acknowledgements
This Lean Aerospace Initiative (LAI) product utilizes and all members of both the U.K. and U.S. LAI are
elements of the Enterprise Transition To Lean (TTL) hereby acknowledged and thanked.
Roadmap and the Lean Enterprise Self-Assessment
Tool (LESAT Version 1.0) to provide a structure and The U.S. Lean Aerospace Initiative is a consortium
implementation reference for the self-assessment consisting of 25 industry, 13 government, and 2 labor
process. union members joined with the Massachusetts Institute
of Technology. The consortium is a 50%-50% cost
This LESAT Guide has been developed at the share partnership with industry, MIT and government.
Massachusetts Institute of Technology (MIT) to assist The Air Force Aeronautical Systems Center with the
members of the U. S. Lean Aerospace Initiative in the Air Force Research Laboratory’s Manufacturing
use of the Lean Enterprise Self-Assessment Tool Technology program provides government leader-
(LESAT) and addresses the specific needs of the U. S. ship.
Lean Aerospace Initiative members. Members of the
U.S. LAI LESAT Guide Development Team included: The U.K. Lean Aerospace Initiative is a consortium
Professor Deborah Nightingale (MIT Co-Lead), Mr. consisting of the University of Bath, Cranfield
Chris Cool, Northrop Grumman (Industry Co-Lead), University, the University of Nottingham, the
Mr. Kelly Brown, Aeronautical Systems Center,WPAFB University of Warwick and some 40 participating
(Government Co-Lead), Dr. Joe Mize, MIT, Mr. company members of the Society of British Aerospace
Thomas Shields, MIT, and Mr. Cory Hallam, MIT. All Companies (SBAC). The initiative has 50%-50% joint
facts, statements, opinions, and conclusions expressed funding by participating SBAC members and IMI
herein are solely those of the core team members in Aerospace (Link) Sector, Engineering and Physical
their capacity as principal co-authors of the Guide. Sciences Research Council.
The Massachusetts Institute of Technology (MIT) and The core team consisting (alphabetically) of Mr. Trevor
the Warwick Manufacturing Group of the University Broughton, Mr. Kelly Brown, Mr. Chris Cool, Dr.
of Warwick under the auspices of the U.K. and U.S. Valerie Crute, Mr. Mike James-Moore, Dr. Joe Mize,
Lean Aerospace Initiatives have developed the current Prof. Deborah Nightingale, Mr. Tom Shields, and Dr.
version of the Lean Enterprise Self-Assessment Tool Martin Womersley developed the current and Beta
(LESAT). The tool development was a result of active versions of the LESAT. We would also like to acknowl-
participation by many members of the U.K. and U.S. edge the valuable inputs received from the rest of the
Lean Aerospace Initiatives. The contributions of mem- U. S. LAI research team and staff and the U. K. LAI
ber organizations were critical to this development research team and staff in the preparation of the cur-

Acknowledgements Continued
rent version of LESAT and previous assessment ver- Propellers, FR HiTemp, GenCorp Aerojet, Hurel
sions. All facts, statements, opinions, and conclusions Dubois (UK), Lockheed Martin Aeronautics, Lockheed
expressed herein are solely those of the core team Martin Space Systems, Matra BAe Dynamics,
members in their capacity as principal co-authors of Northrop Grumman, Pratt & Whitney, Raytheon,
the tool. Rockwell Collins, Rolls Royce, Sikorsky Helicopters,
Smiths Industries Aerospace, Textron Systems, TRW
The contributions and/or feedback from real-life test- Aeronautical Systems and the United States Air Force
ing by the following companies alphabetically: AIR- (USAF) in the development of LESAT are gratefully
BUS (UK), BAE SYSTEMS, Boeing Helicopters, Dowty acknowledged.

Part I - Introduction
Part I provides an introduction to assess- nies and which result in national awards and/or cer-
ment processes in general, a discussion of tification or qualification. Examples of such pro-
how the LESAT format was selected, and a grams include:
brief description of how the LESAT was
developed and tested. Malcolm Baldridge National Quality
Award:
Assessment Processes An overall performance award governed by the
As management practices have evolved over the past Department of Commerce and the National Institute
century, organizations have learned that to be suc- of Standards and Technology (NIST). An independ-
cessful they must become adept at continuously ent, external assessment is conducted by evaluating 7
defining and re-defining their directions and goals. categories of performance and scoring them against
They must also develop means of determining the a 1000 point scale. The categories include:
degree to which their goals are being achieved. Leadership, Strategic Planning, Customer/Market
Traditional performance measures are employed to Focus, Information & Analysis, Human Resource
display financial performance, operational efficien- Focus, Process Management, and Business Results.
cy, etc. These traditional measures are inadequate,
however, in portraying progress toward achieving ISO 9000:
behavior changes or in showing the effectiveness of The ISO 9000 quality series represents a set of inter-
comprehensive improvement strategies. national quality management standards and guide-
lines. They are based on eight quality management
A variety of assessment tools have emerged which principles that are considered by the international
facilitate initiatives aimed at implementing continual quality community to represent best management
improvement strategies. A variety of organizational practices. A third party assessment is usually per-
survey instruments are available (Kraut 1996) for formed to provide customers assurance that the
assessing employee morale, determining customer enterprise establishes and maintains a quality system
satisfaction, and aligning the key stakeholders of an that meets the requirements of the ISO 9001,
enterprise. The Total Quality movement has also Quality Management Systems-Requirements
spawned a number of performance based assess- standard.
ment tools (Wilson and Pearson 1994).
European Quality Award (EFQM):
Assessment processes are imbedded in several pro- The European Foundation for Quality Management
grams which encourage competition among compa- grants an award annually based upon criteria related

Part I - Introduction Continued
to the EFQM Excellence Model. The nine categories assessed include Leadership, Policy & Strategy, People,
Partnerships & Resources, Processes, Customer Results, People Results, Society Results, and Key Performance Areas.
In Appendix D, LESAT is compared to these three models.

An important category of assessment tools has emerged in recent years called “Capability Maturity Matrix” (CMM).
The basic concept underlying the CMM is to first determine the most important factors relative to an organization’s
performance. Then for each factor, a series of “levels” are defined, such that progressively greater levels of capa-
bility are reflected as an organization “matures” in its performance on that factor.
Selection of the LESAT Approach

The LESAT Development Team first gathered extensive input from LAI consortium members regarding their needs rel-
ative to assessment. The needs were analyzed and consolidated into a set of user requirements:
• Must assess degree of “leanness” for an enterprise and all its core processes
• Must provide feedback for improvement, guidance for “next steps”
• Assessment must be data driven, based on documentable evidence
• Should be consistent with other LAI tools, i.e. LEM and TTL
• Should require minimal time and effort to create
• Should be flexible to allow assessment of varying organizational scope
• Should be understandable and easy to apply
• Should align with Business Planning Process
Several alternative approaches to performance assessment were examined and compared. The various assessment
tools were grouped into three categories for comparison purposes:
• Capability Maturity Matrix
• Baldridge Type (quality of documented processes)
• Outcome based (measured change in performance over time,
e.g. financial scorecard)

The several user requirements were assigned weights relative to an organization’s performance. An organ-
corresponding to their relative importance in deter- ization progresses through several levels of maturity
mining which of the three approaches is best for on each performance factor. (For LESAT, five levels of
LESAT. By a substantial margin, the Capability maturity are employed. Level 1 indicates least capa-
Maturity Matrix approach was judged to best fit the ble; level 5 indicates most capable, or world-class
needs of LESAT. performance.) Accordingly, for each performance
factor, statements are constructed that characterize an
The basic concept underlying the Capability Maturity organization’s maturity at each of the five levels of
Matrix is to first determine the most important factors achievement.
As an example, one of the factors considered very important in an enterprise’s transition to Lean is a “Lean
Enterprise Vision”. The five capability levels for this factor are:
Level 1 - Senior leaders have varying visions of Lean, from none to well defined
Level 2 - Senior leaders adopt common vision of Lean
Level 3 - Lean vision has been communicated and is understood by most employees
Level 4 - Common vision of Lean shared by the extended enterprise
Level 5 - All shareholders have internalized the Lean vision and are an active part
of achieving it
An organization, at any given point in time, can assess itself on this particular performance factor and determine
the means for elevating the organization to the next level of capability.
Development and Testing of LESAT

The LESAT Development Team engaged in a series of For each lean practice, five maturity levels had to be
meetings, conference calls, and email exchanges to defined. A three-day session was held at MIT during
develop the initial set of lean practices that were the summer of 2000, at which knowledgeable indus-
included in the assessment matrices. More than a try, government and university representatives devel-
dozen members of the LAI consortium companies par- oped the level descriptions. This LESAT Prototype was
ticipated in this effort. reviewed by a small number of companies to obtain a

Part I - Introduction Continued
quick read on its usefulness. Another three-day session The LESAT Beta version was field tested in both the U.S.
was held at MIT in August 2000 to finalize the Alpha ver- and U.K. during the winter and spring of 2001.
sion, which was then field-tested or reviewed by more A LESAT Workshop was conducted at MIT on June 13 –
than 10 LAI members. 14 to consider numerous suggestions for refinements
that were offered during the field-testing. The field-test-
Following the Alpha field test, a workshop was conducting in the U.K. also generated numerous suggestions for
ed at MIT in November 2000 to further refine the assess- refinement.
ment tool, resulting in the LESAT Beta version.
The U.S. and U.K. LESAT Development Team conducted
Concurrently, LAI researchers discovered that the U.K. an intensive three-day session (June 19 – 21, 2001) at
LAI was also developing an enterprise level assessment the University of Warwick, with the objective of deriving
tool. Following discussions and with input from several a common set of LESAT Maturity Matrices, LESAT Version
U.S. LAI consortium members, it was decided to attempt 1.0, for release in August 2001.
to develop a common set of assessment matrices.

Part II – Lean Enterprise Architecture
Many of the early lean initiatives focused on picking The full benefits of lean can be realized only by re-
the “low hanging fruit” primarily at the factory floor thinking the entire enterprise: its structure, policies, pro-
level. Viewed as a collection of practices with names cedures, processes, management practices, reward
such as “Kaizen”, “Kanban”, and “Poka-yoke”, lean systems, and external relationships with customers and
is frequently implemented in production operations suppliers.
with little or no integration with other enterprise func-
tions or processes. Both the Transition-to-Lean Roadmap and LESAT focus
on the key integrative practices at the uppermost level
While some benefits were gained with these efforts, of an enterprise. A generic lean enterprise architec-
the results were often less than had been hoped for. ture is used as the organizing framework, as shown in
In-depth analysis reveals that the practices were being Figure 2. The architecture is organized into three
implemented in a bottom-up fashion within an incom- basic groups, each consisting of a number of enter-
patible enterprise environment. prise level processes. All of these processes must be
transformed in order to achieve a lean enterprise.
Enterprise Leadership Processes:

These processes are developed and maintained by leadership to guide the activities of the enterprise. They cut
across all of the entities that make up the enterprise. Enterprise leadership provides the direction and resources to
break down barriers among and within Life Cycle Processes that result in wasted resources and reduced value to
customers and stakeholders. They also provide the leadership to transform the Enabling Processes to eliminate
waste and improve responsiveness to the rest of the enterprise.
Life Cycle Processes:

These processes define the product life cycle, from initial conception through operational support and ultimate dis-
posal. They directly determine the value provided to customers and stakeholders alike. The degree to which an
enterprise is successful in making these processes Lean is one measure of its effectiveness and efficiency in deliver-
ing value to the customer and the other stakeholders.
Enabling Infrastructure Processes:

These support the execution of Enterprise Leadership and Life Cycle processes. The enabling processes provide sup-
porting services to other organizational units whom they serve as internal customers. Since they enable rather than
directly result in enterprise success, they can be easily overlooked as sources of waste within the value stream.
However, waste that is inherent in these processes can negatively impact the enterprise as a whole and the life cycle
processes, and therefore they should be attacked vigorously.

Part II – Lean Enterprise Architecture Continued
In a “Lean Enterprise”, Lean principles and practices provide the basis for product and process design,
(e.g. pull, flow, waste minimization, etc.) are imple- involving customers and key suppliers. The produc-
mented in all processes. The Life Cycle processes are tion process is organized and managed according to
aligned horizontally along the customer value stream. lean production practices. Suppliers are integral to
They begin with defining customer value and translat- the extended enterprise. Distribution and post-deliv-
ing this into requirement definitions. These, in turn, ery support are the final processes in the life cycle.
Figure 2 - Generic Lean Enterprise Process Architecture
Life Cycle Processes
• Business Acquisition and Program Management

• Requirements Definition
• Develop Product and Process
• Supply Chain Management
• Produce Product
• Distribute and Service Product
Enabling Infrastructure Processes
• Finance
• Information Technology
• Human Resources
• Quality Assurance
• Facilities and Services
• Environment, Health and Safety
Enterprise Leadership Process
• Strategic Planning
• Business Models
• Managing Business Growth
• Strategic Partnering
• Organizational Structure and Integration
• Transformation Management

Lean principles and practices also must be imple- skilled workforce that is capable of performing a wide
mented in all enabling infrastructure processes, but array of tasks, many of which were performed by spe-
only after these processes have been re-defined and cialists in a mass production situation. Likewise, HR
re-structured consistent with the fundamental nature of must facilitate continuous just-in-time education and
the Lean paradigm. For example, the Human training consistent with the Lean paradigm. Similar
Resources process in a Lean Enterprise not only modifications must be made to all other HR functions,
applies Lean thinking to its traditional operations, it such as employee benefits, incentives, etc. Analogous
re-defines those operations to support Lean through- modifications are required in all the enabling infra-
out the remainder of the enterprise. When HR recruits structure processes: Finance, Information Technology,
new employees for production, selection criteria must Facilities & Services, Environment/ Health/Safety.
now recognize that Lean production requires a multi-
In general, there are three aspects involved in transforming the above processes to
“lean:”
First, the mission, procedures, practices, processes, and metrics of each organizational unit must be re-cre-
ated, consistent with the requirements of a lean business model.
Second, the fundamental principles of lean behavior (waste elimination, balanced flow, etc.) must be
implemented within a framework of on-going continuous improvement.
Third, the enterprise must be integrated across all the important dimensions: organizations, information,
processes, and enabling infrastructures.

Part III - Development of Lean Maturity Matrices
The Lean Enterprise Self-Assessment Tool (LESAT) has As described in Part I, several alternative approach-
been designed to assist an organization assess its es to performance assessment were examined and
progress in its transformation to a Lean enterprise. It compared. The approach that best satisfies the user
is expected that the assessment will be performed on requirements is called a Capability Maturity Matrix.
a regular, periodic schedule. The outcomes of a par- There are two primary steps in developing a
ticular assessment should provide guidance to the Capability Maturity Matrix. The first is to determine
organization in refining/adjusting its continuous the particular factors against which the organization
improvement plans. will be assessed. Once the factors are specified, the
progressive maturity levels related to each factor must
be carefully constructed
Generic Capability Level Definitions

A significant number of factors are considered important in transitioning to Lean. Five maturity statements were
developed for each factor, ranging from least capable (Level 1) to world class (Level 5). It was considered impor-
tant to develop generic definitions or characterizations of each capability level. These definitions served as a ref-
erence for the teams who developed the specific maturity statements for each of the Lean practices included in the
assessment. These generic definitions are shown in Figure 3.
Figure 3. Generic Level Definitions

Generic Definition
Level 1 Some awareness of this practice; sporadic improvement activities may be

underway in a few areas.
Level 2 General awareness; informal approach deployed in a few areas with

varying degrees of effectiveness and sustainment.
Level 3 A systematic approach/methodology deployed in varying stages across most

areas; facilitated with metrics; good sustainment.
Level 4 On-going refinement and continuous improvement across the enterprise;

improvement gains are sustained.
Level 5 Exceptional, well-defined, innovative approach is fully deployed across the

extended enterprise (across internal and external value streams); recognized
as best practice.

These levels are intended to depict a progression in dynamic and therefore Lean practices will continue to
the capability of the organization relative to the par- evolve and improve. Level 5 is not the end of the Lean
ticular performance factor being evaluated. The journey, because one of the key tenets of Lean is con-
enterprise must have fully satisfied all elements of a tinuous improvement. The definition of Level 5 (and
particular level before it can progress to the next high- for all other levels as well) for the various factors (Lean
er level. practices) will evolve through time as competitive
enterprises develop ever-higher standards for world-
It is important to recognize that an organization may class performance.
not aspire to attain Level 5 in all the performance fac-
tors. It is management’s prerogative and responsibil- The Lean Maturity Matrix Form
ity to decide the level it wishes to ultimately attain on A “Lean Maturity Matrix” form has been designed for
each factor. These decisions should collectively reflect organizing the information contained in the assess-
the strategic objectives of the organization. ment exercise. A blank copy of this form is presented
in Figure 4. The contents of each portion of the form
In performing the assessment exercise, an organiza- are described in italics. A sample, completed form is
tion should not be overly concerned with determining shown in Figure 5. It is instructive to compare the five
a precise measure of its current state (e.g., deciding capability levels in the sample form with the generic
whether it is currently at a high Level 2 or a low Level capability level definitions presented in the previous
3). Rather, it should recognize that its present state is section. The progressive nature of the five capability
either matching its desired level for that factor or that levels for each Lean practice should be obvious to the
further improvement is needed. It is also important to reader.
recognize that the competitive environment is very

Figure 4. Blank LESAT Maturity Matrix
Section #: Section name
Definition: Brief description of the primary characteristics of the process contained in this section
Section, Group # and Group Name:

Brief description of this Group number. In Section I, The Group is one of the Primary Activities from the Transition-to-Lean (TTL) Roadmap.
Diagnostic Questions
• Generic questions regarding the performance of the enterprise relative to this Group of practices
LP# LEAN PRACTICES CAPABILITY LEVELS
A specific lean Level 1 Level 2 Level 3 Level 4 Level 5

practice associated Statement describing little Statement describing
with this Group awareness of this lean world-class behavior for
practice this lean practice
Sound bite phrase
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Outcomes and lean behaviors that an enterprise will exhibit as it proceeds on its Lean transformation
(Examples)
Evidence Supporting data utilized in assessing the current capability level of the Enterprise on this lean practice
Opportunities Inputs to plans of action to leverage opportunities or to move to the desired level of capability
Check the box with “C” for current capability or box “D” for desired capability
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Page 16 of 166
Figure 5. Sample LESAT Maturity Matrix
LIFE-CYCLE PROCESSES
Definition: Implement lean practices across life-cycle processes for defining customer requirements, designing products and processes, managing supply chains,
producing the product, distributing product and services, and providing post delivery support.
II.A. Business Acquisition and Program Management

To be successful in the globally competitive environment of the twenty-first century, enterprises must develop and manage partnerships with their
customers and be able to dynamically re-configure and align core competencies among suppliers, the enterprise and its partners in order to deliver
best life cycle value to customers.
• Are new business opportunities arising from lean enabled capabilities being fully exploited?
• Does customer feedback and usage data drive new business process development?
• Are assets allocated across the value stream in a consistent and balanced manner?
• Are program risks and resource requirements balanced to assure optimal flow throughout the product life cycle?
• Are skills and resources drawn from across the extended enterprise to enhance program development efforts?
II.A.1 Leverage Lean Level 1 Level 2 Level 3 Level 4 Level 5

Capability for Business improvement Improvement gains provide Benefits sustained from There is full use of the The strategic plan dynami-
Business Growth initiatives are ad hoc and resources to facilitate future applying lean thinking with- enhanced capabilities and cally incorporates extended
Exploiting new business are focused on operational improvements. Potential in the enterprise are used to customer knowledge enterprise capabilities and
efficiency. business opportunities from retain current business throughout the enterprise to stakeholder interests to
opportunities arising from
applying lean thinking and/or win new business. leverage opportunities for identify and leverage
lean enabled capabilities across core competences competitive advantage. opportunities.
are recognized and plans
have been developed.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Reduced cost, increased quality and faster response times from waste eliminated are used to maintain or win new business.
(Examples) • The ability to improve and refine processes quickly is used extensively to respond to changing customer requirements.
• A process is used to scan the competitive environment to exploit opportunities arising from the enhanced capabilities of the lean enterprise.
Evidence
Opportunities
Page 17 of 166
Structure of LESAT Assessment Matrices
The LESAT Development Team solicited input from a wide variety of LAI consortium members to determine the set of
factors considered most important in transitioning to a Lean enterprise. The Team determined an overarching organ-
izing structure for the LESAT matrices consisting of three major sections (See Figure 6), consistent with the Lean
Enterprise Architecture described in Part II.
Figure 6 - LESAT Architecture
Section I
Lean Transformation/ Leadership
Section II Section III

Life Cycle Processes Enabling Infrastructure
The Enterprise Level Assessment Architecture is the basis for the Lean Enterprise Self-Assessment Tool (LESAT). It pro-
vides the generic process definition found in most aerospace enterprises. The LESAT is organized into these three
assessment sections:
Lean Transformation/Leadership
the processes and leadership attributes nurturing the transformation to lean principles and practices

the processes responsible for the product from conception through post delivery support
Enabling Infrastructure
the processes that provide and manage the resources enabling enterprise operations
© Copyright Massachusetts Institute of Technology and University of Warwick, 2001. Copyright permission granted only for the right to use and repro-
Page 18 of 166 duce unlimited copies. All other rights are reserved. (Supported jointly by the U.K. Lean Aerospace Initiative and the U.S. Lean Aerospace Initiative)
Consequently, the Lean maturity matrices for LESAT are organized as shown in Figure 7.
Figure 7. Organization of LESAT Maturity Matrices
Section I - Lean Transformation/Leadership

I.A. Enterprise Strategic Planning (3 Lean Practices)
I.B. Adopt Lean Paradigm (4 Lean Practices)
I.C. Focus on the Value Stream (4 Lean Practices)
I.D. Develop Lean Structure and Behavior (7 Lean Practices)
I.E. Create and Refine Transformation Plan (3 Lean Practices)
I.F. Implement Lean Initiatives (2 Lean Practices)
I.G. Focus on Continuous Improvement (5 Lean Practices)
Section II - Life-Cycle Processes

II.A. Business Acquisition and Program Management (4 Lean Practices)
II.B. Requirements Definition (2 Lean Practices)
II.C. Develop Product and Process (3 Lean Practices)
II.D. Manage Supply Change (3 Lean Practices)
II.E. Produce Product (2 Lean Practices)
II.F. Distribute and Service Product (4 Lean Practices)
Section III - Enabling Infrastructure Processes

III.A. Lean Organizational Enablers (5 Lean Practices)
III.B. Lean Process Enablers (3 Lean Practices)
A total of 54 Lean practices are included in the LESAT Maturity Matrices (see Part V). Each of these is to be assessed
according to the five level scale presented.
Section I – Lean Transformation/Leadership,

assesses the leadership of an enterprise and their ability to effect a transformation to a Lean enterprise. The focus is
on the Lean practices and processes that are developed and maintained at the top level to guide the activities of the
organization. These overarching practices cut across all of the entities that make up the organization, and so the
emphasis is on how well Lean has been integrated across the enterprise.

Structure of LESAT Assessment Matrices Continued
Section II – Life Cycle Processes,

are defined by the product life cycle, from initial conception through operational support and ultimate disposal.
These processes directly determine the value provided to customers and stakeholders alike. The degree to which an
enterprise is successful in making these processes Lean is a measure of its effectiveness and efficiency. Enterprise
leadership provides the direction and resources to break down barriers among and within Life Cycle processes that
result in wasted resources and reduced value to customers and stakeholders. This section of the LESAT addresses
the level of Lean implementation applicable to these Life Cycle Processes.
Section III - Enabling Infrastructure Processes,

supports the execution of enterprise leadership and life cycle processes. These enabling processes provide sup-
porting services to other organizational units whom they serve as internal customers. Since they enable rather than
directly result in enterprise success, they can be easily overlooked as sources of waste. However, waste that is inher-
ent in these processes can negatively impact the enterprise as a whole in a manner hidden from view.
The focus in these sections is at the Enterprise level and is meant to highlight the key integrative practices at the
uppermost level of an enterprise. A set of Lean practices is identified for each of these sections. These practices
are not meant to be all-inclusive but do represent some of the more important behaviors that Lean organizations
exhibit. Assessing the enterprise against this subset of leading indicator practices will provide a good “snapshot”
of how well an organization is progressing along the Lean journey.
Linkage of LESAT Section I to TTL Roadmap

The Section I practices are directly linked to the Transitioning To A Lean Enterprise (TTL) Guide. They are closely
aligned with the TTL Roadmap, shown in Figure 8.

Figure 8
Enterprise Level Roadmap
Detailed Lean Vision

Initial
Lean
Vision
Lean
Environmental Transformation
Corrective Action Detailed Corrective Framework
Indicators Action Indicators
Outcomes on Enterprise Level

Enterprise Metrics Transformation Plan

Page 21 of 166
Part IV – Assessment Methodology
For those who have the responsibility for facilitating the assessment process within their organization, it is impor-
tant to recognize that the assessment methodology consists of several steps that need to be carefully planned and
scheduled. A general overview of the LESAT methodology is shown in Figure 9.
Figure 9
LESAT Methodology
Step 1: Facilitated meeting to introduce tool and pass out materials. Enterprise Leader Champions.
Step 2: Enterprise leaders (with staff as needed) examine LESAT and conduct assessment.
Step 3: Leadership reconvenes to discuss results and determine present maturity level.
Step 4: Leadership determines desired level and measure gap.
Step 5: Develop action plan and prioritize resources.
Prior to the assessment, a number of issues need to be or other appropriate entity. The distinguishing char-
addressed. The first decision that needs to be made acteristic of an enterprise is that it should have prof-
has to do with the timing of the assessment. The it/loss or other performance accountability. Another
assessment will likely be performed on an annual or characteristic of an enterprise is that it usually includes
semi-annual basis. Some companies have found that the life cycle core processes (program management,
conducting the assessment about one month prior to requirement definition, product development, supply
their annual business planning exercise allows for chain, production and support) and the enabling
greater impact on setting the annual business objec- processes (finance, human resources, information sys-
tives. Another issue that needs to be addressed is the tems, etc.). The particular nature of the enterprise to
definition of the boundaries of the enterprise to be be assessed will define its senior leadership, cus-
assessed. The “enterprise” may be a division of a tomers, suppliers, and other stakeholders at an enter-
major corporation, a particular site, a business unit, prise level.
Pre-assessment Preparation LESAT Kick-off Session
Those companies that have been involved with the A facilitated kick-off meeting is suggested as a means
Lean Aerospace Initiative at MIT will likely have a of introducing LESAT and bringing everyone to a
good understanding of the Lean Enterprise Model common level of understanding of the tool, its termi-
(LEM) and how it can be used to identify lean nology, the assessment process, the time schedule and
practices. A more recent LAI product, the anticipated utilization of the results. A set of
Transition-to-Lean (TTL) Guide and Roadmap may PowerPoint slides has been prepared by MIT that are
be new to many managers. It is strongly recom- available for use in this meeting. The slides can be
mended that the “Lean Focus Group” of each com- tailored to fit a particular company if desired.
pany re-familiarize themselves with the three vol-
umes of the TTL Guide. It is also recommended Attending this meeting should be the Enterprise
that the enterprise leaders/managers who will Leader and his/her management team. Each
participate in the self-assessment read Volume I of attendee will normally perform the assessment in col-
the TTL Guide, which is an executive overview and laboration with their own direct reports and key staff.
Volume II, that provides details about the TTL
Roadmap. (A brief overview of Lean is presented The facilitator should make clear the “ground rules”
in Appendix A and a brief introduction to TTL is for performing the assessment, distribute materials
presented in Appendix C.) It is also highly recom- and indicate the timetable for completion.
mended that a “Lean Advocate” be named who is
responsible for planning, coordinating, and facili- Although the meeting should be facilitated by the
tating the LESAT self-assessment. appointed LESAT Facilitator, the announcement of the
meeting should come from the Enterprise Leader. It
The LESAT Facilitator should assemble the materials should be clear to all that the Enterprise Leader is cham-
that will be used in the assessment. A LESAT pioning the transition to lean and this assessment.
Workbook (known as the “Blue Book”) containing the
maturity matrices will be required for each participant. Group Completion of the Assessment
Each of the Enterprise Leader’s management team will
The time horizon for achieving the “Desired Level” meet with his/her own direct reports and key staff to
for the various lean practices should be specified. complete the LESAT assessment matrices. As the
This not only will make the choices for desired levels assessment is performed, it must be remembered that
easier to determine, it will assure that there is con- the assessment is being made of the entire enterprise,
sistency among those who participate in the assess- not individual organizational units. Each group is to
ment. address all of the 54 lean practices in LESAT, not just
those directly applicable to the group’s mission. Prior
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Page 23 of 166
Part IV – Assessment Methodology Continued
to actually doing the assessment, it is highly recom- competitive level on each lean practice. The group
mended that each participant spend some time reaches consensus on current and desired levels for
reviewing the entire set of LESAT matrices so that their each of the 54 practices contained in LESAT. It is
overall intent is better understood. sometimes helpful to have the LESAT Facilitator pres-
ent during the assessment.
The group manager will schedule a meeting with
his/her direct reports and key staff to perform the Facilitation of Assessment
assessment. Clarification of any questions should be The LESAT Facilitator, as the “resident expert”, will
sought from the LESAT Facilitator. Each lean practice normally be available to assist the various groups in
in LESAT is analyzed and evaluated to determine the completing the assessment matrices. This assistance
current maturity level for the entire enterprise relative may range from attending and facilitating the group
to that practice meetings to simply being available to answer ques-
tions and provide guidance.
In arriving at the assessed current maturity level, a
determination is made as to which capability level Initial Summarization
depicts the organization’s present Lean status for that The LESAT Facilitator will gather the consensus inputs
practice. The rationale and supporting evidence for from the various groups and consolidate them for the
each assessment level should be recorded. This doc- entire enterprise. The inputs are typically entered into
umentation will help provide an ability to create cor- spreadsheets for summarization. The usual calcula-
rective action plans and will provide inputs for the tions for each practice include high, low and range of
continuous improvement effort. Additionally, it will current level and high, low and range of desired level.
help provide consistency for comparison of perform- Average current and average desired are calculated,
ance in subsequent assessments. along with the gap between average current and
average desired. Sub-totals by major groupings of
A determination is then made to specify the capabili- lean practices are sometimes useful. Pareto analyzes
ty level the organization is striving to attain in each of on current levels and gaps can reveal the key pressure
the practices. Although attaining Level 5 in all prac- points. Several examples of LESAT rollups are pre-
tices would be an indication of a very Lean enterprise, sented in Appendix E.
it may not be achievable given the fact that all enter-
prises have limited resources. Also, some practices LESAT Wrap-up Meeting
may not be applicable for a particular enterprise. The The Enterprise Leader, with the assistance of the LESAT
organization must look at its strategic goals and Facilitator, will schedule a meeting of the same man-
objectives, competitive advantages, available agement team who attended the LESAT Kick-off
resources and other factors, then decide its desired Meeting.
Assessment results across the entire enterprise will be depth examination of the assessment results will typically
presented, discussed and analyzed. The primary inter- involve a comparison to current business plans and ini-
est in the results is not so much that specific lean prac- tiatives. Appropriate adjustments can be determined.
tices were scored high or low, but in learning the regions
of the Transition-to-Lean Roadmap that need special Post-assessment Analysis and Action
attention. It is not uncommon, for example, for a par- Planning
ticular organization to assess itself at a low capability The use of the LESAT assessment results will vary among
level on several of the practices within the Roadmap different organizations. There will usually be some short
grouping “Adopt Lean Paradigm”. term “quick hits” that are suggested by the results. These
can be programmed and incorporated into on-going
In addition, the meeting can be used to seek clarification initiatives as appropriate. Care should be taken to
on lean practices having a wide range of responses. assure that any such short-term fixes are not inconsistent
Scores of level 1 (lowest capability) and level 5 (highest with the long-term lean vision.
capability) should be clarified and explained.
The principle use of the results will be to identify the
It is usually helpful at this meeting to identify and discuss more critical “gaps” that exist between current and
all lean practices having an average current capability desired maturity levels and to determine their impact on
level less than some value that the organization feels is the Enterprise Level Lean Transformation Plan. Changes
a threshold minimum. For example, the team may wish to the Enterprise Level Plan will almost certainly affect
to identify those practices scoring below, say 1.8 to one or more Detailed Lean Implementation Plans.
determine if there are common root causes underlying
these low scores. The executive may also wish to chal- The enterprise should look at the results from all the
lenge average current capability levels greater than, say practices, not each practice in isolation, to determine
3.5 by asking certain managers to convince him/her future courses of action. The key here is to analyze gaps
that their capability is really this great. against the enterprise business objectives so that becom-
ing Lean is not the goal but the means to achieve strate-
Gap analysis is commonly performed to identify lean gic objectives. It is important to identify enterprise wide
practices for which the gap between the calculated aver- resources available and then compare this against the
age lows and average highs is greater than 2. These estimate of resources needed so that the plans can be
indicate those practices for which much opportunity for prioritized. Leadership can determine which of the
improvement exists. Concentration of low current values practices are most crucial to their enterprise perform-
within certain LESAT sections and grouping of practices ance and attack these first. Particular attention should
often signify high priority areas for improvement. In- be paid to additional education and training needs.
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Page 25 of 166
Part IV – Assessment Methodology Continued
Improvement plans should become an integral part of replaced as better means are developed for perform-
the Enterprise culture. The initial planning for a Lean ing fundamental tasks. The Transition-to-Lean (TTL)
transformation will not be perfect and modifications Roadmap provides a structure and overall general
may be required. The self-assessment results will flow for transforming an organization over time.
highlight areas for improvement. Some of these There is no “ultimate lean state” beyond which
improvements may be effected fairly quickly within the improvements are no longer possible, so the
existing enterprise structure. Others will require sig- Roadmap reflects a never-ending journey.
nificant structural modifications. The TTL Roadmap
and Guide contains further guidance for the enter- Figures 11 and 12 are included as aids to visualizing
prise on how to develop corrective action plans and to these processes and their on-going relationships.
foster continuous improvement. It suggests a frame-
work in which the organization learns from past LESAT Checklist
behavior, strives to increase the focus on providing The several stages of the LESAT assessment process
value to the customer and continually adapts the plans that are explained above have been collected and
to continue the Lean journey. shown as a “checklist” in Figure 13. It is recom-
mended that all steps be followed, although a few are
Figure 10 is included, courtesy of Northrop marked as “optional”.
Grumman, as an illustration of how the TTL Roadmap
is linked to the LESAT assessment, which in turn pro- LESAT Assessment Aids
vides the basis for modifications to the Enterprise Level Appendix E contains a number of forms, formats,
Lean Implementation and Action Plans. sample meeting agendas, spreadsheet programs, etc.
that are intended to provide guidance and sugges-
The Continuous Improvement/Assessment tions for the LESAT Facilitator. Rather than prescribing
Cycle one single approach, alternatives are included for
One of the fundamental principles of the lean para- selection or modification. The examples shown in
digm is that waste elimination and process improve- Appendix E were among those that were utilized by
ments are never-ending endeavors. the companies who participated in the field tests of the
LESAT Beta version.
The Lean Enterprise Model (LEM) is a repository of
“best practices” that have been collected and organ-
ized according to the “Overarching Practices” of lean.
Today’s “best practices” will be improved further or
Figure 10
Figure 8

Initial
Lean
Vision
Lean
I.A. Lean Transformation/Leadership
Definition: Develop, deploy, and manage lean implementation plans throughout the enterprise, leading to: (1)- long-term sustainability, (2)- acquiring competitive advan-
tage, and (3)- satisfaction of stakeholders; along with a continuous improvement in all three parameters.

Enterprise Metrics Transformation
I.A. Enterprise Plan
Strategic Planning
The decision to pursue a lean transformation is strategic in nature. Its impact throughout the enterprise is profound and pervasive,
affecting all business practices and processes. The lean enterprise will behave in a fundamentally new manner, significantly eliminating waste and
enhancing relationships with all stakeholders.
Lean Roadmap Action Plan
• Are enterprise leaders familiar with the dramatic increases in competitiveness that many companies have realized as a result of transitioning to lean?
PROGRAM:
• Are enterprise leaders fully aware of the potential opportunities (i.e. greater growth, profitability and market penetration) that can be realized within their own
organization as a result of transitioning to lean?
Section I.A. Lean Transformation/Leadership
• Has a suitable strategy for growth been identified to utilize resources freed up by improvements?
• Does “customer value” strongly influence the strategic direction? Objective Impacts/Issues (to be completed by responsible person
• Has full leverage of the extended enterprise stakeholders been incorporated into the strategic plan?
The decision to pursue a lean transformation is Impact:
strategic in nature. Its impact throughout the
enterprise is profound and pervasive, affecting
Integration of Lean Level 1 Level 2 Level 3 4 Level 5
in Strategic
all businessLevel practices and processes. The lean
Concepts and benefits of Lean is recognized, but The growth implications of Transitioning to lean is Strategic plans leverage
Planning Process lean principles and practices relegated to lower levels lean are understood
enterprise and adopted
will as a key enterprise
behave the results of lean
in a fundamentally new
are not evident in culture of the enterprise and lean implementation plans strategy and included in the implementation to achieve
Lean impacts growth,
or business plans. application is fragmented. are formulated,
manner, strategic plan.
but not inte-significantly growth, profitability
eliminating wasteandand Issues:
profitability and grated into the strategic plan. market position.
market penetration enhancing D all stakeholders
❑C ❑D ❑C ❑D ❑ C ❑ D relationships ❑ C ❑with ❑C ❑D
Lean Indicators • Lean implementation is included explicitly in the enterprise strategic plan.
(Examples) • Strategic planning makes allowance for anticipated gains from lean improvements.
Responsibility:
Evidence
Opportunities
Success Criteria Major Milestones
• Enterprise leaders are aware of the strategic
opportunities associated with transitioning to a Task
“lean enterprise.”
01 02
1 2 3 4 1 2 3 4
• The enterprise is involved in defining and • Understanding Need
documenting the best methods for contributing for Change
to customer success. • Build Awareness
Within Senior
• The strategic planing process includes key Leadership Team
stakeholder’s needs form across the enterprise • Establish Enterprise
Strategy
© Copyright Massachusetts Institute of Technology, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies. All
other rights are reserved. Page 27 of 166
Figure 11
Continuous Improvement/Assessment Cycle
External Forces
Strategic Planning
Changing Customer External Inputs,
Values/Needs Benchmarking
Assess Current
Create Future
State Vision
Assess Current
Maturity Level Prepare the
Organization for
Specify Desired Change
Level
Create/Refine
Identify Utilize Best
Enterprise
Gaps/Prioritize
Actions
Changing Customer
Values/Needs
Execute Next
Cycle of Plan
LESAT TTL R O A D M A P LEM
© Copyright Massachusetts Institute of Technology, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. Page 28 of 166
Figure 12
Relationship of LEM, TTL and LESAT to Lean Transformation
External Input LEM

Principles and Practices
Best Practices
Lessons Learned
Best Practices
Calibration Lean
Transformation
Preparation Results
Staging
TTL LESAT
Assessment
Guide & Roadmap (Lean Principles, Practices & Behaviors) Self Assessment
© Copyright Massachusetts Institute of Technology, 2001. Copyright permission granted only for the right to use and reproduce unlimited copies.
All other rights are reserved. Page 29 of 166
Figure 13 LESAT ASSESSMENT PROCESS
Essential Optional
Pre-assessment Preparation
Determine timing of the assessment X
Administer a “test” of management’s understanding of Lean-

identify areas for education prior to using LESAT X
Conduct management Lean Education event X
TTL Exposure/Familiarization X
Facilitator
Enterprise leaders/managers who will participate in assessment
Assemble Assessment Material X
Enterprise leadership defines boundaries for assessment X
Define time horizon for Desired Level determinations X
LESAT Kick-off Session
Introductory presentation X
Define “Ground Rules” for assessment X
Distribute assessment materials X
Provide schedule for completion X
Provide contact point for assistance X
Group Completion of the Assessment
Read entire LESAT before starting X
Seek clarification from Facilitator X
Analyze each lean practice, determine current maturity
level for the entire enterprise. Note evidence to support this determination X
For the time horizon specified, determine the desired maturity level X
Discuss among members of the group to arrive at consensus X
Provide group results to LESAT Facilitator X
Page 30 of 166 other rights are reserved.
Essential Optional
Facilitation
Attend group assessment sessions X
Provide guidance, answer questions X
Initial Summarization
Consolidate inputs X
Prepare summaries, prepare for Wrap-up Meeting X
LESAT Wrap-up Meeting
Review of LESAT process X
Clarification of results X
Consensus on future direction X
Interpretation X
Alignment with other initiatives X
Areas for further study X
Next steps/actions indicated X
Post-assessment Analysis and Action Planning
Suggested quick hits X
Impact on Enterprise Level Lean Implementation Plan X
Adjustments to Detailed Lean Implementation Plans X
Re-deployment of resources X
Additional education and training X
Preparation for Next Assessment X
other rights are reserved. Page 31 of 166
Part V - LESAT Maturity Matrices
This part of the LESAT Facilitator’s Guide contains the Lean Maturity Matrices used in assessing the current sta-
tus of the enterprise in its lean transformation. The version included here includes the complete set of 54 lean
practices, the five level descriptions for each practice, Diagnostic Questions and Lean Indicators. The version of
the matrices contained in the LESAT Maturity Matrices follows the same organization, but contains all the infor-
mation for each practice as shown in Figure 4 in Part III. The LESAT Maturity Matrices version is designed for
actually entering data, marking up, etc.
Linkage of LESAT Section I to TTL Roadmap
The LESAT contains three major sections:
Section I – Enterprise Transformation/Leadership
Section II – Life-cycle Processes
Section III – Enabling Infrastructure Processes
Section I is tied directly to the Transition-to-Lean Roadmap. A TTL Roadmap diagram is included before each major
segment of Section I to indicate the Major Tasks that are being assessed at that point.
Section I: Lean Transformation/Leadership
I.A. Enterprise Strategic Planning
I.B. Adopt Lean Paradigm
I.C. Focus on the Value Stream
I.D. Develop Lean Structure and Behavior
I.E. Create and Refine Transformation Plan
I.F. Implement Lean Initiatives
I.G. Focus on Continuous Improvement
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Section I
Enterprise Strategic Planning
Adopt Lean Paradigm
Focus on the Value Stream
Develop Lean Structure and Behavior
Create and Refine Transformation Plan
Implement Lean Initiatives
Focus on Continuous Improvement

Lean Transformation/Leadership consists of the major elements contained within the Transition to Lean
(TTL) Roadmap. The TTL Roadmap describes a logical sequence of Primary Activities and the Major Tasks
required to complete each of these Primary Activities. The TTL Roadmap portrays the overall “flow” of
action steps necessary to initiate, sustain, and continuously refine an Enterprise Transformation based
upon Lean principles and practices.
Transition-To-Lean Roadmap: Enterprise Level
The Enterprise Level Transition-to-Lean Roadmap provides a general cycle. The second cycle is called the Long Term Cycle, in which the envi-
framework for assisting companies in their transition to Lean. It portrays ronment and conditions necessary for a successful Lean transformation are
an overall “flow” of action steps that can initiate, sustain, and continuous- created. The organization is then prepared for launching into detailed
ly refine the transformation of an Enterprise based upon Lean principles planning and implementation. The third cycle is the Short Term Cycle, in
and practices. which detailed implementation is planned, executed, and monitored. This
cycle has a fast clock speed, with ongoing action-monitoring-corrective
The Roadmap comprises three “cycles.” First is the Entry/Re-entry Cycle, action phases. The Long Term Cycle is re-entered periodically to capitalize
which specifies the actions associated with the decision to adopt the Lean on lessons learned during implementation and to accommodate changes
paradigm. This cycle is closely linked to the Enterprise Strategic Planning occurring in the dynamic external environment.

Page 35 of 166 TRANSITION-TO-LEAN ROADMAP: ENTERPRISE LEVEL
Enterprise Strategic Planning
Significant, fundamental shifts in the competitive environment cause each has a far different “look and feel;” indeed, it will “do business” (both inter-
affected enterprise to undertake a comprehensive review of its “collective nally and externally) in fundamentally new ways.
mental model.” This amounts to a thorough analysis and evaluation of its
fundamental structure and its relationship with the external environment. Lean implementation activities are enablers for achieving strategic objec-
tives and as such must be an integral part of strategic and operational
Many of the traditional assumptions underlying the Enterprise’s processes, plans. Full benefits of lean implementation are achieved when they
practices, policies, and behavior will no longer be valid. A lean enterprise encompass the extended enterprise.

Page 36 of 166 SECTION I - ENTERPRISE STRATEGIC PLANNING
I.A. Lean Transformation/Leadership
Definition: Develop, deploy, and manage lean implementation plans throughout the enterprise, leading to: (1)- long-term sustainability, (2)- acquiring competitive advan-
tage, and (3)- satisfaction of stakeholders; along with a continuous improvement in all three parameters.

The decision to pursue a lean transformation is strategic in nature. Its impact throughout the enterprise is profound and pervasive,
affecting all business practices and processes. The lean enterprise will behave in a fundamentally new manner, significantly eliminating waste and
enhancing relationships with all stakeholders.
• Are enterprise leaders familiar with the dramatic increases in competitiveness that many companies have realized as a result of transitioning to lean?
• Are enterprise leaders fully aware of the potential opportunities (i.e. greater growth, profitability and market penetration) that can be realized within their own
organization as a result of transitioning to lean?
• Has a suitable strategy for growth been identified to utilize resources freed up by improvements?
• Does “customer value” strongly influence the strategic direction?
• Has full leverage of the extended enterprise stakeholders been incorporated into the strategic plan?
Integration of Lean Level 1 Level 2 Level 3 Level 4 Level 5

in Strategic Concepts and benefits of Lean is recognized, but The growth implications of Transitioning to lean is Strategic plans leverage
Planning Process lean principles and practices relegated to lower levels lean are understood and adopted as a key enterprise the results of lean
are not evident in culture of the enterprise and lean implementation plans strategy and included in the implementation to achieve
Lean impacts growth,
or business plans. application is fragmented. are formulated, but not inte- strategic plan. growth, profitability and
profitability and grated into the strategic plan. market position.
market penetration
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Lean implementation is included explicitly in the enterprise strategic plan.
Evidence
Opportunities
SECTION I.A. - ENTERPRISE STRATEGIC PLANNING
Page 37 of 166
I.A.2. Focus on Level 1 Level 2 Level 3 Level 4 Level 5

Customer Value Means of defining value to Structured process for How the enterprise can Customer definition of value Competitiveness is
Customers pull value from customer(s) is informal and defining value is applied to best contribute to customer’s strongly influences the enhanced, as customer
unstructured. selected customers. success is well defined and strategic direction. value becomes the predomi-
enterprise value stream
incorporated into most nant driving force through-
projects/programs. out the extended enterprise.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Enterprise employs a formal process for determining customer value.
(Examples) • The enterprise understands what constitutes success for its customers.
• A formal process exists to measure and assess customer satisfaction.
• Customer value strongly influences policies, practices and behavior.
Evidence
Opportunities
I.A.3. Leveraging the Level 1 Level 2 Level 3 Level 4 Level 5

Extended Relations with customers Initial opportunities Strategic planning process Integration and balancing of Integration of the extended
Enterprise and suppliers reflect a identified for establishing explicitly includes stakeholder values are enterprise contributes to
“We-They” mentality. extended enterprise link- consideration of key achieved via collaborative innovation, growth,
Value stream extends from
ages. stakeholders in value supplier relations and increased profitability and
customer through the streams. strategic partnering. market position.
enterprise to suppliers
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Strategic planning is strongly influenced by stakeholder and customer value.
(Examples) • Strategic planning encompasses the total enterprise, including customer, alliances/partners, employees and suppliers.
• Risk and responsibilities are apportioned when leveraging the extended enterprise suppliers and partners.
Evidence
Opportunities
Page 38 of 166 SECTION I.A. - LEAN TRANSFORMATION/LEADERSHIP
Adopt Lean Paradigm
The Lean paradigm consists of many concepts, principles, and practices Lean requires a deep understanding of the fundamental aspects of an
that are counter-intuitive and diametrically opposed to those of mass pro- Enterprise and a vision for its interactions with the rest of the world. This
duction. Most of today’s business leaders climbed the ladder of success segment of the Roadmap provides a framework for acquiring an in-depth
while following the same mass-production practices they are now being understanding of Lean and for obtaining full commitment from Senior
asked to abandon. Managers to launch a Lean transformation.

Page 39 of 166 SECTION I.B. - ADOPT LEAN PARADIGM
Transitioning to lean requires a significant modification to the business model of the enterprise. It is imperative that the enterprise leadership
understands and buys into the lean paradigm since they will be required to create a vision for doing business, behaving and seeing value in fundamentally
different ways.
• Do enterprise leaders and senior managers understand the lean paradigm at the enterprise level?
• Do all senior leaders and management enthusiastically support a transformation to lean?
• Has a common vision of lean been communicated throughout the enterprise and within the extended enterprise?
• Has a compelling case been developed for the Lean transformation?
I.B.1. Learning and Level 1 Level 2 Level 3 Level 4 Level 5

Education in Little interest in learning Leaders are actively seeking The leaders are adopting Leaders contribute to the Lessons learned in
“Lean” for lean principles is evident opportunities to learn about lean learning and continu- development / refinement implementing lean are
Enterprise among enterprise leadership. lean. There is an initial ously applying lean princi- of the body of knowledge actively shared across the
grasp of the extent of the ples across the enterprise. about lean. organization and within
Leadership
paradigm shift for the the extended enterprise.
“Unlearning” the old, enterprise.
learning the new ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • A formal lean education process for senior leaders has been established.
(Examples) • Leaders regularly apply and use lessons learned in “lean”.
• Majority of enterprise leaders have received significant exposure and education in lean principles, practices and behavior.
Evidence
Opportunities
I.B.2. Senior Level 1 Level 2 Level 3 Level 4 Level 5

Management Level of commitment Senior management buys “Lean” is integral to enterprise- Senior leaders are Senior leaders and
Commitment among senior leaders and into group commitment; sen- wide meetings, senior staff championing the management mentor and
Senior management ior leaders / managers who meetings, etc.; senior transformation to lean foster lean champions
management is variable –
cannot or will not adapt are managers personally and within the enterprise. internally and through the
leading it personally some endorse while others
replaced. visibly lead lean transition. extended enterprise.
may actively resist.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • There is a consensus commitment supporting a transformation to lean.
(Examples) • Management provides support and recognition for positive actions
• Senior management are champions in transforming the enterprise.
Evidence
Opportunities
I.B.3. Lean Enterprise Level 1 Level 2 Level 3 Level 4 Level 5

Vision Senior leaders have varying Senior leaders adopt Lean vision has been Common vision of lean is Stakeholders have internal-
New mental model visions of lean, from none common vision of lean. communicated and is under- shared by the extended ized the lean vision and are
of the enterprise to well-defined. stood by most employees. enterprise. an active part of achieving it.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • The role that lean plays in achieving the vision is clearly defined.
(Examples) • The vision has been communicated to all levels and has extensive buy-in by most employees.
• The vision incorporates a new mental model of how the company would act and behave according to lean principles and practices.
Evidence
Opportunities
I.B.4. A Sense of Urgency Level 1 Level 2 Level 3 Level 4 Level 5

The primary driving Scan of environment Enterprise senior leaders Urgent and compelling case Urgent and compelling case Urgent and compelling case
force for Lean identifies competitive develop an urgent and for lean transformation has for lean is expanded to and for lean is expanded to and
threats and need for action. compelling case for the lean been communicated and the accepted by key suppliers. accepted throughout the
transformation. organization rallies behind it. extended enterprise.
-
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • A compelling business case for lean has been developed and communicated.
(Examples) • The implications and time scales of the vision have been translated for each area of the enterprise.
• Lean transformation progress is integral to leadership discussions and events.
Evidence
Opportunities
Focus On The Value Stream
A primary concept of Lean thinking is that all actions and resources of a Enterprise goals and metrics should also be expressed in terms of value-
firm should be focused on creating value for its customers. Any action or added, thereby better defining for the Enterprise how to capture the cus-
resource expenditure that cannot be associated with this goal is regarded tomer’s perception of value.
as waste and should be eliminated.
In a complex Enterprise, it is useful to visualize and consider the balance
It is helpful to visualize customers “pulling” value from the company, result- of the primary value streams that flow to all of the primary “stakeholders.”
ing in cascaded pulling actions back upstream across all Enterprise func- It is important to optimize across these value streams by taking a global
tions. The pulling action extends beyond the Enterprise to suppliers and systems view.
other external agencies.

Page 43 of 166 SECTION I.C. - FOCUS ON THE VALUE STREAM
Value creation with minimal waste becomes the primary driving force of the enterprise. The current means of delivering customer value are
documented, followed by improving the value stream by minimizing waste. Lean metrics are specified and stakeholder involvement clarified.
• Is a formal process utilized to explicitly determine “value to the customer”?
• Have the value streams of all stakeholders been mapped, integrated and balanced?
• Does the enterprise understand how material and information flow throughout the various elements of the enterprise?
• Are enabling infrastructure processes being aligned to value stream flow?
• Does the enterprise understand clearly how it currently delivers value to customers?
• Has a system of balanced performance measures been established that reflect progress towards strategic business objectives?
I.C.1. Understanding the Level 1 Level 2 Level 3 Level 4 Level 5

Current Value The documented process Key stakeholders and what Principal current value Depth and breadth of Updated value streams
Stream flow differs from the actual they value are identified. stream(s) are defined, knowledge of value stream and their independencies
How we now deliver flow. There is an initial Present processes are allowing the identification of elements and supporting are evaluated across the
understanding of the need mapped and initial analysis critical interactions. processes exposes extended enterprise.
value to customers
for formal mapping and is underway. Significant opportunities for interdependencies across
analysis. eliminating waste and creat- the enterprise.
ing value are identified and
aligned with the strategic
objectives.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • A formal process has been established for identifying customer and stakeholder value.
(Examples) • The practice and language of value stream mapping is recognized as an important part of an iterative improvement process.
• Current value streams of major customers/product lines have been mapped, and hand off points and interfaces clearly defined.
Evidence
Opportunities
I.C.2. Enterprise Flow Level 1 Level 2 Level 3 Level 4 Level 5

“Single piece flow” of Material and information Some primary flow paths Primary flow paths are Material and information Material and information
materials and information flows are disjointed and have been overhauled to simplified and aligned to the flow seamlessly throughout flow seamlessly and
“optimized” process by overcome significant barri- value stream(s), which the enterprise. responsively throughout
process. “Push” mentality ers to flow. allows information and the extended enterprise.
prevails. material to flow as required.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Information flows have been rationalized to assure interoperability among enterprise elements.
(Examples) • Material flow paths have been simplified and shortened to enhance flow.
• Information and material flows are responsive to stakeholder needs.
Evidence
Opportunities
I.C.3. Designing the Level 1 Level 2 Level 3 Level 4 Level 5

Future Value Management understands A concept for future value Future value stream(s) are Future value stream(s) are Future value stream(s) are
Stream that the present processes stream(s) design has been developed, which encom- refined to accommodate a refined to dynamically
Value stream to meet the do not meet the future lean created based on balanced pass future enterprise goals changing environment. accommodate a changing
enterprise objectives. stakeholder requirements. and satisfy stakeholder environment across the
enterprise vision
requirements. extended enterprise.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • A formal process has been established to identify how the enterprise can best deliver value to customers and stakeholders.
(Examples) • The future value stream(s) reflects new and improved ways to realize value and minimize non-value adding activities.
• Future value stream(s) designs have been generated for the primary value stream(s) and their supporting processes.
Evidence
Opportunities
I.C.4. Performance Level 1 Level 2 Level 3 Level 4 Level 5

Measures Performance measures are Baseline performance Performance measurement Measurement systems and A common target setting
Performance measures ad hoc, inconsistent and measures are established to system uses a minimal and target setting pulls and measurement process
focused on functional areas stimulate progress towards balanced set of measures performance improvement pulls performance
drive enterprise behavior
rather than value streams. the lean future state and based on strategic objectives throughout the enterprise. improvement across the
are visible throughout the and aligning local with extended enterprise.
enterprise. enterprise metrics.
-
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • A balanced and minimal set of performance measures are used to track lean implementation progress towards the strategic direction.
(Examples) • Performance measures used assure that local and enterprise measures are aligned.
Evidence
Opportunities
This section of the Roadmap deals with creating the mental model and mindset, must be relentlessly rooted out and banished. Lean principles
conditions within the Enterprise that will enhance the successful implemen- and practices must be learned, practiced, and perfected through continu-
tation of Lean principles and practices. ous improvement efforts, facilitated by change agents.
Both the structure and the behavior of Lean organizations are significant- Lean may have an impact on organizational structure. Incentives must be
ly different from those of mass-production organizations. The mass-pro- rationalized with the new behavior desired. There will be an impact on
duction mentality, so firmly embedded in the organization’s collective most business systems, processes, and policies.

Page 47 of 166 SECTION I.D. - DEVELOP LEAN STRUCTURE AND BEHAVIOR
Organization infrastructure must be assessed and modified prior to launching a lean initiative as well as throughout the transformation. Organizational
structure, incentives, policies, business systems and processes must be aligned and coordinated to elicit the behavior required for successful
implementation of lean principles and practices.
• Has an organizational structure been implemented that focuses on core processes along the customer value stream?
• Is organizational structure designed for flexibility and responsiveness to changes in the external environment?
• Are relationships with stakeholders based on mutual respect and trust?
• Have policies and procedures been revised to promote and encourage lean behavior?
• Have incentives been developed which are consistent with the behavior desired?
• Has decision-making been delegated to the lowest practical level?
• Is prudent risk taking encouraged?
• Are lean change agents positioned and empowered to provide guidance and leadership for the lean transformation?
I.D.1. Enterprise Level 1 Level 2 Level 3 Level 4 Level 5

Organizational The enterprise operates as Initial efforts are underway Partially deployed cross- Extensive cross-functional Cross-functional, process-
Orientation functional silos. to identify functional barri- functional organizational processes are implemented based orientation is aligned
Organize to support ers and understand their full processes are aligned with across the enterprise. across the extended
implications. enterprise value stream(s). Functional units now serve enterprise.
value delivery
as knowledge centers for
skill retention.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
• Functional barriers have been minimized.
Lean Indicators
• There is extensive use of cross-functional processes across the enterprise.
(Examples)
• Career progression potential exists across both processes and functions.
Evidence
Opportunities
I.D.2. Relationships Level 1 Level 2 Level 3 Level 4 Level 5

Based on Mutual Relationships tend to be Selective application of Stable and cooperative Mutual respect and trust Stakeholders modify behav-
Trust determined by organiza- enterprise perspective relationships exist across exists across the extended ior so as to enhance extend-
“Win-win” vs. “we-they” tional role, resulting in a results in breaking down of the enterprise; cooperative enterprise with equitable ed enterprise performance
“we-they” perspective. organizational barriers and relations are established sharing of benefits from (win-win).
developing mutual trust. with some enterprise partners. continuous improvement
initiatives.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Communication barriers based upon organizational position have been significantly reduced.
(Examples) • Stable and cooperative relationships exist among most enterprise stakeholders.
Evidence
Opportunities
I.D.3. Open and Timely Level 1 Level 2 Level 3 Level 4 Level 5

Communications Communication is largely Basic communication Enterprise leaders are Communication processes Comprehensive system of
Information exchanged top-down, limited and mechanisms are employed accessible and visible, are undergoing continuous two-way communication is
when required lagging. but are not uniform; developing two-way refinement and information employed throughout the
communication strategy is communications in open, is exchanged or can be extended enterprise.
under development. concise and timely form. pulled as required.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Open and timely communications exist among stakeholders. i.e. regular meetings with employees, newsletters, etc.
(Examples) • Technology has been leveraged to speed communications flow and accessibility, while filtering unnecessary communications.
• Employee input is valued and plays a key part in decision-making.
Evidence
Opportunities
I.D.4. Employee Level 1 Level 2 Level 3 Level 4 Level 5

Empowerment Centralized decision-mak- Appropriate structure and Organizational environment Decision processes are Decision-making across the
Decision-making at ing occurs in a hierarchical training is being put in and management system continually refined to extended enterprise is
lowest possible level structure with limited place to enable empower- supports limited decision- promote increased delegated to the point of
delegation of authority. ment. making at point of accountability and application.
application and need. ownership at point of use.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Managers and supervisors serve as mentors and educators, promoting lower level decision-making.
(Examples) • The extent and types of empowerment are tailored to match the environment and people empowered.
• Empowerment enables swift and effective decision-making closest to the point of use.
Evidence
Opportunities
I.D.5. Incentive Level 1 Level 2 Level 3 Level 4 Level 5

Alignment There is sporadic use of Incentives that reward and Executive compensation and Incentive systems successfully Lean incentives are
Reward the behavior you incentives and an aware- encourage lean behavior employee incentives are contribute to achievement deployed, with measurable
want ness that some incentives are deployed in some areas. linked directly to attainment and sustainability of lean success across the extended
discourage lean behavior. of lean objectives. objectives. enterprise.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Incentives include a balance of money and non-monetary rewards / recognition to encourage lean activity.
(Examples) • Incentives are based on performance measures that encourage lean activity.
• Incentives encourage local improvements that will benefit multiple processes or value steam performance.
Evidence
Opportunities
I.D.6. Innovation Level 1 Level 2 Level 3 Level 4 Level 5

Encouragement Innovation initiatives are Initial efforts are underway Innovation initiatives are Innovation initiatives are Comprehensive innovation
From risk aversion to sporadic and ad hoc; secu- to develop systems, process- underway in selected areas; flourishing across the program is implemented
risk rewarding rity, stability and risk aver es and procedures for fos- measures for assessing enterprise; prudent risk and positive results recog-
sion drive most decision- tering innovations. impact are in use. taking is encouraged nized across the extended
making. and rewarded. enterprise.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • The review process for suggestions has been streamlined and gives clear visibility of the progress of each suggestion.
(Examples) • Suggestion programs have been properly incentivized to give recognition to originators of innovative ideas.
Evidence
Opportunities
I.D.7. Lean Change Level 1 Level 2 Level 3 Level 4 Level 5

Agents Change agents are There is formal identification Appropriately skilled change Change becomes Change agents are provid-
The inspiration and sporadically distributed, but of change agents, along agents are assigned to key self-generating, initiated by ing a critical resource of
drivers of change without change authority. with role definition, authori- areas with the authority to employees as well as lean knowledge, skill and
ty delegation and program effect changes. change agents. experience in transforming
of education and training the extended enterprise.
for change agents.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Lean change agents have been designated and empowered.
(Examples) • Lean change agents operate throughout all areas and cross-transfer lean implementation experience.
• Process for developing “lean masters” and other change agents has been established.
Evidence
Opportunities
Create & Refine Transformation Plan
Having prepared the organization for implementing the Lean paradigm, will also draw heavily from the enterprise-level value-stream mapping per-
we are now in a position to develop, implement, and monitor a compre- formed in the “Focus on Value Stream” block.
hensive Enterprise-Level Plan to achieve the desired transformation.
Key enterprise transformation activities must be identified and prioritized.
The Enterprise-Level Plan must be designed to address the explicit “need” Critical resources (including education and training) must be assured.
previously established, thereby aligning the strategic and Lean visions. It

Page 52 of 166 SECTION I.E. - CREATE AND REFINE TRANSFORMATION PLAN
Identify, prioritize and sequence a comprehensive set of lean initiatives that collectively constitute the plan for achieving the desired transformation.
• Is the enterprise level lean transformation plan prioritized and aligned with strategic business objectives?
• Have adequate resources been provided to facilitate lean transformation?
• Does the current education and training program adequately support the strategic direction(s) and lean transformation?
• Have lessons learned and best practice been effectively incorporated within lean transformation planning?
I.E.1. Enterprise-Level Level 1 Level 2 Level 3 Level 4 Level 5

Lean Individual planning efforts Enterprise-level view Enterprise improvement Lean transformation plan is Lean transformation plan
Transformation are mostly bottom up initia- identifies lean implementa- plans are coordinated and continuously refined through balances mutual benefits
tives with little priority or tion projects, which are pri- prioritized across enterprise learning from implementa- of stakeholders across the
Plan
coordination established oritized to meet long and value stream(s), with a tion results and changing extended enterprise.
Charting the course
at enterprise level. short-term strategic objec- timeline for expected strategic requirements.
across the extended tives. measurable results.
enterprise
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • A process is in place to incorporate lessons learned into the enterprise-level lean transformation plan.
(Examples) • The milestone targets of the lean transformation plan are broken-down by section and deployed across the enterprise.
• Plans balance long-term and short-term stakeholder objectives for the best overall solution.
Evidence
Opportunities
I.E.2. Commit Resources Level 1 Level 2 Level 3 Level 4 Level 5

for Lean Little or no resources are Limited enterprise-level Resources are allocated as A pool of earmarked A pool of earmarked
Improvements provided for process resources are committed required for execution of the resources is provided for resources is provided for
Resource provision for improvement or waste and often applied to the lean transformation plan lean initiatives with minimal lean initiatives across the
elimination. symptom rather than the and prioritized across the justification required. extended enterprise.
lean
root cause. value stream.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Resources are committed to support the level and speed of lean transformation required.
(Examples) • Time to build on improvements by personal contribution is given at all levels.
• The procedure to apply for improvement resources has been simplified, and gives priority to improvements that benefit multiple areas.
Evidence
Opportunities
I.E.3. Provide Education Level 1 Level 2 Level 3 Level 4 Level 5

and Training There is little coordination Education and training cov- Education and training Education and training at all Education and training
Just-in-time learning of education and training ers a set of skills required to program is comprised of a levels is periodically program supports the
programs to facilitate support the lean balanced and sequenced set reviewed to check alignment upcoming needs of the
change. transformation projects. of elements to support the and suitability to the lean extended enterprise
coordinated transformation transformation plan. transformation plan.
plan.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Education and training programs, including refreshers, are provided on a just-in-time basis.
(Examples) • Education and training has a balanced and sequenced set of elements to support the lean transformation plan.
• The application of lean principles learned in training and education is formally appraised.
Evidence
Opportunities
The Enterprise-Level Transformation Plan created in the previous segment lower-level plans. The lower-level plans are prioritized and time-phased
provides the broad parameters and directions for achieving the changes resources are provided within the framework of a comprehensive sched-
required to respond to the identified critical needs. Within these parame- ule. These plans are executed and monitored. Short-term corrective
ters and overall schedule, specific short-term action plans and programs action is determined and incorporated as necessary.
are now developed. Detailed plans at the Enterprise level are linked to

Page 55 of 166 SECTION I.F. - IMPLEMENT LEAN INITIATIVES
I.F. Implement Lean Initiatives
Flow down the enterprise-level plan into specific actions, programs and projects that are executed within each process organizational area and
determine how they are integrated at the enterprise level.
• Has the enterprise level lean transformation plan been translated into detailed execution projects?
• Has a uniform system been established to track the progress of lean initiatives with respect to the overall plan?
• Do lean initiative plans contain a feedback mechanism for revision and to share lessons learned?
I.F.1. Development of Level 1 Level 2 Level 3 Level 4 Level 5

Detailed Plans Improvements are generally Key goals of the enterprise Detailed lean implementa- Detailed lean implementa- Implementation plans from
Based on optimized for individual lean transformation plan are tion plans supporting the tion plans accounting for extended enterprise are
areas and employees can understood by most enterprise level plan are any interdependencies are coordinated with and
Enterprise Plan
not clearly see the links employees. Process owners developed and coordinated refined and integrated support the lean
Coordinating lean
between localized and are involved in developing across processes. across the enterprise. Best transformation plan.
improvements enterprise goals. detailed plans linked to the practices are shared.
goals/strategic objectives of
the enterprise plan.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Detailed implementation plans are aligned to milestone targets of the enterprise-level plan.
(Examples) • A process is in place to incorporate lessons learned in detailed implementation plans.
• Detailed improvement plans are coordinated throughout the enterprise where shared implications exist.
Evidence
Opportunities
I.F.2. Tracking Detailed Level 1 Level 2 Level 3 Level 4 Level 5

Implementation Results of process Process is under There is a project The project management The project management
Assessing actual improvement initiatives are development to permit management process process can readily assess process is deployed across
outcomes against goals observed but not quantified. tracking and quantification implemented to track detailed plans and can the extended enterprise to
of progress of the detailed progress of detailed lean accommodate revisions enable real-time tracking.
lean implementation. Data projects against milestones, mandated by changes to
from some projects is being with feedback provided to the enterprise level lean
reviewed. enterprise level. Appropriate transformation plan.
corrective action is initiated
within individual projects.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Lean initiatives are coordinated and tracked, with the individual results “rolled up” and assessed against enterprise level milestones and targets.
(Examples) • The responsibility and accountability for improvement success is assigned locally to enable fast corrective action on deviations from the plan.
• Changes to processes / value stream map(s) are documented and updated regularly.
Evidence
Opportunities
Focus On Continuous Improvement
This “oversight” segment is critically important for long-term effectiveness called for, the flow will proceed along a second path, to the segment
and continuity. Only when the activities in this segment become a natural “Focus on the Value Stream”, taking us back to the Long Term Cycle.
part of the Enterprise’s culture can the organization achieve a significant
state of being Lean. The organization will learn from various implemen- When the Lean transformation process becomes recognized as a keystone
tation initiatives. Modifications will be required and fed back through the within the Enterprise’s strategic plan, a third flow path may occur through
“Create and Refine Transformation Plan” segment. the segment “Enterprise Strategic Planning” in the Entry/Re-entry Cycle.
This occurs when the results of lean implementation directly impact the
On those occasions when significant structural modifications seem to be strategic planning process.

Page 58 of 166 SECTION I.G. - FOCUS ON CONTINUOUS IMPROVEMENT
Successful execution of lean implementation plan forms the basis for further improvement. The improvement process is monitored and nurtured,
lessons learned are captured, and improved performance becomes a strong driving force for future strategic planning by enterprise executives.
• Are guidelines for continuous improvement sufficiently developed for effective facilitation of enterprise-wide transformation plans?
• Are enterprise participants being challenged to build-on and sustain existing improvements?
• Are senior managers actively involved in monitoring progress of lean implementation at all levels?
• Is appropriate support and encouragement being provided to all participants in lean implementation?
• Are lessons learned being captured in a consistent, systematic manner?
• Are lean implementation results impacting strategic planning?
I.G.1. Structured Level 1 Level 2 Level 3 Level 4 Level 5

Continuous Improvement initiatives are An improvement process for Systematic, structured Structured continuous Structured continuous
Improvement ad hoc and not data driven. the enterprise is broadly methodology for continuous improvement process is improvement process is fully
Processes defined and being selective- improvement and value deployed at all levels across ingrained throughout the
ly applied. creation is developed and the enterprise, using value extended enterprise.
Uniformity in how
deployed across many analysis to target
we get better areas. improvements.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • A consistent improvement/transformation approach is implemented, sustaining improvements gained.
(Examples) • The continuous improvement process challenges people to tackle the root cause, rather than the symptom.
• Lean principles are being applied to most enterprise systems and processes, utilizing lessons learned.
Evidence
Opportunities
I.G.2. Monitoring Lean Level 1 Level 2 Level 3 Level 4 Level 5

Progress Enterprise leaders are not Implementation plan A formal methodology is used Results of implementation Senior managers monitor
Assessing progress actively involved in the progress is reviewed against by enterprise leaders to ana- projects are aggregated to lean progress throughout
toward achieving enter- review of overall lean enterprise level milestones lyze the overall progress permit reallocation of the extended enterprise.
implementation plan and success criteria, for across all lean implementation resources and to ensure Results are impacting
prise objectives
progress. some projects. projects. Current plans are on-going alignment with future enterprise strategic
adjusted based on learning strategic objectives. planning.
from lean implementations.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Lean transformation progress is judged by the aggregate benefits, not individual or localized improvements.
(Examples) • Leaders actively participate in monitoring implementation progress and addressing deficiencies within the transformation plan.
• Lean progress reviews are documented in a common format and disseminated.
Evidence
Opportunities
I.G.3. Nurturing the Level 1 Level 2 Level 3 Level 4 Level 5

Process There is growing awareness Some senior managers are Managers seek to identify Senior managers across the Senior executives and
Assure executive level that successful lean imple- providing encouragement, and remove barriers to lean entire enterprise are highly managers champion and
involvement mentation is highly depend- support and recognition, implementation. Teams and visible in their involvement, nurture a culture of
ent upon senior manage- which is not consistent individuals who successfully support and encouragement continuous improvement in
ment support and encour- across the enterprise. implement lean practices are of the lean initiative. An the extended enterprise.
agement. recognized and rewarded. enthusiastic atmosphere is
evident.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Management actively supports and is involved in ensuring the success of improvements.
(Examples)
• Positive actions and the effort taken are recognized and rewarded, even if improvements are not fully successful.
Evidence
Opportunities
I.G.4. Capturing Lessons Level 1 Level 2 Level 3 Level 4 Level 5

Learned Lessons learned from Lessons learned in some A formal process for readily Lessons learned are A formal knowledge
Ensuring that successes improvement activities are areas are documented and capturing and communicat- consistently captured, management process is
lead to more successes not documented, residing maintained in paper files, ing lessons learned is being communicated and regularly adopted. Lessons learned
only in the memories of design rulebooks, etc. applied. Employee used in a structured manner. are routinely and explicitly
participants. contributions are actively An enterprise knowledge incorporated into the formu-
sought. base is created. lation of new lean initiatives.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • “Best” practice, suggestions and lessons learned are maintained in a concise and clear standard format.
(Examples) • A formal process has been established throughout the enterprise for capturing and reusing lessons learned.
• Lessons learned are periodically reviewed to maintain relevance of information kept.
Evidence
Opportunities
I.G.5. Impacting Level 1 Level 2 Level 3 Level 4 Level 5

Enterprise Strategic Results of lean Benefits of lean Executive management Forecasted improvements Executive management
Planning implementation are not fed implementation are considers potential impact of from lean implementation integrates forecasted future
Results lead to strategic back to strategic planning beginning to influence the performance improvement are incorporated into enter- results of lean implementa-
process. strategic planning process. initiatives in its assessment prise planning and budget- tion in its assessment of new
opportunities
of new business ing decisions. business opportunities and
opportunities. potential market impact.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Business results reflect improvements resulting from lean implementation.
• Gains realized from lean implementation are leveraged to achieve growth, profitability, market position and employment stability.
Evidence
Opportunities
Section II: Life Cycle Processes

II.B. Requirements Definition
II.C. Develop Product and Process
II.D. Manage Supply Chain
II.E. Produce Product
II.F. Distribute and Service Product
Page 62 of 166 SECTION II - LIFE CYCLE PROCESSES
Section I

Business Acquisition and

Program Management
Requirements Definition
Develop Product and Process
Manage Supply Chain
Produce Product
Distribute and Service Product
Life Cycle Processes are defined by the product life cycle, from initial con- cy. Enterprise Leadership provides the direction and resources to break
ception through operational support and ultimate disposal. As shown down the barriers among and within Life Cycle processes that result in
above, these processes directly determine the value provided to customers wasted resources and reduced value to customers and stakeholders. This
and stakeholders alike. The degree to which an enterprise is successful in section of the LESAT addresses the level of lean implementation applicable
making these processes lean is a measure of its effectiveness and efficien- to these Life Cycle processes.
Page 63 of 166 SECTION II - LIFE CYCLE PROCESSES
LIFE-CYCLE PROCESSES
Definition: Implement lean practices across life-cycle processes for defining customer requirements, designing products and processes, managing supply chains,
producing the product, distributing product and services, and providing post delivery support.

To be successful in the globally competitive environment of the twenty-first century, enterprises must develop and manage partnerships with their
customers and be able to dynamically re-configure and align core competencies among suppliers, the enterprise and its partners in order to deliver
best life cycle value to customers.
• Are new business opportunities arising from lean enabled capabilities being fully exploited?
• Does customer feedback and usage data drive new business process development?
• Are assets allocated across the value stream in a consistent and balanced manner?
• Are program risks and resource requirements balanced to assure optimal flow throughout the product life cycle?
• Are skills and resources drawn from across the extended enterprise to enhance program development efforts?
II.A.1 Leverage Lean Level 1 Level 2 Level 3 Level 4 Level 5

Capability for Business improvement Improvement gains provide Benefits sustained from There is full use of the The strategic plan dynami-
Business Growth initiatives are ad hoc and resources to facilitate future applying lean thinking with- enhanced capabilities and cally incorporates extended
Exploiting new business are focused on operational improvements. Potential in the enterprise are used to customer knowledge enterprise capabilities and
efficiency. business opportunities from retain current business throughout the enterprise to stakeholder interests to
opportunities arising from
applying lean thinking and/or win new business. leverage opportunities for identify and leverage
lean enabled capabilities across core competences competitive advantage. opportunities.
are recognized and plans
have been developed.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Reduced cost, increased quality and faster response times from waste eliminated are used to maintain or win new business.
(Examples) • The ability to improve and refine processes quickly is used extensively to respond to changing customer requirements.
• A process is used to scan the competitive environment to exploit opportunities arising from the enhanced capabilities of the lean enterprise.
Evidence
Opportunities
Page 64 of 166 SECTION II.A. - BUSINESS ACQUISITION AND PROGRAM MANAGEMENT
II.A.2. Optimize the Level 1 Level 2 Level 3 Level 4 Level 5

Capability and Utilization of people and There is evidence of ad hoc An enterprise approach As a result of the applica- The ability exists to easily
Utilization of material assets is optimized cooperation between provides consistent and tion of lean concepts and and quickly shift or divest
within functional units. functional units to eliminate balanced asset allocation techniques, assets are freed resources to new
Assets (People,
waste and share resources. across the value stream. up to be applied across the opportunities.
equipment, facili- enterprise to support current
ties, etc.) or growth activities.
Lean enables business
growth through the
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
redeployment of assets
Lean Indicators • Assets freed up from lean implementation are readily redeployed.
(Examples) • Workforce and its knowledge is nurtured, reallocated and maintained where possible.
• Available assets and resources are coordinated throughout the enterprise to leverage resources to the maximum.
Evidence
Opportunities
II.A.3. Provide Capability Level 1 Level 2 Level 3 Level 4 Level 5

to Manage Risk, Programs are managed and There is a management Program reviews assess risk The programs are reviewed Risk abatement processes
Cost, Schedule and staffed as independent system to monitor and within individual programs assessing the risk across the are used to optimize
Performance entities. control program perform- and staffing is adjusted as portfolio of programs with performance of the
ance and staffing. Regular necessary to mitigate risk. appropriate reallocation of portfolio of programs.
Success follows effective
reviews focus on cost, resources.
risk management schedule and performance
of individual programs.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Programs and process reviews have a portfolio approach to achieve enterprise balance.
(Examples) • A risk management process is fully integrated across the enterprise.
Evidence
Opportunities
II.A.4 Allocate Resources Level 1 Level 2 Level 3 Level 4 Level 5

for Program Program development Some but not all skills / Some of the skilled Resources and skills are “Virtual organizations” are
Development efforts rely on functional resources necessary are resources are routinely routinely balanced and created as needed from the
Efforts units for allocation of the dedicated and assigned to shared across programs. shared across the portfolio extended enterprise and
required skills. program development. Formal methods are being of programs. provided with the skills and
Teaming for success
Skilled resources are developed for determining resources necessary to
narrowly guarded within team makeup and assign- execute the development
programs. ment of necessary skills. effort(s).
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • A process is defined and used to ensure that cross-disciplinary skills are represented on teams.
(Examples) • Resources and skills are easily and quickly shifted or divested to balance requirements across all program development efforts.
Evidence
Opportunities
Customer needs and values must be assessed continuously and translated into requirement statements that form the basis for product and process design.
• Are the customer’s needs continually evaluated in determining product and process requirements?
• Is a data collection and customer feedback process defined and deployed?
• Is product life-cycle data used in determining requirements and subsequent specifications?
• Are product and process capability data matched to design criteria?
II.B.1. Establish a Level 1 Level 2 Level 3 Level 4 Level 5

Requirement Requirements are defined Requirements definition Requirements definition An iterative requirements The requirements process
Definition Process internally based on past process, which balances process leverages value definition process spans is a strategic advantage for
experience, rather than on cost, schedule and perform- chain capabilities and focus- the value chain resulting in the extended enterprise
to Optimize
a formal requirements ance, is partially developed, es on overall life cycle impli- a minimal set of require- contributing to increased
Lifecycle Value definition process. deployed and documented. cations. ments that balances cost responsiveness and new
Stakeholder pull vs. and performance. business opportunities.
technology/product push
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • There is a process in place to determine clear and concise product and life cycle requirements, with acceptable ranges.
(Examples) • The process ensures a balanced representation from all disciplines across the value chain.
• Structured methods are used to elicit and gather needs from the different stakeholders/customers.
Evidence
Opportunities
Page 67 of 166
SECTION II.B. - REQUIREMENTS DEFINITION
II.B.2. Utilize Data from Level 1 Level 2 Level 3 Level 4 Level 5

the Extended Warranty claims and A proactive process is being Data are collected on Process allows real-time The process is established
Enterprise to deficiency reports represent developed to collect product usage, maintenance, dispos- access, collection and across the extended
Optimize Future the primary source of data usage data as the basis for al and future needs from dissemination of data enterprise to actively seek
that is collected and ana- future requirements. across the present value from across the extended data on needs, usage and
Requirement
lyzed for impacts to present chain and fed into future enterprise for analysis by process capability to popu-
Definitions requirements. design solutions and stakeholders for future use. late a data repository that
Closed loop processes requirement definitions. can be mined for future
are in place to capture requirements.
operational performance
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
data
Lean Indicators • Customer feedback is actively sought and provided as input to the requirements definition process.
(Examples) • A database of usage, maintenance and disposal data is maintained and extensively used to establish future requirements definitions.
• Enhanced knowledge of customer and stakeholder requirements and desires is used to leverage future requirements.
Evidence
Opportunities
Page 68 of 166 SECTION II.B. - REQUIREMENTS DEFINITION
II.C. Develop Product and Process
Product and process design decisions must be based upon value quantifications and tradeoffs that incorporate inputs from affected stakeholders.
• Is the product development process formalized and understood?
• Are customers and other lifecycle stakeholders regularly involved in product and process development?
• Are downstream stakeholder issues in design and development considered and incorporated as early as possible in the process?
• Have most of the unnecessary iterations in the development cycle been removed?
• Has the development cycle been simplified and aligned to the critical path?
• Are products and processes being developed concurrently?
II.C.1. Incorporate Level 1 Level 2 Level 3 Level 4 Level 5

Customer Value Customer inputs are Customer inputs are The customer(s) are formally The customer(s) are actively The customer(s) are routinely
into Design of captured only at the considered qualitatively represented on Integrated involved with the IPT at involved with IPT with effective,
Products and beginning of the through top-level liaison Product Teams (IPT) and multiple levels to jointly continuous communication.
development. and occasional reviews. feedback mechanisms exist improve the effectiveness Sharing of benefits is well
Processes
to facilitate timely design and quality of the product established; value quantifica-
Understanding customer
iterations. and process design. tion and tradeoffs are a con-
value allows continuous tinuous and automatic part of
improvement of product the process.
and process
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Customer inputs are sought and used actively throughout the development process.
(Examples) • Designs satisfy customer value requirements, without unnecessary functionality.
Evidence
Opportunities
Page 69 of 166 SECTION 11.C. - DEVELOP PRODUCT AND PROCESS
II.C.2 Incorporate Level 1 Level 2 Level 3 Level 4 Level 5

Downstream Manufacturing issues are Manufacturing and assem- Multi-functional teams Priorities of downstream Downstream stakeholders’
Stakeholder Values considered late in design. bly issues are considered include some downstream stakeholders are quantified values in the extended
(Manufacturing, earlier in projects, but in an disciplines and key as early as possible in enterprise are quantified,
ad hoc manner. Supplier suppliers. design, and used for and balanced via tradeoffs,
Support, etc.) into
and cost considerations are process evaluation and as a continuous part of the
Products and limited. improvement. process.
Processes
Understanding downstream ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
stakeholders allows value to
flow seamlessly to customer
Lean Indicators • There is early consideration and incorporation of downstream stakeholders issues throughout design development.
(Examples) • The scope of considerations integrated into designs has been extended to include manufacturing, assembly, serviceability and cost implications.
• Products are easier to produce and have lower life-cycle costs.
Evidence
Opportunities
II.C.3 Integrate Product Level 1 Level 2 Level 3 Level 4 Level 5

and Process Development is performed Multidisciplinary develop- Multidisciplinary develop- Multidisciplinary techniques Product and process
Development in functional organizations. ment is used to a limited ment is used extensively; are deployed for most definition is seamlessly
Breaking down of func- extent. metrics are established for programs/product integrated both internally
process evaluation. development efforts; and with the upstream and
tional silos enables seam-
metrics are used for process downstream stakeholders.
less communication and evaluation and improvement.
value flow
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Resources and skills are balanced across projects and programs, to aid maximum re-use and sharing of knowledge.
(Examples) • Suitability and timing of design information released, is matched to the requirements of subsequent processes.
Evidence
Opportunities
Page 70 of 166 SECTION 11.C. - DEVELOP PRODUCT AND PROCESS
II.D. Manage Supply Chain
Internal enterprise core competencies are aligned with those of suppliers such that the customer value chain is optimized throughout the
extended enterprise.
• Have the number of suppliers been reduced to a level that can be effectively managed?
• Do contractual arrangements enable supplier flexibility and adaptation to both expected and unexpected changes?
• Are in-house capabilities balanced with supplier capabilities to optimize network-wide performance?
• Have opportunities for supply chain development been fully exploited?
• Are constraints and bottlenecks throughout the extended enterprise identified and rapidly resolved to ensure continuous flow?
• Are supplier partnerships and strategic alliances established to strengthen dynamic competitive advantage?
II.D.1 Define and Level 1 Level 2 Level 3 Level 4 Level 5

Develop Supplier Large number of direct The supplier base has been Supplier network is defined Strategic outsourcing and Supplier network is defined,
Network suppliers in an hierarchical rationalized to focus on key based on strategic analysis make-buy decisions focus developed and integrated
structure. There is little suppliers with high impact of value creation processes on achieving an optimal to ensure efficient creation
Core competencies
evidence of a defined sup- on strategic objectives. internally and across combination of core of value for enterprise
aligned across supplier
plier strategy and limited suppliers. competencies both within stakeholders over the
network knowledge of the the enterprise and across entire product lifecycle.
relationships within the the supplier network.
supplier network.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • The supplier network is defined and developed in line with the strategic plan to ensure efficient creation of value for all enterprise stakeholders.
(Examples) • Supplier expertise and capabilities complement enterprise core competencies; unnecessary overlap and duplication has been removed.
• Supplier network is flexible and can quickly adapt to changing requirements and unanticipated disruptions.
Evidence
Opportunities
Page 71 of 166 SECTION II.D. - MANAGE SUPPLY CHAIN
II.D.2. Optimize Network- Level 1 Level 2 Level 3 Level 4 Level 5

Wide Performance Supplier relationships are at Formal processes are in Common objectives, roles Strategic alliances with key Supplier capabilities are
Partnering with key suppli- arm’s length and adversarial. place for supplier assess- and responsibilities are suppliers emphasize a high dynamically optimized to
Purchasing department ment and approval. Long- established and communi- degree of information- shar- ensure efficient value
ers and optimizing manages a large number of term purchase agreements cated, with a few supplier ing, risk-sharing & benefit creation and building
processes to achieve cus- short-term, lowest-bid focus on cost reduction. partnerships or strategic sharing. For others a differ- durable competitive
contracts. Limited visibility into supplier alliances in place. Early entiated set of strategies and advantage, creating
tomer value
business processes. involvement of key practices are in place. flexibility and responsive-
suppliers in design and Production and delivery ness to shifts in the market-
development. are synchronized across the place.
supplier network.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Formal processes are in place for supplier assessment and approval.
(Examples) • Roles and responsibilities are clearly defined in contractual relationships, and risk and reward shares agreed upon.
• Production and delivery are synchronized throughout the supplier base to ensure continuous flow, with minimal waste.
Evidence
Opportunities
II.D.3. Foster Innovation Level 1 Level 2 Level 3 Level 4 Level 5

and Knowledge- Primary focus on internal Internal organizational Technology roadmaps Knowledge transfer mecha- Mutually-beneficial arrange-
Sharing capabilities, with little cog- structures and processes are include suppliers in pur- nism is created for open ments are established to fos-
nizance of tacit (experi- established to leverage sup- suance of common strategic and rapid access throughout ter innovation across suppli-
Throughout the ence-based) or explicit plier-based knowledge and vision. Shared metrics for the supplier network. ers. A process for on-going
Supplier Network (formal) knowledge across innovation. continuous improvement are communication of needed
suppliers. utilized.
Incentivizing innovation & changes in vision, strategy,
technology transfer metrics and implementation
is in place.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Long-term collaborative relationships are established and maintained where possible.
(Examples) • Processes to facilitate sharing and transfer of innovation, knowledge and technology are deployed.
• A mutually beneficial continuous improvement process is established throughout the supplier network over the entire product lifecycle.
Evidence
Opportunities
Page 72 of 166 SECTION II.D. - MANAGE SUPPLY CHAIN
II.E. Produce Product
The production system must be designed and managed according to the principles and practices of the lean production paradigm.
• Is production knowledge and capability regarded as a strategic competitive advantage?
• Has enterprise strategy been aligned with manufacturing capability?
• Are products pulled in accordance with customer demand in real-time?
• Have the production processes been ordered and adapted for flow?
• Are inventories maintained at minimal levels throughout the production process?
II.E.1 Utilize Production Level 1 Level 2 Level 3 Level 4 Level 5

Knowledge and Production capability is not Production knowledge and Production capabilities are Manufacturing system Production knowledge is
Capabilities for understood outside the capabilities are captured understood and utilized design is integrated with leveraged across the
Competitive manufacturing organization. and used to influence across the enterprise. strategic make/buy deci- extended enterprise to
manufacturing strategy Enterprise strategy and sions across the enterprise generate strategic
Advantage
including make/buy manufacturing capabilities and aligned with enterprise opportunities for value
Strategic leveraging of decisions. are aligned. strategy to create competi- creation.
manufacturing capability tive advantage.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Production capability constitutes a major consideration in enterprise level long-range, strategic planning.
(Examples) • Knowledge of production capabilities are maintained and shared throughout the extended enterprise.
Evidence
Opportunities
Page 73 of 166 SECTION II.E. - PRODUCE PRODUCT
II.E.2. Establish and Level 1 Level 2 Level 3 Level 4 Level 5

Maintain a Lean Production system operates Production system operates Product flow paths are Selected products are Work is segmented and
Production System on a batch and queue with a batch and queue identified and key elements produced using a flow sys- organized along the value
Defect free production schedule with high in- schedule with limited cellular of the layout have been tem pulled directly by cus- stream flows to achieve
process inventory, with or in-line layouts to improve reordered enhancing flow tomer demand (take time), defect free production upon
pulled by the customer
quality based on inspection flow. and reducing in-process which includes key suppliers. demand through the
rather than prevention. inventory, with some implementation of pull from
suppliers delivering to point customer through material
of use where appropriate. suppliers.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Conversion to lean has freed up floor space, equipment, human resources and capital for re-deployment.
(Examples) • Inventory levels have been reduced in line with gains made to process stability and variation reductions.
• Work is performed only when “pulled” from subsequent “customers” in the value chain.
Evidence
Opportunities
Page 74 of 166 SECTION II.E. - PRODUCE PRODUCT
II.F. Distribute and Service Product
On-time deliveries of defect free products are complemented by superior post delivery service, support and sustainability.
• Are production schedules and capacity considered prior to making a sales/contract commitment?
• Are product delivery data flowed throughout the value chain?
• Does the organization satisfy customer maintenance requirements effectively?
• Are in-service usage data deployed to appropriate personnel?
• Are customer rejects/returns treated as opportunities?
II.F.1. Align Sales and Level 1 Level 2 Level 3 Level 4 Level 5

Marketing to Marketing pushes product Marketing provides Products are supplied in Matching real-time customer Actual and future
Production sales/bids with little production with partial smaller more frequent demand and delivery prospective orders are
Matching demand consideration of current visibility to current and batches, balancing orders to requirements with matched in real-time with
production capacity. future potential order base. current production capacity. production capabilities, production capabilities
and capabilities
Order base not aligned to Most running orders are using extensive knowledge throughout the extended
production capacity. fully visible to production. base of customer preferences. enterprise.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Sales / bids are aligned to current and future production capacity and capabilities.
(Examples) • There is constant feedback and input between sales/marketing and production elements across the enterprise.
• Sales / bids commit product delivery to real-time customer demand, without the use of buffer stocks.
Evidence
Opportunities
Page 75 of 166 SECTION 11.F. - DISTRIBUTE AND SERVICE PRODUCT
II.F.2. Distribute Product Level 1 Level 2 Level 3 Level 4 Level 5

in Lean Fashion Distribute from inventories Distribute in smaller batch Product distribution from low Defect free items are Defect free distribution on
Right product, right by batch; customer inspects sizes more frequently in line stock levels is triggered by produced and delivered demand is achieved via the
quantity at the right time products upon receipt. with increased reliability. an internal pull system; without receipt inspection implementation of customer
There are programs in place some products are delivered to real-time customer usage; pull from end customer
to reduce customer receipt directly to point of use with customers are given access through material suppliers.
inspection. limited inspection. to databases for order status
visibility.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Point of use delivery to customers with minimal receipt inspection has become standard practice.
(Examples) • Deliveries are synchronized to minimize goods in transit and transportation requirements.
• Delivery cycle is shorter and more reliable.
Evidence
Opportunities
II.F.3 Enhance Value of Level 1 Level 2 Level 3 Level 4 Level 5

Delivered Products Product support system Support system delivers Support system flow paths Standardized customer and Customer needs for post-
and Services to reacts to customer needs, products / services on time, are identified and are product support processes delivery products / services
Customers and the usually on-time and from but with disruptions to beginning to be integrated provide responsive are anticipated in enterprise
inventory. production flow and with lean product information and product plans and fulfilled by adap-
Enterprise
associated resources. development and flow fully integrated with tation and extension of
Responding to the voice production flows. development and production capabilities already
of the customer flows. provided.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Solutions to product / service issues are coordinated throughout the extended enterprise to find fast, cost effective solutions.
(Examples) • Customer and product support processes have been standardized and are regularly reviewed against customer feedback.
• Disruptions to design and production flow from support services has been minimized.
Evidence
Opportunities
II.F.3 Provide Post Level 1 Level 2 Level 3 Level 4 Level 5

Delivery Service, High level of spares Collection of data on failure The enterprise is increasing- The enterprise is part of the The enterprise has become
Support and necessary because of trends permits both ly involved in addressing customer’s maintenance part of customer’s business
Sustainability unknown failure rates and determination of service customer maintenance solu- solution by ensuring solution via warranting of
long lead times for spare interval points for tions. Spare levels are availability through replace- product performance.
Providing customer
replenishment. preventative maintenance reduced through common ment of critical components
solutions and a reduction of spare platforms; root cause analy- before failure.
part levels. ses are fed back into prod-
uct design.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Customer feedback is proactively maintained and used to predict any emerging service issues and enhance future designs.
(Examples) • Spares levels are reduced in line with short predicable lead times for replacement spares.
Evidence
Opportunities
Section III: Enabling Infrastructure
III.A. Lean Organizational Enablers

III.B. Lean Process Enablers
Page 78 of 166 SECTION III - ENABLING INFRASTRUCTURE

Section I

Enabling
Infrastructure
Lean Organizational Enablers

Lean Process Enablers
Enabling Infrastructure supports the execution of enterprise leadership and be easily overlooked as a source of waste. However, waste that is inher-
life cycle processes. These enabling processes provide the means for man- ent in these processes can negatively impact the enterprise as a whole in
aging the resources to the organizations they serve as internal customers. a manner hidden from view. This section of the LESAT addresses the level
Since they enable rather than directly result in enterprise success, they can of lean implementation applicable to the Enabling Infrastructure.
Page 79 of 166 SECTION III - ENABLING INFRASTRUCTURE
Section III - Enabling Infrastructure
Definition: To achieve a successful lean transformation, the enterprise infrastructure must support the implementation of lean principles, practices and behavior.
III.A. Lean Organizational Enablers
The support units of an enterprise must themselves become lean in executing their assigned function, but they must also redefine what they do such
that they support lean implementation within the life cycle processes and the lean transformation/leadership processes.
• Do the finance and accounting measures support the implementation of lean?
• How well have the financial and accounting systems been integrated with non-financial measures of value creation?
• Can stakeholders retrieve financial information as required?
• Are human resource practices reviewed to assure that intellectual capital matches process needs?
• Are the information technology systems compatible with stakeholder communications and analysis needs?
• Do processes create the least amount of environmental hazards practical?
III.A.1. Financial System Level 1 Level 2 Level 3 Level 4 Level 5

Supports Lean Finance system provides Initial efforts are underway Finance system is over- Financial system scope is Financial systems provide
Transformation basic balance sheet and to adapt or modify systems hauled to provide data and expanded to integrate with seamless information
Lean requires appropriate cost accounting data; there to compensate for the financial information to sup- non-traditional measures of exchange across the
is little awareness and inadequacies of the formal port and enable a lean value creation (e.g., extended enterprise, with
financial data
exploration of broader financial system. transformation at any level. intellectual capital, emphasis on value creation
support roles for finance. balanced scorecard, etc.). for all stakeholders.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Financial measures that conflict with lean activity are no longer used to measure progress and performance.
(Examples) • The financial system handles a balanced set of financial and non-financial measures to assist decision-making.
• The financial system has been overhauled to ensure fast and efficient processing of information as required.
Evidence
Opportunities
Page 80 of 166 SECTION III. A. - LEAN ORGANIZATIONAL ENABLERS
III.A.2. Enterprise Level 1 Level 2 Level 3 Level 4 Level 5

Stakeholders Pull Lagging financial informa- Finance actively provides Users are able to directly Users are able to pull Users across the extended
Required Financial tion is reported through traditional financial access and use financial financial and other value enterprise generate and
Information regularly scheduled stan- information to assist users information to make trade- creation information to share timely financial and
dardized reports. Specific in planning and program- off decisions. support decision analysis performance data. Data
Data on demand
requests for measures ming activities. in the format desired. reflects extended enterprise
require extraordinary effort. results.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Financial and performance measurement data can be accessed as needed in user-defined format.
(Examples) • Financial information can be extrapolated to forecast outcomes.
• System provides up to date information on request and rationalizes information no longer used.
Evidence
Opportunities
III.A.3. Promulgate the Level 1 Level 2 Level 3 Level 4 Level 5

Learning The human resources A well-defined personnel Personnel development A learning climate is A learning climate is
Organization processes concentrate on development process, process is extended to all promoted within the promoted throughout the
recruiting, placement and aligned with organizational employees and incorporates enterprise through ready extended enterprise by
Learning Organizations
benefits. Personnel training needs, is applied for select- the anticipated future needs access to information and the sharing of capabilities,
create a flexible work-
is ad hoc and not aligned ed employees. of the lean enterprise. input to strategy/ policy knowledge, skills and best
force to organizational needs. Resources and facilities are making. Opportunities practice.
dedicated for learning. for extending learning
experiences are provided.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Intellectual capital is regarded as a corporate asset.
(Examples) • Employees have individual training plans, which are aligned to the current and projected skill base requirements.
• Employees actively capture and incorporate lessons learned into future training and practices.
Evidence
Opportunities
III.A.4. Enable the Lean Level 1 Level 2 Level 3 Level 4 Level 5

Enterprise with The information Elements of a common The information An information infrastruc- Information systems are fully
Information infrastructure consists mainly information infrastructure infrastructure has been ture is deployed that sup- interoperable and the
Systems and Tools of stand-alone systems. The have been determined, and formalized and is in use in ports seamless information pertinent information is
need for systems integration an implementation plan is selected locations. Legacy exchange across the easily accessible and usable
Facilitate the flow of
is recognized but no under development. systems are rationalized and enterprise. across the extended
information and knowl- improvement plan exists. Maintenance of legacy sys- aligned across the value enterprise.
edge tems consume most IT stream.
resources.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Compatible information systems and tools exist across the extended enterprise.
(Examples) • Information systems facilitate fast and effective transfer and retrieval of information required.
• Information systems and tools complement lean processes and practices and are easily adapted to accommodate change.
Evidence
Opportunities
III.A.5. Integration of Level 1 Level 2 Level 3 Level 4 Level 5

Environmental The enterprise complies with Consideration is given to A process is in place to to potential life cycle EHS EHS risk prevention and
Protection, Health all known legal and regula- means of mitigating proactively identify risks are implemented early mitigation is part of the
and Safety into the tory requirements and reacts conditions that cause Environmental protection, in product (service) design natural way business is
if issues are identified. environmental, health Health and Safety (EHS) and throughout the value conducted across the
Business
and safety issues. risks and manage them stream. extended enterprise, creat-
“Cleaner, healthier, safer” appropriately, with a prefer- ing a sustainable environ-
ence for source prevention. ment and creating a com-
Forward thinking solutions petitive advantage.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Health and safety issues are routinely addressed in employee driven improvement activities.
(Examples) • Processes and designs are proactively adapted to minimize environmental, health and safety issues at source.
• Designs meet current environmental regulations and are capable of easy adaptation to meet projected changes over the life cycle of the product.
Evidence
Opportunities
III.B. Lean Process Enablers
A number of enablers can facilitate lean implementation via consistent application throughout the enterprise.
• Have the full benefits from process standardization been realized across the enterprise?
• Has process standardization and reuse been imbedded in enterprise policies and procedures?
• Are common tools and systems used throughout the enterprise?
• Is process variation continually reviewed and reduced in all processes throughout the enterprise?
III.B.1. Process Level 1 Level 2 Level 3 Level 4 Level 5

Standardization Processes vary by program Key processes in the Selected processes are Process standardization and Extended enterprise
Strive for consistency or product line. organization have been standardized across the reuse is consistently interface processes have
and re-use identified that could benefit enterprise. employed across the been standardized.
from standardization, with enterprise.
initial efforts underway.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • The workforce plays a significant role in devising standard processes and practices, which are adhered to and periodically updated.
(Examples) • Process improvements are documented in a concise and easy to use standard format and transferred.
• Processes are standardized where applicable throughout the extended enterprise.
Evidence
Opportunities
Page 83 of 166 SECTION III.B. - LEAN PROCESS ENABLERS
III.B.2. Common Tools Level 1 Level 2 Level 3 Level 4 Level 5

and Systems Tools and systems vary by Have identified high lever- Plans are in place for achiev- Common tools and systems Compatibility of tools and
Assuring compatibility, program or work center. age opportunities for com- ing common tools and sys- have been implemented systems with those of
reducing costs mon tools and systems; ini- tems and have been imple- throughout the enterprise. enterprise partners in the
tial deployment in a few mented to varying degrees extended enterprise.
areas. across the enterprise.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Policies have been established and deployed that require the use of common tools and systems throughout the enterprise.
(Examples) • Common tools and systems provide easy access and reuse of knowledge across the product life cycle.
• Enterprise-wide use of common tools and systems provides enhanced compatibility between processes and aids employee transfer.
Evidence
Opportunities
III.B.3. Variation Reduction Level 1 Level 2 Level 3 Level 4 Level 5

Reduce uncertainty by There is limited use of There is evidence that A formal approach that Considerable benefits are Benefits of reduced variation
reducing variation variation reduction tools sources of variation are balances customer value realized from reduced are realized across the
and methods. There is being identified and ana- and variation reduction is variation in processes and extended enterprise.
some evidence of variation lyzed. Initial efforts are implemented in many parts practices across the
understanding in parts of underway to reduce vari- of the enterprise. enterprise.
the organization. ability.
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • Process ownership and visual displays of process variation enable quick and easy identification of adverse trends.
(Examples) • High levels of process stability are maintained by utilizing mistake proofing and root cause identification techniques to the fullest.
• Variation reductions achieved enable short predicable lead times for information and material flow.
Evidence
Opportunities
Page 85 of 166 SECTION III.B. - LEAN PROCESS ENABLERS
Appendix A – The “What and Why” of Lean
LEAN IS ABOUT BEHAVIOR can improve whatever “flows” and whatever is “pro-
First and foremost, it is important to understand that duced” in terms of cycle time, quality, and efficiency.
“Lean” is not merely a set of practices usually found
on the factory floor, but rather a fundamental change Unfortunately, too many people have been introduced
in how the people within an organization think and to a very narrow perspective of “Lean.” Often viewed
what they value, thus transforming how they behave. as a collection of practices with names such as
Positive results are achieved from the supporting prac- “Kaizen,” “poka-yoke,” and “kanban,” “Lean” has
tices that follow once a common set of beliefs and also been relegated to being appropriate mainly “on
principles are understood and adopted. the factory floor.” As a result, the true transformation-
al power of adopting “Lean” has often been lost, with
A “Lean” organization understands and believes in organizations desiring to improve realizing only a
the fundamental virtue of its basic Lean principles. fraction of its potential.
Within that Lean organization, everyone is focused on
identifying and eliminating sources of waste and inef- The true transformational power of Lean lies in its
ficiency. They look at the world through the eyes of inherent ability to unlock the potential of the entire
their customer and seek to fulfill customer expecta- organization: It can transform everyone and every-
tions. They value what the customer values. They thing that an Enterprise does. In fact, when totally
anticipate change and learn how to be responsive to adopted, Lean extends its transformational power
make change their ally. They understand the concept both upstream to the supplier base as well as down-
of flow, the power of sharing information, and the stream to customers!
criticality of relationships.
The following pages offer insights into the benefits and
Because Lean is about beliefs and behavior, it is appli- characteristics of Lean, designed to help you understand
cable beyond the factory floor to encompass the entire Lean more concretely. Above all, Lean is about how an
Enterprise. Its benefits pervade the organization. organization thinks and behaves. This belief is what
Employees who adopt a focus on eliminating waste, leads to applying the correct Lean practices and sus-
and who see the world through their customers’ eyes, taining the dynamic, continuous improvement process.
BENEFITS OF LEAN
What benefits can a company expect to realize as it transitions from a mass-production mentality to one based on
Lean principles and practices? Benefits accrue both in factory operations and in areas beyond the production floor.
Companies that have attempted to convert their factory operations to Lean, without simultaneously adopting Lean
principles and practices throughout the entire organization, have not realized Lean’s full potential. In fact, many such
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© Copyright Massachusetts Institute of Technology, 2001 87 of ?
companies have viewed their Lean transformation as a failure. Companies that have enjoyed the greatest success
in transitioning to Lean are those that take a holistic approach and view the transformation as a fundamental restruc-
turing of the Enterprise, including its organizational structure, business and information systems, workforce policies,
incentive systems, and relationships with customers and suppliers.
Benefits in Factory Operations

Factories that convert to Lean production typically achieve the following results.
There is a dramatic improvement in responsiveness to customers. Shipments are rarely late; the number of
defects reaching customers drops significantly, and overall customer satisfaction is much greater — thereby
increasing market share.
Most of the factory-floor chaos is eliminated. Rather than aisles clogged with batch production orders wait-
ing for processing at banks of identical machines grouped together, individual parts and assemblies move
smoothly within the Lean factory’s synchronized manufacturing cells, never stopping until processing and
inspection are completed. Production flow times are reduced by 80 percent to 90 percent. Workstations are
well organized and neat; no idle parts or carts clutter the workspace. No expeditors are needed to push
through late production orders by brute force. Storage racks for work-in-process are largely eliminated.
Material handling is simplified, often with manual methods replacing automation. Re-work stations are
gone. Scrap is significantly reduced, and the factory floor is much cleaner.
Labor productivity is double or triple that of the past.
Production control systems and their associated information systems are greatly simplified.
Shipments from certified suppliers arrive shortly before needed, are organized in the correct sequence, and
move directly to the point of use with no need for incoming inspection. Warehouse space for purchased
parts and materials is reduced by 80 percent to 90 percent in many cases.
Completed orders are shipped immediately to customers upon completion of the last stage in the internal
value chain, rather than accumulating in large warehouses. Orders are shipped to customers in small quan-
tities (often single units) rather than in large lots.
The total floor space needed in Lean factories is typically 55 percent to 65 percent of that needed in mass-
production factories for the same level of production.
Inventory levels at all stages (raw materials, in-process, and finished goods) are dramatically lower, often
by greater than 90 percent.
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Copyright Massachusetts Institute of Technology, 2001 © Copyright Massachusetts Institute of Technology, 2000 Page 88 of 166
Appendix A – The “What and Why” of Lean Continued
To support these claims, the book Lean Thinking (Womack and Jones 1996, p. 27) reports the following improve-
ments from converting to Lean:
INITIAL LEAN CONTINUOUS
CONVERSION IMPROVEMENT
LABOR PRODUCTIVITY Double Double again
PRODUCTION THROUGHPUT TIMES 90% reduction 50% reduction
INVENTORIES (THROUGHOUT) 90% reduction 50% reduction
ERRORS REACHING CUSTOMERS 50% reduction 50% reduction
SCRAP 50% reduction 50% reduction
TIME TO MARKET, NEW PRODUCT 50% reduction 50% reduction
Values in the “Initial Lean Conversion” column are the results that can be expected from the initial conversion effort.
Values in the “Continuous Improvement” column are the further improvements that can be expected from continu-
ous improvement efforts within two to three years. Improvements can be expected to continue indefinitely, but at a
declining rate. (These values represent rough averages in the companies studied by Womack and Jones; they have
not been validated and are obviously not precise.)
Benefits Beyond Production Operations
We would be missing a great opportunity were we to confine our application of Lean principles and practices to
the factory floor. Lean thinking can and should be applied to all functions in the enterprise. Consider, for example,
the Lean principle of “one piece flow.” Here is how this principle should be implemented across several enterprise
functions.
PRODUCTION Parts and assemblies never stop moving until order is shipped
PRODUCT DESIGN Design never stops moving forward until it is in production
BUSINESS PROCESSES Paperwork (or electronic equivalent) never stops moving until processing is
completed

Similarly, the same Lean principles associated with material flow and processing should be applied to information
flow and processing: minimize material/information flow times; minimize material/ information content; shorten
and straighten material/information flow to the maximum extent possible, and so on.
Using still another analogy from Lean production, the monolithic office should be converted to “cellular offices,” just
as the monolithic factory is modularized into smaller production cells. Office
equipment should be “right sized” (for example, huge, centrally located, monolithic printing machines should be
replaced with smaller document processors dispersed among the cellular offices.)
While there are no reported studies that quantify all the benefits of Lean beyond production, the following general
outcomes logically can be expected.
• The “voice of the customer” becomes the primary driving force in the enterprise. This has an impact on
product quality, organizational structure, production processes, policies, and overall behavior.
• New product development time is greatly reduced. Customers, suppliers, and enterprise specialists are
involved in product design from the outset.
• Relationships with suppliers have been revolutionized. Adversarial posturing has been replaced by win-
win cooperative practices. Target costing results in continuously lower prices for purchased items, with equi-
table sharing of savings.
• Responsiveness to changing market conditions is enhanced. Production rates can be adjusted much more
rapidly to meet fluctuating market demand. New products are introduced rapidly, with minimal disruption.
• The organizational structure shifts from a vertical to a horizontal focus, aligning value-adding activities
with the customer value stream. Decision-making is decentralized, contributing to enterprise responsiveness.
The organization is “flattened,” greatly reducing “overhead.”
• The workforce is empowered. Integrated product/process teams function as self-managed work units,
reducing the cost and clumsiness of supervision. The workforce is multi-skilled, contributing greatly to the
flexibility and responsiveness of the Enterprise. Employees perform inspection and maintenance, and also
determine work methods and workplace arrangement taking on tasks once the purview of highly paid spe-
cialists. These specialists are now freed to focus on the overall Enterprise.
• Improved operating margins and increased flexibility provide enhanced business opportunities in existing
or new markets.
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Specific Benefits in Aerospace

Between 1996 and 1999, LAI consortium members made several site visits to facilities of LAI sponsor-companies to
observe progress toward implementing Lean principles and practices. The site visit report’s “Executive Summary”
speaks to the potential benefits of Lean implementation in aerospace by posing two questions:
“What if an aerospace company and its key suppliers had mastered the application of Lean practices to the
point where they approached Toyota as a practitioner of the art?”
“What if all of the best results the team saw on various LAI site visits were achieved in every operation
throughout a single aerospace enterprise?”
According to those who participated in the site visits, Enterprises that met these two “criteria” would be able to
achieve tremendous improvements in product development and production:
Product Development Production

• Cycle time down 50% • Assembly touch hours down 49%
• Product development man-hours down 50% • Nonconformance costs down 70%
• Software development cost down 50% • Assembly support labor down 80%
• Prototypes made without tools • Inventory reduced by 90%
• No physical mockups • Assembly cycle time down 47%
• Engineering changes after release reduced by 50% • Engineering changes reduced by 60%
• ECP paperwork virtually eliminated • Fabrication costs reduced 50%
• CDRLs down 80% • Part lead-time down 69%
• DPMO down 90%
It is envisioned that an enterprise could develop a new aircraft in four to six years (versus today’s twelve- to fifteen-
year standard) at half the current development cost. It may also be able to deliver aircraft and missiles with a pro-
duction lead-time of less than one year and at half the current production costs. That Enterprise does not exist today,
but the achievement does not appear to be out of reach for an Enterprise with the right motivation. Every element
of this level of performance has been demonstrated at one or another of the LAI companies visited; what is needed
is the leadership to implement them all.

COSTS OF LEAN smaller machines to serve the same function will also
The remarkable improvements resulting from convert- require capital expenditures, as will “mistake-proof-
ing to the Lean paradigm cannot be achieved without ing” manufacturing equipment and processes.
a considerable investment. The primary investment Similarly, there may be some expenditures in infor-
required, however, is the time of the entire manage- mation technology to increase information flow across
ment team and workforce. the Enterprise (e.g., integrated CAD/CAM systems).
Experience has shown that Lean conversion does not Typically, the savings from reduced inventory levels
typically require extensive capital investments. Lean is alone are greater than all the costs of converting to
not necessarily high technology, but rather reduces Lean. Freed-up floor space becomes available for
the need for sophisticated, complex approaches to future expansion, or may be rented or sold. Shortened
production management and information systems. product development lead times also result in reduced
resource requirements.
Lean does require a considerable investment in edu-
cation and training. There may also be the costs of On balance, implementing Lean actually reduces cap-
acquiring new tooling to reduce set-up times. ital investment and other resources over the long run.
Replacing large “monument” machines with several
OVERARCHING STRATEGIC CONCEPTS OF LEAN

Six core strategic concepts of the Lean paradigm capture the principal nature of Lean.
• Customer Value and Value Stream
• Waste Minimization and Continuous Improvement
• Flow and Pull
• Near Perfect Product Quality
• Horizontal Organizational Focus
• Relationships Based on Mutual Trust and Commitment
These six concepts clearly distinguish Lean from mass production. The manner in which these concepts are
addressed in Lean organizations is fundamentally different from the approach in traditional organizations, as dis-
cussed in the following sub-sections.
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Customer Value and Value Stream rience, thereby delighting the customer with a com-
The starting point for Lean thinking is “value” as plete solution (Gunneson 1997).
defined by the end customer. Defining value requires
thinking from the customer’s perspective and working Once customer value is defined, the Enterprise must
inward to the company’s capabilities and core determine specifically how that value can be created
processes. and delivered in the most efficient and cost-effective
manner. A “value stream” is an end-to-end, linked set
Ultimately, value is defined in terms of specific prod- of actions, processes, and functions necessary to
ucts and services having specific capabilities/func- transform inputs (information, raw materials, labor,
tionalities, offered at specific prices to specific cus- energy, etc.) into a finished product delivered to the
tomers, to be delivered defect-free at specific times. customer. The value stream includes service after the
Value must be viewed in terms of the entire customer sale. Customers “pull” value from the value stream.
experience. The goal is to streamline the entire expe-
Waste Minimization and Continuous Improvement

Defining the value stream as indicated above provides a basis for performing an in-depth analysis of each indi-
vidual action in that value stream. Each action is classified into one of the following categories:
1. It is an action that unambiguously creates value.

2. It is an action that creates no value but is unavoidable given the current
capabilities within the company.
3. It is an action that creates no value and should be eliminated immediately.
Actions in categories (1) and (2) are analyzed further in an effort to improve the actions as much as possible and
eliminate unnecessary resource expenditures.
This process never ends. The organization implements a formal Continuous Improvement process that relentlessly
seeks to reduce waste of all kinds and continually improve the product and service delivered to the customer.
Consequently, Lean Enterprises realize ongoing reductions in response cycle times, production times, costs, required
production space, and errors. The workforce is heavily involved in the Continuous Improvement process and is the
primary source of ideas and initiatives that generate improvements. This applies to the entire organization, not just
production operations.

Flow and Pull ed. Consequently, much effort is expended in designing
Once wasteful actions along the value stream are elim- processes that turn out near-perfect (within tolerances)
inated to the maximum extent possible at a given time, parts every time. Also, there are no re-work stations to
the next Lean principle is put into practice: making the compensate for defective production. If a defective part
remaining value-creating steps “flow.” Here the pri- is produced, it must be detected immediately (not
mary challenge is to discard the “batch-and-queue” passed to the next workstation) and the situation result-
mentality prevalent in mass production and implement ing in the defect must be determined and corrected
small-lot production, with batch sizes of a single unit as before production is resumed. This same tight adher-
the ultimate goal. Flow is best achieved by discarding ence to very high quality standards carries through fab-
traditional functional organizational structures, to be rication, assembly, and final product completion.
replaced with integrated product/process teams
organized along the value stream (see the “Horizontal While these principles are expressed in terms of pro-
Organization” discussion below). It is important to duction systems, they should also be implemented and
note that the concept of “flow” and small batch size rigorously enforced in all areas of the Enterprise.
applies not only on the factory floor but also through- TQM programs have demonstrated the benefits of
out the organization (e.g., the flow associated with implementing high quality standards pervasively
administrative procedures). throughout the Enterprise.
“Customer pull” is an important conceptual break- Horizontal Organization Focus

through in the creation of the Lean paradigm. The traditional organizational structure (a “silo” with
Customers pulling value from the value stream (rather the various units representing the functions of a mass
than the Enterprise pushing products onto customers) production organization) is incompatible with the value
results in subsequent pulling actions that cascade up stream flow. Its design supports long production runs of
the value chain, stage by stage, through the Enterprise standardized parts in large batches but does not sup-
and all the way to the supply chain. port one-piece flow and just-in-time (pull) production.
Near-Perfect Product Quality Companies that have successfully transitioned to the

A Lean production system operates like a fine-tuned Lean paradigm have found that Integrated
watch, with each element highly dependent upon other Product/Process Design (IPPD) teams organized as
elements with which it interacts. Since there are no self-managed work teams to be an effective structure.
buffers, any part delivered from one work unit to anoth- In this structure, work teams focus horizontally on a
er must meet specifications. Defects cannot be tolerat- linked set of activities along the value stream, rather
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than reporting up a chain of command through many continuous improvement efforts. Provisions are made
layers. IPPD teams include members from engineering for mutual sharing of benefits that accrue from the
design, production operations, industrial engineering, implementation of Lean practices and continuous
quality assurance, purchasing (supply chain manage- improvement activities.
ment), human resources, suppliers, and most impor-
tant, the customer. In addition to using IPPD, many of Decision authority is decentralized. Decisions are
these same companies are structuring their organiza- made at the point of knowledge, application, and
tions around other core processes, shedding their tra- need. People are empowered to make appropriate
ditional organizational silos. decisions at the point of work.
Relationships Based on Mutual Trust and Increasingly, Lean Enterprises operate in a “virtual”
Commitment mode. Non-core functions are outsourced. Temporary
In the mass-production world, many relationships are strategic partnerships, formed (sometimes with direct
adversarial. For example, it is common to engage a competitors) to capitalize on a particular opportunity,
large number of suppliers who compete against each are disbanded when the opportunity is exhausted.
other for the firm’s business. Suppliers are rarely Enterprises operating in this manner must learn to
engaged in product development. Relationships tend share data, knowledge, and expertise considered
to be short-lived, one year at a time. The Enterprise highly proprietary in the mass-production mindset.
maintains a large staff of incoming inspectors to catch
defects. Similarly, relationships with the workforce are Two recent developments are having a dramatic
often adversarial, especially if it is unionized. impact on the manner in which companies may inter-
act with customers, suppliers, partners, and other
In Lean Enterprises, win-win arrangements are the potential stakeholders. Electronic commerce (e-com-
norm, as are long-term relationships with a few sup- merce) is changing the manner in which enterprises
pliers. Qualified suppliers are involved in product deal with suppliers. The cycle time for ordering, ship-
development. Target costing is used to achieve contin- ping, receiving, and paying for supplies has been
ual reductions in costs, with the savings shared. The reduced from weeks to days (or, in some cases, even
supplier ensures the quality of the supplies delivered; to hours). Equally dramatic change is unfolding in
no incoming inspection is necessary. business-to-business (B2B) interactions, both in terms
of their nature and speed. Strategic partnerships can
It is desirable in most cases to establish labor-man- be formed very rapidly in response to business oppor-
agement partnerships that stress win-win arrange- tunities that may be available only briefly. To play in
ments. The workforce is multi-skilled and supports

this fast-paced game, enterprises must become much more “forward-focused,” ever ready to move swiftly and deftly
into the fray.
It is interesting to note that Enterprises that have transitioned to the Lean paradigm are much better prepared to cap-
italize on the new capabilities offered by the Internet than are companies that continue to operate with a mass-pro-
duction mentality. The horizontal organizational orientation facilitates the agility and responsiveness required for
the new mode of enterprise functioning.
In short, the “brave new world” is upon us. New approaches, new assumptions, new structures, and new mental
models are required to guide us through the largely uncharted waters of the future. There is no alternative. The
mass production mental model is passé.
CHARACTERISTICS OF A LEAN ENTERPRISE
The general nature of a “Lean Enterprise” is still being formulated as we enter the 21st century. Indeed, there is much
confusion and inconsistency in terminology used to characterize the concepts of “lean”, “agile”, and so on. Some
argue (Gunneson 1997) that “agile” is the ultimate end state, with “lean” an intermediate state between “mass” and
“agile.” We do not subscribe to this view. The view of “Lean” in this Guide encompasses the characteristics that
some authors assign to “agile,” and includes additional elements. The principal difference is that some authors view
“Lean” as applicable only at the production level. Our view, however, is that “Lean” is applicable throughout the
Enterprise. We have attempted to be as precise as possible with our terminology to avoid adding to the existing
confusion.
Webster’s Dictionary offers several definitions of “enterprise.” The most pertinent for our purposes is
as follows: Enterprise – a unit of economic organization or activity, especially a business organization.
Similarly, Webster’s offers this definition of “lean”: Lean – thin, spare; containing little or no fat; .
. . suggests a sinewy frame without any superfluous flesh.
Combining elements of these definitions provides this useful definition of “Lean Enterprise”: Lean
Enterprise – a business organization that delivers value to its stakeholders, with little or no superflu-
ous consumption of resources (materials, human, capital, time, physical plant, equipment, informa-
tion, energy).
Page 96© of ?
Lean companies are more alert, agile, and responsive than their heftier cohorts. In a dynamic, global, and com-
petitive business environment, companies must not only achieve a high state of agility and responsiveness, but must
continuously and relentlessly search for ways to reduce consumption of all required resources while delivering
superb value to their customers and other stakeholders.
We will explore the characteristics of a “Lean Enterprise”

across these dimensions:
• Strategy
• Customer Focus
• Organizational Structure
• Incentives and Performance Scorecards
• Lean Management
• Workforce Issues
• Enterprise Business Systems
• Organizational Learning

Strategy
Factors associated with Lean principles and practices are incorporated explicitly into the Enterprises’ strate-
gic planning process: customer response cycles; customer satisfaction; rationalized supply chain; flexibility
and adaptability; service after the sale; strategic use of information/communication technologies.
The business need for Lean has been clearly determined, articulated, and conveyed throughout the organi-
zation.
Strategic business goals, along with Lean enterprise metrics, are conveyed to all levels of the organization.
Flexible strategies and relationships exist with suppliers and even with direct competitors, allowing rapid for-
mation and disbanding of partnerships as opportunities arise.
Competitive benchmarking is performed regularly relative to delivery of customer value.
Customer Focus
Everyone in the Enterprise is focused continuously on the goal of delivering best life cycle value to the cus-
tomer.
The primary driving force is the “voice of the customer,” with tangible evidence of this found in every cor-
ner of the Enterprise.
Each individual understands his or her personal impact on customer value, and how he or she adds values
to the Enterprise.
The company has an ongoing customer research program that gathers information on what constitutes “suc-
cess” for the end customer and how well the organization is performing relative to customer expectations
and competitor performance.
Customer value streams are mapped and optimized to ensure that all resource deployment decisions are
directed to the primary goal of delivering superb customer value.
Integrated Product and Process Development (IPPD) teams include customers, suppliers, marketing, pur-
chasing, human resources, business systems, and manufacturing. These teams are organized horizontally
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along the customer value stream, thereby ensuring concurrency and collaborative input to product and
process design decisions. The IPPD teams may be geographically distributed, functioning as “virtual” teams.
Organizational Structure
Ideally, the Lean Enterprise has evolved into an agile, rapidly reconfigurable, customer-focused, supplier-
integrated, “virtual” organization.
The horizontal axis dominates the organizational structure, with IPPD teams aligned along the customer
value stream; there is a minimum number of management levels; and decision authority is at the point of
action. Large, bloated, “indirect” staff functions are mostly gone, and any remaining staff is redeployed to
value-adding activities in the horizontally oriented structure.
A majority of the resources previously concentrated in the functional “silos” of the vertical organization are
now redeployed and integrated into the IPPD teams and other core processes. A relatively small contingent
of managers in each functional (core process) area may remain centrally located at the Enterprise level to
enforce necessary standards across multiple product families and to facilitate professional development and
career-path planning for the various specialty employees now dispersed among the process teams.
Team-based management is implemented in all areas of the Enterprise, following a comprehensive educa-
tion and training program. The workforce consists of multi-skilled workers, organized in properly sized work
cells to optimize one-piece flow and accommodate fluctuations in market demand. This concept applies to
support functions as well as to production.
All work activities, both direct and indirect, are organized to support the optimization of multiple customer
value streams.
Customers and suppliers are involved in all phases of the product life cycle, from concept development
through product delivery and support.
Cross-functional interdisciplinary teams support and continuously improve all core processes in the
Enterprise.

Incentives and Performance Visibility
Value-added metrics are determined and deployed, since all performance is evaluated against customer
value and world-class performance. Any activity that does not measure up is improved or outsourced.
Metrics that portray process performance relative to the value stream are communicated to appropriate lev-
els and made visible. Visible scorecards are posted in all areas so that employees can see immediately the
impact of their performance on the Lean metrics, and how their own rewards are a function of their per-
formance against those metrics.
An integrated set of metrics are designed and deployed to reflect performance outcomes central to the pri-
mary goals of the Lean Enterprise: (1) delivering superb value to the customer and other stakeholders; (2)
maintaining the capability to respond rapidly to changes in the global business environment; (3) continu-
ously eliminating non-value-adding activities; (4) continuously upgrading workforce skills and knowledge in
preparation for future challenges and opportunities. These metrics should distinguish between output
(enabling), such as hours of training, and outcome (results), such as ROI, market share, and so on.
Incentives are designed to reward both individual and team performance that contributes to the achieve-
ment of the primary goals of the Lean Enterprise, as stated above. An equitable arrangement is in place for
the mutual sharing among all stakeholders of benefits gleaned from overall Enterprise performance and
from continuous improvement activities.
Employee compensation accounts for the degree to which multi-functional skills and knowledge have been
acquired and demonstrated.
Both individual and team performance appraisals are based upon contributions to the achievement of
strategic business goals and operating results.
Lean Management
The Enterprise Leader and Senior Managers have a deep knowledge and understanding of Lean principles,
practices, and behaviors, not only as applied in production operations, but throughout the entire Enterprise.
The leadership is visibly involved in promoting Lean initiatives and in evaluating the results of these initia-
tives. The leadership ensures the provision of required resources.
The Enterprise Leader involves the Stakeholder Leaders in the formulation, implementation, and review of
Lean initiatives. Special attention is paid to the relationship between management and the workforce.
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© Copyright © Copyright Massachusetts Institute of Technology, 2000 Page 100 of 166
Enterprise Leaders optimize the value across all Enterprise stakeholders: customers, employees, suppliers,
stockholders, and the community.
A shared vision of the Lean enterprise is created and communicated to the entire organization.
The Lean transformation involves leaders at all levels, who nurture the change process and remove barriers
to implementation.
Relationships based on mutual trust and commitment are developed with customers, suppliers, and the workforce.
Management spends most of its time developing employees to the point that they can organize and man-
age their own work and improve the capability of the organization to respond to the market faster than
before, with solutions of higher market value.
Employees are empowered after appropriate training to make their own work decisions. Employees are
given general directions, resources, and guidance, and then expected to run their processes and strive for
continuous improvement through the implementation of creative solutions.
Lean principles, practices, and behavior are “business as usual” (“This is the way we do business; this is the
way we operate.”) within the Enterprise.
Workforce Issues
The workforce is multi-skilled. Ideally, every employee is capable of performing every task within his or her
work unit. This is necessary to ensure that the throughput rates of work units may be adjusted dynamically
in response to changes in market demand.
There is a heavy emphasis on continuous education, training, and skill building.
Risk taking, leadership, and innovation are encouraged and rewarded at all levels.
Employees are involved actively in planning and goal setting for their own work units. They perform their
own inspection, maintenance, and workplace design, tasks once handled by professional/technical staff.
Employees are considered critical to problem-solving, cycle-time reduction, and continuous improvement.

© Copyright Massachusetts Institute of Technology, 2001101 of ?
Enterprise Business Processes and Systems
“Flow” is optimized across the processes. All non-value-added activities and resources are eliminated.
Processes, because they are flexible and dynamic, can be adapted to changing markets, customer expec-
tations, and competitive pressures.
Process teams continuously redesign and streamline all business processes to reduce cycle times, while
improving quality and customer service.
Processes are networked and interlinked to facilitate concurrency, speed, and handoffs, and to minimize
inter-process gaps and disconnects.
Process designers are capable of continuously renewing processes to accommodate rapidly shifting strate-
gies and capitalize on unanticipated opportunities.
Databases are integrated, interactive, and seamless, providing consistent information to all elements of the
extended enterprise.
Employees share information that is available at the precise time and place that decisions need to be made.
Information flows seamlessly across all processes of the extended Enterprise.
Information is shared without regard for geographic distance or corporate boundaries.
Information is created and maintained in a “Lean” fashion: entered once into common databases in an open
architecture.
Organizational Learning
“Organizational learning” is fostered to enhance the creation, capture and rapid diffusion of knowledge.
The enterprise captures lessons learned and incorporates the derived general principles in its decision rules,
design guides, and other appropriate elements.

Knowledge is retained in electronic knowledge bases managed by a Chief Knowledge Officer (CKO), as
well as in documented processes, training materials, individual employees, and teams.
The Enterprise knowledge bases provide input to a family of reusable simulation models that can be
retrieved and executed in various configurations. These models are the basis for optimizing the many
processes across the Enterprise and for assessing the likely outcomes of a wide variety of “what-if” ques-
tions asked by executives during the strategic planning process and by managers during normal business
operations.

Reference Material
There is a substantial body of material available that explores various elements of the subject of Lean. In the follow-
ing two sections, we have identified materials that we believe would be most useful to Enterprise Leaders serious about
lean transformation. In the first section, we have listed a set of available materials that we consider as essential for
anyone wishing to acquire a substantive understanding of the subject of Lean. In the second section, we recommend
additional materials that provide greater depth of understanding especially regarding specific facets of lean.
ESSENTIAL READING
Kochan, T., R. Lansbury, and J. MacDuffie, After Lean Production (Ithaca: ILR Press, 1997)
Kotter, J., Leading Change (Boston: Harvard Business School Press, 1996)
Liker, J., (editor), Becoming Lean (Portland: Productivity Press, 1998)
Nunez, J. and S. Babson (editors), Confronting Change: Auto labor and lean production in North America (Puebla,
Mexico: Benemerita Universidad Autonoma de Puebla, 1998)
Ohno, T., Toyota Production System: Beyond Large-Scale Production (Portland: Productivity Press, 1988)
Pine, B., Mass Customization (Boston: Harvard Business School Press, 1993)
Shingo, S., A Study of the Toyota Production System (Portland: Productivity Press, 1989)
Womack, J., Daniel Jones and Roos, D., The Machine that Changed the World (New York: Rawson Associates,
1990)
Womack, J. and Daniel Jones, Lean Thinking (New York: Simon & Schuster, 1996)
RECOMMENDED READING
Berggren, C., Alternatives to Lean Production (Ithaca: ILR Press, 1992)
Cooper, R., When Lean Enterprises Collide (Boston: Harvard Business School Press, 1995)
Cutcher-Gershenfeld, J. et al., Knowledge-Driven Work (New York: Oxford University Press, 1998)
Dimancescu, D., Peter Hines, and Nick Rich, The Lean Enterprise (New York: American Management Association,
1997)
Green, Wm. and E. Yanarella (editors), North American Auto Unions in Crisis: Lean Production as Contested Terrain
(Albany: State University of New York Press, 1996)
Greif, M., The Visual Factory (Cambridge: Productivity Press, Inc., 1991)
Gunneson, A., Transitioning to Agility (Reading, MA: Addison-Wesley Publishing Company 1997)
Hounshell, D., From the American System to Mass Production, 1800 – 1932 (Baltimore: The Johns Hopkins
University Press, 1984)
Kaplan, R., and David Norton, The Balanced Scorecard (Boston: Harvard Business School Press, 1996)
Monden, Y., Toyota Production System, 3rd ed. (Norcross, GA: Engineering and Management Press, 1998)
Ostroff, F., The Horizontal Organization (New York: Oxford University Press, 1999)
Papows, J., enterprise.com (Reading, MA: Perseus Books, 1998)
Porter, M., Competitive Advantage (New York: The Free Press, 1985)
Senge, P., The Fifth Discipline (New York: Doubleday, 1990)

Appendix B – LESAT Glossary
Activity - A unit of work that has a beginning and solution, assumptions and constraints, alternative
an end, occurs over a period of time, and consumes solutions, life-cycle investment costs, quantified bene-
input(s) and produces output(s). (Ref. 2) fits, an analysis of costs versus benefits, and an analy-
sis of risks involved. Within Department of Defense
Backflow - A condition in which a part/product
(DoD), a business case for a business process
being processed is returned to a previous stage due to
improvement project is called a Functional Economic
a defective condition, a missing operation, or other
Analysis (FEA). (Ref. 2)
anomalous situation.
Cellular layouts – The layout of machines of dif-
Balanced Scorecard - An analysis technique and
ferent types performing different operations in a tight
management instrument that translates an enterprise’s
sequence, typically in a U-shape, to permit single-
mission and strategy into a comprehensive set of per-
piece flow and flexible deployment of human effort by
formance measures to provide a framework for strate-
means of multi-machine working. (Ref. 1)
gic action. The scorecard may gauge organizational
performance across several perspectives such as: Consensus - A state where group members support
financial, customers, internal business processes, and an action or decision, even if some do not fully agree
learning and growth. (Ref. 2) with it. A consensus decision is made after aspects of
an issue, both positive and negative, have been
Baseline - A standard for comparison used as a ref-
reviewed or discussed to the extent that everyone
erence for measuring progress. Often used as repre-
openly understands, supports, and participates in the
sentation of the current state to be used to assess per-
decision. (Ref. 2)
formance against benchmarks and/or to assess future
states. (Ref. 2) Core Competency - The particular capabilities
(knowledge, demonstrated proficiency and experi-
Batch-and-queue - The mass-production practice of
ence) of an enterprise that satisfy existing strategy and
making large lots of a part and sending the batch to
serves as the basis for growth or diversification into
wait in the queue before the next operation in the pro-
new lines of business. (Ref. 2)
duction process. Contrast with single-piece flow. (Ref. 1)
Cross Functional Management – A process
Best Practice – A method of accomplishing a busi-
designed to encourage and support interdepartmental
ness function or process that is considered superior to
communication and cooperation throughout an enter-
other known methods. (Ref. 2)
prise, as opposed to command and control through
Business Case - Justification for an improvement.
narrow departments or divisions. The purpose is to
Serves as a decision package for enterprise execu-
achieve enterprise targets such as quality, cost, and
tives. Typically includes such information as an analy-
delivery of products and services by optimizing the
sis of current problems or future needs, a proposed
sharing of work. (Ref. 6)
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Culture - Shared characteristics such as values, Extended Enterprise – All businesses along the
behaviors, and beliefs that distinguish the members of value stream that contributes to providing value to a
one group from those of another. Organizational cul- customer. (Adapted from Ref. 1.)
ture includes the common set of beliefs, sentiments,
Flow – The progressive achievement of tasks along a
priorities, attitudes, perceptions, operating principles,
value stream so that a product proceeds from design
and accepted norms shared by individuals within an
to launch, order to delivery, and raw materials into
organization. Cultural change is a major shift in
the hands of the customer with no stoppages, scrap,
these organizational characteristics. (Ref. 2)
or backflows. (Ref. 1)
Customer - A stakeholder who is a recipient of a
Continuous Flow Production – Items are pro-
product or service produced by an enterprise.
duced and moved from one processing step to the next
Customers may be internal or external to the organi-
one unit-at-a-time. Each process makes only the one
zation. External customers, those in the marketplace,
piece that the next process needs, and the transfer batch
are the reason an enterprise exists. Internal customers
size is one. Also called “single-piece flow” or “one-piece
are the reason a functional area or department exists
flow.” Contrast with batch-and-queue. (Ref. 4)
– an interdependent department, or a downstream
Gap Analysis - The difference between a current
user in the value chain. When services rather than
state or position and a desired state or position. (Ref. 2)
products are provided, customers are often called
clients. (Ref. 2) Innovation – The practical transition of ideas into
new products, services, processes, systems and social
Cycle Time - The time required to complete one cycle
interactions. (Ref. 5)
of an operation. If cycle time for every operation in a
complete process can be reduced to equal takt time, Just-in-Time – Producing or conveying only the
products can be made in single-piece flow. (Ref. 1) items that are needed by the next process when they
are needed and in the quantity needed. (Ref. 4)
Employees – All of the individuals employed by the
organization including full time, part time, temporary Lead-time – The total time a customer must wait to
and contract employees. (Ref. 5) receive a product after placing an order. When a pro-
duction system is running at or below capacity, lead-
Enterprise - Any corporate or business-unit organi-
time and throughput time are the same. When
zation with a distinct mission, market segment, suite of
demand exceeds the capacity of a system, there is
products or services, customer base, profit/loss
additional waiting time before the start of production,
responsibility, and set of competitors. The purpose for
lead-time exceeds throughput time. (Ref. 1)
the organization’s existence is to perform its mission
and achieve associated goals. (Ref. 2)
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Appendix B – LESAT Glossary Continued
Non-value Added - Any product, process, or Push System - A planning system that schedules
service that does not add value to the ultimate cus- upstream operations according to theoretical down-
tomer. (It is important to note that non-value added is stream needs based on a plan, which may not be cur-
not the same as “not necessary”, since some activities rent – as opposed to a pull system. (Ref. 3)
are required by law or are necessary for process con-
Single-Piece Flow – A situation in which units pro-
trol, such as inspection. These may not add value but
ceed, one at a time, through operations in design,
are used to assess processes for control and improve-
order-taking, production and assembly, without inter-
ment.) (Ref. 3)
ruptions, backflows, or scrap. (Ref. 1)
Partnerships – A working relationship between
Stakeholders – All those who have an interest in an
two or more parties. Partners can include suppliers,
organization, its activities and its achievements. These
distributors, joint ventures, and alliances. (Ref. 5)
may include customers, partners, employees, share-
Performance Measure - A dimension of an activ- holders, owners, government, and regulators. (Ref. 5)
ity or process – quality, cost, cycle time, or other char-
Strategic Plan - A comprehensive statement of an
acteristic – that can be used to judge the effectiveness
organization’s overall mission, objectives, and strate-
or efficiency of the process against a target or standard
gy. A detailed roadmap of the direction the organi-
value. (Ref. 2)
zation intends to follow in conducting its activities.
Process – A sequence of activities that adds value by Provides direction, concentration of effort, consistency
producing required outputs from a variety of inputs. of purpose, and flexibility as a business moves to
(Ref. 5) maintain and improve its competitive position. (Ref. 2)
Productivity - An overall measure of the ability to Strategic Planning - The top-level management
produce a good or service. It is the actual output of decision process that focuses on the overarching,
production compared to the actual input of resources. long-range direction of the enterprise and establishes
Productivity is a relative measure across time or the means by which that direction is reached. Includes
against common entities. In economics, the ratio of defining top-level and subordinate missions, goals,
output in terms of dollars of sales to an input such as and supporting objectives, i.e., how the enterprise
direct labor in terms of total wages. (Ref. 3) sees its purpose and where it wants to go. Provides
the “big picture” along with a description of how
Pull System - A planning system based on commu-
goals and objectives are to be achieved and the indi-
nication of actual real-time needs from downstream
cators that will be used to measure performance and
operations - ultimately final assembly or the equiva-
outcomes. (Ref. 2)
lent - as opposed to a push system. (Ref. 3)
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Takt Time - The available production time divided material and information flows from beginning to end
by the rate of customer demand. For example, if cus- utilizing a visual representation of every process. This
tomers demand 240 widgets per day and the factory facilitates understanding of current state and the
operates 480 minutes per day, takt time is two min- development of the proposed future state. The differ-
utes; if customer wants two new products designed ence between the two states becomes the basis for the
per month, takt time is two weeks. Takt time sets the Lean Transformation plan.
pace of production to match the rate of customer
Virtual Organization - An assemblage of core com-
demand and becomes the heartbeat of any lean sys-
petencies from (perhaps) previously unassociated partic-
tem. (Ref. 1)
ipants; on a temporary basis for a defined purpose and
Value – A product or service’s capability provided to for an indefinite period of time; has profit/loss or other
a customer at the right time, at an appropriate price, accomplishment responsibility; upon completion of the
as defined in each case by the customer. (Ref. 4) original purpose, the organization is dissolved.
Value-added Activity - Value-added is the differ- Vision - A guiding theme that articulates the nature of
ence between dollar sales and the cost of raw materi- the business and the enterprise’s intent for its future. A
als and purchased parts. Value-added activity is an description of what senior management wants to
activity or step in a process that adds value to an out- achieve. Usually refers to the medium to long term and is
put product or service. Such an activity merits the cost often expressed in terms of a series of objectives. (Ref. 2)
of the resources it consumes in production. These are
Waste - Any product, process, or service, which
the activities that customers would view as important
does not add value to the ultimate customer. Waste in
and necessary. A value-added activity contributes
business processes/production can be broken down
directly to the performance of a mission, and could not
into seven types; Waiting, Unnecessary Motion,
be eliminated without impairing the mission. (Ref. 2)
Processing, Inventory, Moving Items, Making Too
Value Added Time – Time for those work elements Much, Fixing Defects. (Ref. 3)
that transform product into value the customer is will-
Ref. 1 Lean Thinking, James P. Womack and Daniel T.
ing to pay for. (Ref. 4) Jones, Simon & Schuster, 1996
Ref. 2 Techniques for Enterprise Management, Software
Value Stream - The specific activities required to Productivity Consortium, SPC-98016-MC, Feb.
1999
design, order, and provide a specific product, from Ref. 3 Internal Glossary of Rockwell Collins Corp., Lean
Electronics Division
concept to launch, order to delivery, and raw materi-
Ref. 4 Training to See, Mike Rother and John Shook, The
als into the hands of the customer. (Ref. 1) Lean Enterprise Institute, Feb. 2000
Value Stream Mapping/Analysis - Involves Ref. 5 The EFQM Excellence Model Glossary of Terms
Ref. 6 The Lean Enterprise, Dan Dimancescu, Peter Hines
defining a product families’ / business processes’ and Nick Rich, American Management Association,
1997
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Appendix C – TTL Tutorial
Overview of Transition-to-Lean Roadmap: Enterprise Level
We have developed a conceptual framework — the internal and external relations with all key stakehold-
“Transition-to-Lean Roadmap” — to assist firms in ers, and structural issues that must be addressed dur-
their efforts to transform into Lean enterprises. The ing a significant change initiative.
framework portrays the overall “flow” of action steps
Eight pairs of sheets comprise the Transition-to-Lean
necessary to initiate, sustain, and continuously refine
Roadmap, providing an introductory, high-level
an Enterprise transformation based upon Lean princi-
overview of the complete framework. These are a
ples and practices. This particular Transition-to-Lean
“snapshot” of the overall transition process. The accom-
Roadmap was developed from an Enterprise perspec-
panying text provides further detail and elaboration.
tive, with particular attention paid to strategic issues,
Figure 1 is a schematic representation of the Transition-to-Lean Roadmap. The following

principles and concepts were important in the team’s creation of this Roadmap:
• The Enterprise Leader must lead the transition.

• Since Lean principles and practices are fundamentally different from those of mass production, Senior
Leaders must open their minds to new concepts that may seem counter-intuitive and even contradictory to
common sense.
• Until Senior Leadership understands, embraces, and commits to a full conversion to Lean, any initiative
will have little chance of succeeding.
Figure 1 depicts three basic cycles of activity: the Entry/Reentry Cycle (Adopt Fundamental Change); the Long Term
Cycle (Create the Environment); and the Short Term Cycle (Detailed Implementation).
The Entry/Reentry Cycle links to the Enterprise Strategic Planning activity, and specifies the actions associated with
the strategic decision to adopt the Lean paradigm. It is energized when a significant commitment is undertaken to
adopt Lean in the Enterprise or when the Enterprise’s basic strategic approach is reshaped in part by the changes
enabled by a Lean transformation.
The Long Term Cycle includes those actions that set the stage for the Enterprise transformation and that prepare the
organization for launching into detailed planning and implementation. Once the activities in this cycle are imple-
mented, the Enterprise remains in this cycle for some time. This cycle is re-entered periodically as significant changes
occur in the external environment.
The Short Term Cycle includes those actions that actually achieve the transformation. This cycle has a fast clock
speed, with ongoing action-monitoring-corrective action phases.
The following sections examine in detail each segment of the Roadmap.
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The Enterprise Level Transition-to-Lean Roadmap provides a general frame- organization is then prepared for launching into detailed planning and
work for assisting companies in their transition to Lean. It portrays an overall implementation.
“flow” of action steps that can initiate, sustain, and continuously refine the
transformation of an Enterprise based upon Lean principles and practices. The third cycle is the Short Term Cycle, in which detailed implementation is
planned, executed, and monitored. This cycle has a fast clock speed, with
The Roadmap comprises three “cycles.” First is the Entry/Reentry Cycle, which ongoing action-monitoring-corrective action phases. The Long Term Cycle is
specifies the actions associated with the decision to adopt the Lean paradigm. re-entered periodically to capitalize on lessons learned during implementa-
This cycle is closely linked to the Enterprise Strategic Planning cycle. tion and to accommodate changes occurring in the dynamic external envi-
ronment.
The second cycle is called the Long Term Cycle, in which the environment and
conditions necessary for a successful Lean transformation are created. The

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Transition-to-Lean Roadmap: Enterprise Level
ADOPT LEAN PARADIGM

Implementing the Lean paradigm requires revisiting every assumption, practice, and process associated with cus-
tomer interactions, product design, production, quality assurance, human resources, work supervision, organiza-
tional structure, business systems, and supplier relations. We must learn to do business, behave, and see value in
fundamentally different ways.
FOCUS ON THE VALUE STREAM

A primary concept of Lean thinking is that all actions and resources of a firm should be focused on creating value.
Any action or resource expenditure that does not contribute directly to the goal of creating value is waste and should
be eliminated to the greatest extent possible. Value stream definitions and analysis will identify the highest leverage
areas that should be pursued in the Lean transformation.
DEVELOP LEAN STRUCTURE AND BEHAVIOR

Both the structure and behavior of Lean organizations are significantly different from those of mass-production
organizations. This segment of the Roadmap deals with creating the mental model and conditions necessary for the
implementation of Lean principles and practices. Incentives, structures, systems, and policies of the Enterprise must
be aligned with the desired behavior.
CREATE & REFINE TRANSFORMATION PLAN

Moving to the Short Term Cycle, we now must identify and prioritize those Lean initiatives that collectively constitute
the Enterprise Level Plan for achieving the desired transformation. Resources must be committed to the plan. An
extensive program of education and training will be required.
IMPLEMENT LEAN INITIATIVES

It is here that the changes in practices and procedures are actually implemented. As a flow-down from the Enterprise
Level Plan, we now define the specific actions, programs, and projects that will be executed within each organiza-
tional area and determine how they will be integrated at the system level. These detailed action plans are execut-
ed, monitored, and modified as required.
FOCUS ON CONTINUOUS IMPROVEMENT

As progress is made on the detailed action plans, the results of the changes are measured and assessed. Corrective
actions are part of the continuous improvement process. Opportunities for further improvements are identified.
Detailed corrective actions become input for the “Create & Refine Transformation Plan” segment, to be incorporat-
ed into the next iteration of the Enterprise Level Plan. Corrective action indicators of more fundamental change drive
the need to revisit the Long Term Cycle for further modifications to the structure and behavior of the enterprise.
Adopt Lean Paradigm
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The Lean paradigm consists of many concepts, principles, and practices that Lean requires a deep understanding of the fundamental aspects of an
are counter-intuitive and diametrically opposed to those of mass production. Enterprise and its interactions with the rest of the world. This segment of the
Most of today’s business leaders climbed the ladder of success while follow- Roadmap provides a framework for acquiring an in-depth understanding of
ing the same mass-production practices they are now being asked to aban- Lean and for obtaining full commitment from Senior Managers to launch a
don. Lean transformation, or to elevate local Lean initiatives to the Enterprise level.
A large number of “movements” and initiatives have been pushed on man- Adopting the Lean paradigm is an issue of passion as well as logic. One must
agers over the past several years, including re-engineering, TQM, and oth- have an absolute and abiding belief that the implementation of Lean princi-
ers. While it is tempting to believe that the sum of all these initiatives add up ples and practices is of essential importance to the Enterprise. Lean is not just
to Lean, that is not the case. In fact, some of these initiatives may require the way things are done, but is the way the Enterprise thinks, what it believes,
modification to be compatible with Lean principles. how it behaves, and what it values.

Major Tasks within “Adopt Lean Paradigm”
Build Vision
Create a new mental model of how the enterprise would function if it acts and behaves according to Lean
principles and practices.
Extend the vision of Lean to all aspects of the Enterprise.
Make the Lean vision an integral part of the company’s strategic business plan.
Convey Urgency
Identify the strategic imperative, the forcing function for transitioning to Lean.
Understand the long-term competitive threats.
Establish that Lean is the most promising alternative for addressing the strategic imperative.
Foster Lean Learning

Have all senior managers acquire an in-depth understanding of the Lean paradigm and make site visits to
successful Lean companies.
Understand the full implications of transitioning to Lean.
Learn that lean is about “behavior”, not just practices and activities.
Make the Commitment

Enterprise Leader must make the final decision to transition the company to Lean.
Make the commitment irrevocable.
Commit the significant resources required (primarily time, energy, and personal capital).
Obtain Senior Management Buy-in

Full buy-in is required from all senior managers.
In-depth education and training is required.
Managers who are unwilling or unable to change must be replaced.
Focus on the Value Stream
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© Copyright Massachusetts Institute of
A primary concept of Lean thinking is that all actions and resources of a created and communicated across the Enterprise and to important exter-
firm should be focused on creating value for its customers. Any action or nal constituents.
resource expenditure that cannot be associated with this goal is regarded
as waste and should be eliminated. Enterprise goals and metrics should also be expressed in terms of value-
added, thereby better defining for the Enterprise how to capture the cus-
It is helpful to visualize customers “pulling” value from the company, result- tomer’s perception of value.
ing in cascaded pulling actions back upstream across all Enterprise func-
tions: product design, marketing, business systems, accounting, informa- Lean transformation initiatives will have a significant impact on all stake-
tion/communications systems, human resource management, and so on. holders. At a minimum, consideration must be made for: customers,
The pulling action naturally extends beyond the Enterprise to suppliers and employees, union (if any), corporate entity, management and supervision
other external agencies. at all levels, suppliers, partners, stockholders, community, and regulators.
It is important to optimize across the value streams of all those stakehold-
The vision of the company operating and behaving in this manner must be ers by taking a global systems view.

Major Tasks within “Focus on the Value Stream”
Map Value Stream

Elicit definition of value from the end customer.
Move from customer inward to Enterprise core processes; continue externally to suppliers.
Realize that the end-to-end chain of actions, resources, and decisions required to deliver defined value is
the customer’s value stream.
Optimize the value stream by eliminating non-value-adding actions (waste); continuous improvement
efforts never end.
Realize that the Enterprise must optimize across multiple stakeholder value streams (customer, employees,
shareholders, and suppliers).
Internalize the Vision

Create a characterization of how customers pull value from the value stream; communicate this vision
across the Enterprise.
Organize the internal value stream such that downstream units “pull” value from preceding upstream
units; cascade the process backwards, extending to the supply chain.
Focus upon continuous improvement process to achieve ongoing waste elimination.
Create the “future” value stream.
Set Goals and Metrics

Derive goals & metrics directly from identified strategic needs.
Determine baseline measures of how the Enterprise brings value to the customer.
From the Lean vision, specify target measures of anticipated gains based upon adoption of Lean principles
and practices.
Tie goals and metrics to improvements in value-adding activities and elimination of waste; these are the key
Enterprise-level measures of progress in transitioning to Lean.
Identify and Involve Key Stakeholders

Recognize the key stakeholders: customers, employees, stockholders, union (if any), management, sup-
pliers, and community.
Give special consideration to the workforce in implementing Lean initiatives.
Make stakeholders who are potentially affected by Lean initiatives especially aware and involved in
their development.
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This section of the Roadmap deals with creating the mental model and con- sive re-education effort will likely be required for the entire Enterprise.
ditions within the Enterprise that will enhance the successful implementation Lean may have an impact on organizational structure. Incentives must be
of Lean principles and practices. rationalized with the new behavior desired. There will be an impact on most
business systems, processes, and policies. Systems Dynamics modeling has
Both the structure and the behavior of Lean organizations are significantly demonstrated that structure drives behavior and that behavior, in turn, drives
different from those of mass-production organizations. The mass-production results.
mentality, so firmly embedded in the organization’s collective mindset, must
be relentlessly rooted out and banished. Mass-production principles and An Enterprise transformation of this magnitude will require careful planning,
practices must be unlearned. Lean principles and practices must be learned, phasing and execution. The change process itself must be carefully moni-
practiced, and perfected through continuous improvement efforts. An exten- tored, managed, and modified as required in light of actual outcomes.

Major Tasks within “Develop Lean Structure and Behavior”
Organize for Lean Implementation

Shift the organizational structure from a vertical focus (that supports the mass-production mentality) to a hor-
izontal focus (that supports a Lean mindset).
Establish Integrated Product/Process Development (IPPD) teams, aligned horizontally with the customer value
chain.
Eliminate unnecessary layers of management; decentralize decision-making.
Establish and empower a Lean Focus Office for facilitating the Lean initiative.
Identify and Empower Change Agents

Identify those in the organization who can effect positive transformational change.
Recognize the need to act at both the Enterprise and local levels.
Enlist the “best and brightest” who are most likely to develop a passion for the Lean transformation.
Communicate a common Lean vision and coordinated approach.
Align Incentives
Structure incentives to reward Lean behavior.
Remove disincentives.
Consider both monetary and non-monetary incentives.
Consider both individual and group (team) incentives.
Tie incentives to Lean metrics through visual scorecards.
Tie executive compensation to Lean performance metrics.
Adapt Structure and Systems

Apply Lean principles to redesign all Enterprise systems and processes.
Use the inherently simpler requirements of a Lean organization to reduce the complexity of
information/communication systems.
Redesign financial/accounting systems to be compatible with the Lean paradigm and to be aligned with
appropriate Lean metrics.
Bring policies and procedures into compliance with Lean.
Create and Refine Transformation Plan
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We are now transitioning from the Long Term Cycle to the Short Term Cycle ing the strategic and Lean visions. It will also draw heavily from the enter-
of the Roadmap. Having prepared the organization for implementing the prise-level value-stream mapping performed in the “Focus on Value Stream”
Lean paradigm in the Long Term Cycle, we are now in a position to develop, block.
implement, and monitor a comprehensive Enterprise-Level Plan to achieve
the desired transformation. Organizations embarking upon a Lean transformation initiative should con-
sider establishing and chartering a Lean Focus Office (or an office with a
In the “Adopt Lean Paradigm” block, the “need” to transition to the Lean par- similar name and function) to facilitate and coordinate the extensive set of
adigm comes from the relentless pressures to deliver value to customers who projects, programs, and activities that will be required. The Lean Focus
demand ever lower costs, ever shorter response cycles, ever higher quality, Office, reporting directly to the Enterprise Leader, is responsible for exercis-
and ever higher service after the sale. The Enterprise-Level Plan must be ing configuration control of the Enterprise-Level Plan
designed to address the explicit “need” previously established, thereby align-

Major Tasks within
“Create and Refine Transformation Plan”
Identify and Prioritize Lean Initiatives
Develop/refine descriptions of current state.
Develop/refine characteristics of the desired future state.
Create an Enterprise-level transition path based upon gap analysis.
Extend/translate needs (from gap analysis) to Enterprise-level activities.
Prioritize and sequence the activities.
Develop a time-phased schedule for the collective set of Enterprise Lean initiatives, with due consideration
to resource limitations.
Critically review all ongoing “movements” and initiatives for compatibility with Lean.
Commit Resources
Recognize that the primary resource required is the time of all individuals in the Enterprise.
Plan to meet all production commitments during the Lean transformation.
Allocate special resources as needed to accommodate increased workloads due to the Lean initiative.
Make a firm commitment to all resource needs.
Provide Education and Training

Establish a comprehensive, cohesive program of education and training for the entire Enterprise. Pay atten-
tion to its careful phasing.
Follow “just-in-time” principles in scheduling education and training events.
Modify the program and provide re-training as needed, based upon feedback.
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The second segment of the Short Term Cycle is where the process imple- oped. Detailed plans at the Enterprise level are linked to lower-level plans.
mentation and transformation begins. All previous stages have focused on The lower-level plans are prioritized and time-phased resources are pro-
setting the stage and preparing the organization for the changes in the vided within the framework of a comprehensive schedule. These plans are
value-stream activities that will now be affected. executed and monitored. Short-term corrective action is determined and
incorporated as necessary.
The Enterprise-Level Plan created in the previous segment provides the
broad parameters and directions for achieving the changes required to As we iterate through the Short Term Cycle, sub-level decomposition of the
respond to the identified critical needs. Within these parameters and over- Enterprise-Level Plan will change as the organization moves more and more
all schedule, specific short-term action plans and programs are now devel- toward a Lean state.

Major Tasks within “Implement Lean Initiatives”
Develop Detailed Plans

Map appropriate elements of Enterprise-Level Implementation Plan to core processes (horizontal organiza-
tional orientation).
Structure short-term action plans/projects that are detailed and specific.
Estimate time-phased resource requirements for each detailed plan.
Integrate the several detailed plans, generate prioritized schedule.
Provide resources.
Assign responsibility and accountability.
Incorporate needed education and training into the plans.
Implement Lean Activities

Launch detailed action plans, with coordination and facilitation provided by Lean Focus Office.
Challenge change agents and senior managers to identify and remove barriers to implementation.
Track progress against schedule milestones, display outcomes visibly, and broadcast successes.
Determine and implement short-term corrective action as required and modify overall plan as appropriate.
Resolve conflicts.
Provide “just-in-time” education and training.
Focus on Continuous Improvement
Page 122 of ?
© Copyright Massachusetts Institute of
This “oversight” segment is the third in the Short Term Cycle, and is critical- for, the flow will proceed along a second path, to the segment “Focus on the
ly important for long-term effectiveness and continuity. Only when the activ- Value Stream”. This path takes us back to the Long Term Cycle. When the
ities in this segment become a natural part of the Enterprise’s culture can the Lean transformation process becomes recognized as a keystone within the
organization achieve a significant state of being Lean. Enterprise’s strategic plan, a third flow path may occur through the segment
“Enterprise Strategic Planning” in the Entry/Reentry Cycle. This occurs when
This final segment in our Roadmap is in many ways the most critical. The first
the interaction of Enterprise-level strategy and Lean transformation become
attempt to create an Enterprise-Level Plan will not yield a categorical plan.
interdependent and strategic planning, now shaped by Lean implementation,
The organization will learn from various implementation initiatives.
itself may alter the Lean implementation process.
Modifications will be required.
Clearly, the overall Roadmap represents a never-ending process. It suggests
The flow from this segment may go in one of three directions. Ordinarily, it
a framework in which the organization learns from its past behavior, contin-
is back through the “Create and Refine Transformation Plan” segment, which
ually strives to become increasingly focused on delivering value to the cus-
exercises the short-term corrective action loop. At specified intervals and on
tomer, and is prepared to enter whatever cycle is required to continue its
those occasions when significant structural modifications seem to be called
journey toward its continuously updated vision.

Major Tasks within
“Focus on Continuous Improvement”
Monitor Lean Progress
Aggregate results from the implementation of detailed plans back to the Enterprise-Level Implementation
Plan.
Measure implementation progress against schedule and budget.
Detect significant deviations and determine their causes.
Institute corrective actions.
Direct senior managers to participate visibly in monitoring the metric performance and in heralding suc-
cesses.
Nurture the Process

Gain the support and encouragement of the Enterprise Leader and senior managers. These are essential,
especially when the transformation encounters significant difficulties.
Pay special attention to modified incentives and rewards: Are they working? Are they understood? Do they
need further modification?
Encourage entire workforce to offer suggestions for further improvements. Benefits gained from Lean imple-
mentation should be shared equitably between management and the workforce.
Make sure that specific issues/problems are dealt with by the Lean Focus Office.
Emphasize positive reinforcement.
Refine the Plan

Assess each element of the Enterprise-Level Implementation Plan.
Incorporate prescribed corrective actions; re-level resources if necessary.
Revise, eliminate, and add elements to the plan as appropriate.
Determine when a significant change or high-level re-think is needed; in such cases, revisit the Long Term
Cycle to determine the necessary modifications.
Capture and Adopt New Knowledge

Capture lessons learned (from both internal and external sources) and add to the Enterprise Knowledge
Base.
Translate and generalize lessons learned for incorporation into Enterprise decision processes, design rules,
operating rules, etc.
Provide input to the Enterprise Strategic Planning
Bringing it All Together: The Complete Roadmap
Page 124 of ?
Figure 8

Initial
Lean
Vision
Lean


The complete Enterprise-Level Transition-to-Lean Roadmap is reconstructed The most formidable obstacles on the road to Lean are likely to be people-
here. It illustrates a general “flow” of actions, decisions, and initiatives that related rather than technology-related. In fact, Lean is mostly about people
an organization may follow in pursuit of its own Lean transformation. and processes. That is why this Roadmap places great emphasis on prepar-
ing the organization for change by focusing on organizational and people
Every company has its own particular starting point and circumstances that issues that need to be addressed prior to launching lower-level initiatives.
will dictate how it approaches its Lean transition. The amount of time and
effort required to accomplish the various segments may vary considerably Eventually, the Entry zone of the Roadmap goes away. The ultimate goal is
from company to company. to embed Lean principles, practices, and behavior to such an extent that they
become “business as usual” (see next diagram).

Bringing it All Together: The Ongoing Lean Enterprise
Response to the voice

of the customer
Environmental Lean
Corrective Action Transformation
Indicators Framework
Detailed Corrective

Action Indicators

Once there is a “critical mass” of Lean behavior in the Enterprise, Lean illustrates the important concept of capitalizing on “lessons learned” that
becomes a “way of life” — the way things are done. This final Roadmap are being accumulated in the Enterprise Knowledge Base on an ongoing
diagram eliminates the segment called “Adopt Lean Paradigm,” since this basis, and acknowledging that ultimately the Lean transformation will
has now been accomplished. Lean has become the fundamental, collective become an integral part of the Enterprise’s success strategy. Also, the sig-
mental mindset of the Enterprise. However, it is important that new nificant impact that Lean implementation is now having on total Enterprise
Enterprise leaders and senior managers individually enter the “Adopt Lean performance can be reflected in future strategic opportunities and plans.
Paradigm” block, so that they understand and enthusiastically embrace the
Lean paradigm. Enterprise Strategic Planning and Lean are now linked explicitly to the
ongoing and never-ending process of continually fine-tuning the way the
The Roadmap now includes a feedback loop from the Short Term Cycle Enterprise delivers value to its customers.
back to “Enterprise Strategic Planning,” now called the Reentry Cycle. This
Page 125 of ?
Appendix D – Comparison of LESAT to Other
Assessment Approaches
This appendix presents comparisons of LESAT to other approaches that are currently being used to evaluate the over-
all performance of organizations.
The first set of tables compares LESAT to the Malcolm Baldrige Criteria and the ISO 9004 Quality Management
Systems Guidelines.
The second set of tables compares LESAT to the European Foundation for Quality Management Excellence Model
criteria. This comparison was performed by Dr. Martin Womersley of the University of Warwick and the U.K. Lean
Aerospace Initiative and is included here with permission.
Baldrige National Quality Program 2001 Criteria for Performance Excellence and ISO
9004:2000 Quality Management Systems-Guidelines
A comparison of the practices of the LESAT self-assessment tool was performed against the Baldridge
categories/items and the ISO 9004 guideline paragraphs. The purpose of the review was to highlight areas of
commonality and also to demonstrate that there are areas that the LESAT practices address that are not covered by
the other standards. Each of the models may be used by an organization simultaneously without detriment because
of the different focus being applied in each model. LESAT is the only model specifically targeting the highest levels
of management and the practices associated with the transformation to a Lean enterprise. An enterprise that devel-
ops and deploys lean practices should find that their Baldridge assessment scores would improve significantly. The
enterprise will also improve the overall quality of their processes with an attendant increase in effectiveness and effi-
ciency. It is also significant that there are no areas or practices where there is a conflict.
The below comparisons are by no means definitive. Different organizations performing the same comparison might
record slight differences in the paragraphs referenced against the lean practices since each model will be inter-
preted and applied as most appropriate for that enterprise.

Comparison of Lean Enterprise Self-Assessment Tool (LESAT) with Baldridge National Quality Program 2001
Criteria for Performance Excellence and ISO 9004:2000 Quality management systems-Requirements
LESAT Baldridge ISO 9004:2000

Section I- Lean Transformation/Leadership
I.A.1 Integration of Lean in Strategic Planning Process 2.1.a,b 5.4; 5.6
I.A.2 Focus on Customer Value 3.1.a.(2) 5.2; 7.2; 8.2.1.2
I.A.3 Leveraging the Extended Enterprise NSA* 6.6

I.B.1 Learning and Education in Lean for Enterprise Leaders 5.2.a.(3) 6.2.2
I.B.2 Senior Management Commitment 1.1.a.(1)&(2) 5.1.1; 5.1.2
I.B.3 Lean Enterprise Vision 1.1.a.(1) 5.1.1
I.B.4 A Sense of Urgency 1.1.b.(1) 5.1

I.C.1 Understanding the Current Value Stream NSA* 5.1.2; 7.1
I.C.2 Enterprise Flow NSA* 5.1.2; 7.1
I.C.3 Designing the Future Value Stream NSA* 7.1
I.C.4 Performance Measures 1.1.b.(1); 2.2.a.(4); 4.1.a 5.1.1; 8.2

I.D.1 Enterprise Organizational Structure NSA* NSA*
I.D.2 Relationships Based on Mutual Trust NSA* 5.2; 5.3.3; 6.6
I.D.3 Open and Timely Communication NSA* 5.1.1; 5.2.2; 5.3.3
I.D.4 Employee Empowerment 1.1.a.(2) 5.5.1; 6.2.1;8.5.4
I.D.5 Incentive Alignment 5.1.a.(3) NSA*
I.D.6 Innovation Encouragement 1.1.b.(2); 5.1.a.(1) 6.2.1; 8.5.4
I.D.7 Lean Change Agents NSA* NSA*

I.E.1 Enterprise Level Lean Implementation Plan NSA* 5.4.2
I.E.2 Commit Resources for Lean Implementation NSA* 6
I.E.3 Provide Education and Training 5.2 (all) 6.2.2
I.F. Implement Lean Initiatives NSA*

I.F.1Development of Detailed Plans Based on Enterprise Plan 2.2.a.(1) NSA*
I.F.2 Tracking Detailed Implementation 2.2.a.(4) 8.4

I.G.1 Structured Continuous Improvement Processes NSA* 8.5.4
I.G.2 Monitoring Lean Progress 1.1.b.(2)&(3); 2.2.b.(3) 5.1; 8.4
I.G.3 Nurturing the Process 1.1.a.(2) 5.1; 8.5.4
I.G.4 Capturing Lessons Learned NSA 5.2.4;
I.G.5 Impacting Enterprise Strategic Planning 2.1 all 5.6.1; 5.6.2; 5.6.3
* Not specifically addressed (NSA)

LESAT Baldridge ISO 9004:2000
Section II-Life-Cycle Processes
II.A.1 Leverage Lean Capability for Business Growth 6.2.a.(6) 5.6.3; 7.2
II.A.2 Optimize the Capability and Utilization of Assets 6.1.b.(5); 6.2.a.(6); 6.3.a.(7); 6; 8.2.4; 8.5.4
II.A.3 Provide Capability to Manage Risk, Cost, Schedule and Performance 4.1.a&b; 5.6.3; 6.1.2; 7.1.3; 7.3.1
II.A.4 Resource and Empower Program Development Efforts NSA* 6.1.2; 7.3

II.B.1 Establish a Requirement Definition Process to Optimize Life-cycle Value 3.1.a 5.2.2; 7.2; 7.3
II.B.2 Utilize Data from the Extended Enterprise to NSA* 8.2.3; 8.4; 8.5.3
Optimize Future Requirements Definitions
II.C Develop Product and Process

II.C.1 Incorporate Customer Value into Design of Products and Processes 6.1.a; 6.2.a.2; 6.3.a 5.2; 7.2; 7.3
II.C.2 Incorporate Downstream Stakeholder Values (Manufacturing, Support, etc.) 6.1; 6.2; 6.3 6.6; 7.2; 7.3
into Products and Processes
II.C.3 Integrate Product and Process Development 6.1; 6.2;.6.3 6.1.2;
II.D. Supply Chain Management

II.D.1 Define and Develop Supplier Network 2.1.a.(2); 7.4.a.(1) 5.2.2; 5.6.2; 6.6;7.4
II.D.2 Optimize Network-wide Performance 6.1.b.(3)&(5); 6.2.a.(4); 5.2.2; 5.6.2; 6.6; 8.2.4;
7.4.a.(1) 8.4
II.D.3 Foster Innovation and Knowledge-sharing throughout the Supplier Network 6.2.a.(2) 6.6; 7.4; 8.2.4
II.E Produce Product

II.E.1 Utilize Production Knowledge and Capabilities for Competitive Advantage 1.1.b; 6.1.b.(3)&(5) 7.1.2; 8.2.2; 8.4; 8.5.2
II.E.2 Establish and Maintain a Lean Production System 6.1.b.5 7.1.3; 7.2; 8.2.2
II.F Distribute and Service Product

II.F.1 Align Sales and Marketing to Production 3.1; 7.2 7.2; 8.2.1.2
II.F.2 Distribute Product in Lean Fashion 6.1.b.(2)&(5) NSA*
II.F.3 Enhance Value of Delivered Products and Services 3.1a.(2); 6.1.b.(5) 5.2; 5.6; 7.2; 8.2
to Customers and the Enterprise
II.F.4 Provide Post-Delivery Service, Support and Sustainability NSA* 7.2; 7.3
Section III-Enabling Infrastructure

III.A. Lean Organization Enablers
III.A.1 Financial System Supports Lean Transformation 7.2.a 6.8; 8.2.1.4
III.A.2 Enterprise Stakeholders Pull Required Financial Measures 4.2.a.1&7.2.a 6.8; 8.2.1.4; 8.2.4; 8.4
III.A.3 Promulgate the Learning Organization 5.1.a.(5)&5.2 all 5.4; 6.1; 6.2; 7.1; 8.5.4
III.A.4 Enable the Lean Enterprise with IT Systems and Tools 4.2 all 6.1.2; 6.3; 6.5
III.A.5 Integration of Environmental Protection, Health and Safety into the Business 5.3.a.&1.2 all 5.2.2; 5.2.3; 6.3
III.B Lean Process Enablers

III.B.1 Process Standardization 6.1&6.3 7.1.2; 7.1.3; 7.5; 8.1
III.B.2 Common Tools and Systems NSA* 4.1; 5.4; 7.1; 7.3; 6.6
III.B.3 Variation Reduction 6.1 8.4; 8.5
* Not specifically addressed (NSA)

Note 1: Comparison of LESAT to Baldridge: LESAT is focused on the use of ‘lean’ principles and practices
to achieve the best value for the enterprise and its stakeholders. LESAT was written to emphasize the lean princi-
ples and practices, recognizing that they must be used in conjunction with good business practices to achieve the
optimal value. Baldridge does not have a “lean” practice and principal focus. The Baldridge criteria are built on
a set of interrelated Core Values and Concepts embedded in the beliefs and behaviors of high-performing organi-
zations. These beliefs and behaviors would of course include “lean” practices and behaviors but are not written
using the LAI lean terms and definitions. They both are meant to assess and encourage continual organizational
improvement. The comparison was performed by evaluating the 18 Item descriptions and 29 areas of Baldridge
to the practices and maturity levels of the LESAT. In some cases the wording was very similar, while in others the
Baldridge wording was different but the same intent could be derived. Credit was given if there was partial map-
ping. It was also found that in some cases where Not Specifically Addressed (NSA) was indicated that the Baldridge
explanatory comments might encompass the lean practice but the item and area words did not. There were no
areas where the LESAT and Baldridge disagreed since they were both accepting of innovation and different
approaches if positive results could be attained.
Note 2: Comparison of LESAT to ISO 9004:2000: ISO 9004, Quality management systems- Guidelines for
performance improvements gives guidance on a wide range of objectives for a quality management system and is
written with an emphasis on developing, implementing and improving the effectiveness and efficiency of the quality
system. It promotes a process approach and a global view of quality management systems that encompass the entire
enterprise. Additionally, ISO 9004 promotes a self-assessment by management for use in continual improvement.
This focus clearly aligns with the intent of the practices of the LESAT self-assessment tool. ISO 9004 utilizes a differ-
ent set of terminology than LESAT but does encourage the adoption of practices and behaviors that are similar to
those included in “lean”. ISO 9004 is based on the following eight quality management principle: Customer focus,
leadership, involvement of people, process approach, systems approach to management, continual improvement, fac-
tual approach to decision making, and mutually beneficial supplier relationships. These are also consistent with the
LESAT tool. The comparison revealed a great similarity in the topics covered but LESAT had practices and maturity
level considerations that were not addressed by the ISO standard. There is no conflict between the two and they are
in fact complementary.

Attachment 1a and 1b: Contents lists for Baldridge and ISO 9004:
These attachments contain the paragraph headings for the Baldridge and ISO 9004 documents.
Attachment 1a
Baldridge National Quality Program, Criteria for Performance Excellence, -Item Listing:
1 Leadership
Organizational Leadership
Public Responsibility and Citizenship
2 Strategic Planning
2.1 Strategy Development
2.2 Strategy Deployment
3 Customer and Market Focus
3.1 Customer and Market Knowledge
3.2 Customer Relationships and Satisfaction
4 Information and Analysis
4.1 Measurement and Analysis of Organizational Performance
4.2 Information Management
5 Human Resource Focus
5.1 Work Systems
5.2 Employee Education, Training and Development
5.3 Employee Well-Being and Satisfaction
6 Process Management
6.1 Product and Service Processes
6.2 Business Processes
6.3 Support Processes
7 Business Results
7.1 Customer-Focused Results
7.2 Financial and Market Results
7.3 Human Resource Results
7.4 Organizational Effectiveness Results

Attachment 1b
ISO 9004, Quality management systems-
Guidelines for performance improvements-
Contents:
1 Scope 6.4 Work environment
2 Normative Reference 6.5 Information
3 Terms and definitions 6.6 Suppliers and partnerships
4 Quality management system 6.7 Natural resources
4.1 Managing systems and processes 6.8 Financial resources
4.2 Documentation 7 Product realization
4.3 Use of quality management principles 7.1 General guidance
5 Management responsibility 7.2 Processes related to interested parties
5.1 General guidance 7.3 Design and development
5.2 Needs and expectations of interested parties 7.4 Purchasing
5.3 Quality policy 7.5 Production and service operations
5.4 Planning 7.6 Control of measuring and monitoring devices
5.5 Responsibility, authority and communication 8 Measurement, analysis and improvement
5.6 Management review 8.1 General guidance
6 Resource management 8.2 Measurement and monitoring
6.1 General guidance 8.3 Control of nonconformity
6.2 People 8.4 Analysis of data
6.3 Infrastructure 8.5 Improvement

European Foundation for Quality Management (EFQM) Excellence Model (EM)
The cross-comparison shown here provides companies with a common starting point for the adoption of LESAT in
a business excellence environment, as defined by the European Foundation for Quality Management (EFQM). This
is intended to facilitate the use of the information contained in LESAT in either a business excellence environment or
ease the transition between the two models. In the former case the business excellence assessment criteria can be
supplemented by LESAT practices important for a transition to lean and the five competence levels for each practice
used to help define long and short-term targets. In the later case a company using LESAT can display their lean com-
petence in an EFQM format if desired by an external supplier / customer.
Our conclusions of the significant and subsidiary relationships that exist between the EFQM Excellence Model and
LESAT are shown in a comparison grid and practice table below. Where the primary intent or focus of a LESAT
practice matches with an EFQM practice, the relationship is marked in black text or by a black square. Where the
primary intent of a LESAT practice does not match directly with an EFQM practice, but strongly influences the
achievement of success of that practice, the relationship is marked in gray text or by a gray square.
EFQM EM vs. LESAT Practice Table
EFQM Practices Related LESAT Practices
1a. Leaders develop the mission, I.B.1. Learning and education in “lean” for enterprise leadership
EFQM Criteria
vision and values and are role mod- I.B.3. Lean enterprise vision
els of a culture of excellence. I.B.4. A sense of urgency
1b. Leaders are personally involved I.D.1. Enterprise organizational orientation

in ensuring the organization’s man- I.D.2. Relationships based on mutual trust
agement system is developed, imple- I.D.3. Open and timely communications
mented and continually improved. I.F.2. Tracking detailed implementation
I.G.1. Structured continuous improvement process
II.A.3. Provide capability to manage risk, cost, schedule and performance
II.A.4. Allocate Resources for program development efforts
1. Leadership (10%)
I.B.1. Learning and education in “lean” for enterprise leadership

I.G.2. Monitoring lean progress
III.B.1. Process standardization
1c. Leaders are involved with their II.C.2. Incorporate downstream stakeholder values into products and
customers, partners and representa- processes
tives of society.
1d. Leaders motivate, support and I.B.2. Senior management commitment
recognize the organization’s people. I.G.3. Nurturing the process
I.B.4. A sense of urgency
Page 132 of ? Massachusetts Institute of Technology,

© Copyright 2001Massachusetts Institute of
© Copyright Page 132 of 166
EFQM Criteria
2a. Policy and strategy are based I.A.1. Integration of lean in strategic planning process
on the present and future needs I.A.2. Focus on customer value
and expectations of stakeholders. I.E.1. Enterprise level lean transformation plan
II.D.1. Define and develop supplier network
II.A.1. Leverage lean capability for business growth
II.D.3. Foster innovation and knowledge-sharing throughout the supplier
network
2b. Policy & strategy are based on I.G.5. Impacting enterprise strategic planning
information from performance I.C.4. Performance measures
measurement, research, learning I.E.1. Enterprise level lean transformation plan
and creativity related activities. II.A.1. Leverage lean capability for business growth
II.D.2. Optimize network-wide performance
III.A.3. Promulgate the learning organization
2. Policy & Strategy (9%)
2c. Policy & strategy are devel- II.A.1. Leverage lean capability for business growth
oped, reviewed and, updated. II.E.1. Utilize production knowledge and capabilities for competitive advan-
I.G.2. Monitoring lean progress tage
III.B.2. Common tools and systems
I.A.1. Integration of lean in strategic planning process
I.A.3. Leveraging the extended enterprise
III.B.1. Process standardization
2d. Policy & strategy are deployed I.E.2. Commit resources for lean improvements
through a framework of key I.E.3. Provide education and training
processes. 2e. Policy & strategy are communicated and implemented.
I.F.1. Development of detailed plans based on enterprise plan
3a. People resources are planned, II.A.2. Optimize the capability and utilization of assets
managed and improved. I.F.1. Development of detailed plans based on enterprise plan
II.C.3. Integrate product and process development
3b. People’s knowledge and III.A.3. Promulgate the learning organization

competencies are identified, I.D.7. Lean change agents
3. People (8%)
developed and sustained. I.E.3. Provide education and training
3c. People are involved and empow- I.D.6. Innovation encouragement

ered. I.D.4. Employee empowerment
3d. People and the organization I.D.2. Relationships based on mutual trust
have a dialogue. I.D.3. Open and timely communications
3e. People are rewarded, recog- I.G.3. Nurturing the process

nized and cared for. I.D.5. Incentive
alignment

4a. External partnerships I.A.3. Leveraging the extended enterprise

EFQM Criteria
are managed. II.D.2. Optimize network-wide performance

I.D.2. Relationships based on mutual trust
I.D.3. Open and timely communications
II.C.2. Incorporate downstream stakeholder values into products and processes
II.D.1. Define and develop supplier network
4b. Finances are managed. I.C.4. Performance measures

I.E.2. Commit resources for lean improvements
III.A.1. Financial system supports lean transformation
III.A.2. Enterprise stakeholders pull required financial information
4c. Building equipment and II.A.2. Optimize the capability and utilization of assets
material are managed. II.F.2. Distribute product in lean fashion
I.C.2. Enterprise flow
II.E.2. Establish and maintain a lean production system
4. Partnership & Resources (9%)
4d. Technology is managed. II.A.3. Provide capability to manage risk, cost, schedule and performance
II.D.3. Foster innovation and knowledge-sharing throughout the supplier network
4e. Information and I.G.4. Capturing lessons learned

knowledge are managed. II.B.2. Utilize data from the extended enterprise to optimize future requirement
definitions
II.F.1. Align sales and marketing to production
III.A.2. Enterprise stakeholders pull required financial information
I.C.2. Enterprise flow
II.C.2. Incorporate downstream stakeholder values into products and processes
II.F.4. Provide post delivery service, support and sustainability
III.A.4. Enable the lean enterprise with information systems and tools

5a. Processes are systemat- I.C.1. Understanding the current value stream
EFQM Criteria
ically designed and man- I.C.3. Designing the future value stream
aged. I.C.4. Performance measures
II.E.2. Establish and maintain a lean production system
II.F.3. Enhance value of delivered products and services to customers and the enterprise
III.A.5. Integration of environmental protection, heath and safety into the business
I.G.1. Structured continuous improvement process
II.B.1. Establish a requirement definition process to optimize lifecycle value
5b. Processes are improved I.C.2. Enterprise flow

as needed using innovation I.C.3. Designing the future value stream
in order to fully satisfy and I.D.6. Innovation encouragement
generate increasing value I.D.7. Lean change agents
for customers and other III.B.1. Process standardization
stakeholders. III.B.3. Variation reduction
I.A.2. Focus on customer value
I.C.1. Understanding the current value stream
I.F.1. Development of detailed plans based on enterprise plan
5c. Products and services II.B.1. Establish a requirement definition process to optimize lifecycle value
are designed and devel- II.C.1. Incorporate customer value into design of products and processes
oped based on customer II.C.2. Incorporate downstream stakeholder values into products and processes
needs and expectations. II.B.2. Utilize data from the extended enterprise to optimize future requirement definitions
5d. Products and services II.D.2. Optimize network-wide performance

are produced, delivered II.E.2. Establish and maintain a lean production system
and serviced. II.F.4. Provide
5. Processes (14%)
II.F.1. Align sales and marketing to production

post delivery service, sup- II.F.2. Distribute product in lean fashion
port and sustainability II.F.3. Enhance value of delivered products and services to customers and the enterprise
5e. Customers relations are I.D.2. Relationships based on mutual trust

managed & enhanced. I.D.3. Open and timely communications
II.C.1. Incorporate customer value into design of products and processes
II.F.3. Enhance value of delivered products and services to customers and the enterprise
6.
Customer 6a. Perception Measures. I.C.4. Performance measures
Results III.A.1. Financial system supports lean transformation
6b. Performance Indicators
(internal indictors)

EFQM
Criteria EFQM Practices Related LESAT Practices
7. People 7a. Perception Measures. I.C.4. Performance measures

(9%) 7b. Performance Indicators
8. Society 8a. Perception Measures. I.C.4. Performance measures

(6%) 8b. Performance Indicators II.D.2. Optimize network-wide performance
9. Key 9a. Key performance outcomes. I.F.2. Tracking detailed implementation

Performance I.G.2. Monitoring lean progress
Results (15%)
9b. Key performance indicators I.C.4. Performance measures
(internal indictors) III.A.1. Financial system supports lean transformation
Reference:
“Introducing Excellence” European Foundation for Quality Management,
2001

Appendix E – LESAT Assessment Aids
E.1 - Sample Agenda and Guidelines for Enterprise LESAT Sessions
E.2 - LESAT Summary Sheets
- Single Page Summary Sheet
- Multiple Page Summary Sheet
E.3 - LESAT Calculator for Data Entry/Consolidation
E.4 - Site Visit Alternatives for Analyzing and Displaying Data

E.1 - Sample Agenda and Guidelines
for Enterprise LESAT Sessions
On the following pages are sample agendas and guidelines prepared by one of the LAI
consortium member companies during the LESAT Beta testing in the spring of 2001.
All information that might identify the company has been removed. Some of the informa-
tion references the LESAT Beta version and may not agree with page numbers, section num-
bers, etc. of LESAT Version 1.0.

Guidelines for LESAT Kickoff Meeting
Preparation
Make sure meeting is set up to include the Business Unit Executive and the Level I and the Level II Managers
Schedule the meeting for 2 hours.
Decide ahead of time with the Lean director whether the level II’s should complete the scoring form on line,
or on paper.
Review meeting with Lean director.
Make sure the Lean director knows that the data will come back to them and that they should put it togeth-
er. Assist as needed.
Make sure you or the Lean director have prepared packets (LESAT Materials) for each level II. The packets
should include:
1 copy of the scoring sheets (Part V LESAT Assessment Aids)
1 copy of the Lean assessment guidelines ( our document)
# of copies of LESAT booklet. Number defined by number of reports the level II will have at the
assessment meeting.
1 set of instructions for completing the assessment
1 clear schedule of the delivery dates and the dates of the final meeting
Running the meeting

1. At the meeting use the following agenda:
Opening remarks
Slide presentation of what the tool is and why we use it
Outline booklet and score keeping methods (elec. or paper)
Review logistics, where to send scores, when, etc.
Things to remember
In the opening remarks make sure they understand that this assessment is being done to prepare them for
their input to their 2002 Lean plan that we will be reviewing with their Manager in August.
During the slides show the other companies who contributed to the assessment, how the pages are arranged,
and how to do the scoring. I have a good set of the materials, come by and borrow them.
Depending on whether the Lean director wants electronic responses or paper, instruct the level II’s in how to
complete and return the score.
Put the onus on the Lean director to tabulate the scores and take care of the data. Let’s get them thinking of
this as their assessment.
Give them a clear idea of the deliverable dates.
Remember to offer help with their questions later.
Refer to the Lean assessment guidelines, make sure everyone agrees on the meaning of the terms.

Instructions for Completing LESAT Assessment
Notes:
Determine time for team to meet. One or more meetings may be required. Total time usually takes approx.
5-8 hours.
The tool has three sections. Section I has 28 items, Section II has 18 items, and Section III has 8 items.
Refer to the Lean assessment guidelines for definitions and scoring conventions.
Provide everyone with copies of the LESAT (lean enterprise self-assessment tool) Version 1.0. They will need
this to read from.
Section I begins on page 15 of the LESAT
Section II begins on page 32 of the LESAT
Section III begins on page 43 of the LESAT
The assessment:
Complete the assessment by sections.
Read the Lean attribute, diagnostic questions, and Lean indicators.
Then read the Lean practices and descriptions of levels 1-5 for that particular practice.
Discuss the levels among the group and develop consensus on a score.
Record the score in the appropriate location in the scoring sheets. Be sure to place the actual score in the
present level location.
Discuss and reach consensus on the desired level and record that score in the position for desired in the
scoring sheet.
Record evidence for your scores in the area provided in the scoring sheets.
Complete the scoring for each of the Lean practices in the section.
Once the scores are entered for a section, determine the averages for that section and record in the appro-
priate spot in the scoring sheets.
Develop and record some ideas for suggested actions for making improvements for your business units.
Continue to work by sections until complete.
Send the finished data to (Name of Lean Facilitator)

Guidelines for LESAT Wrap-up Meeting
Preparation
Have Lean director set up logistics, room, food, etc.
Plan on 6 hours with the following general agenda:

7:30-7:45 Introductions/overview of the day
7:45-9:00 Compositing score of section 1
9:00-9:15 Break
9:15-10:30 Compositing score of section 2
10:30-11:00 Compositing of section 3
11:00-12:00 Review of suggested improvements
12:00-12:45 Lunch
12:45-1:30 Review of overall composite data
1:30-2:30 Align with 2002 Lean plan/next steps
Work with the Lean director to determine presentation of composite data and improvement ideas. Some
groups have graphs or spreadsheets, etc.
It is a good idea to composite the suggested improvements from the scoring sheet to speed the meeting
Running the meeting
1. Follow the agenda

2. Get a consensus
3. Make sure they understand that this is their tool for preparing 2002 plan
4. Ask for feedback on the assessment process

Agenda for LESAT Wrap-up Meeting
7:30-7:45 Introductions/overview of the day

7:45-9:00 Compositing score of Section 1
9:00-9:15 Break
9:15-10:30 Compositing score of Section 2
10:30-11:00 Compositing of Section 3
11:00-12:00 Review of suggested improvements
12:00-12:45 Lunch
12:45-1:30 Review of overall composite data
1:30-2:30 Align with 2002 Lean plan/next steps
Section 1 has 28 items

My initial take is that we crunch the data from the 5-6 different groups, facilitating it tightly to a schedule that allows
a maximum of 5 minutes discussion per item. Then we run the rest similar to a value stream future state. We brain-
storm what we learned from the assessment and then tie it into an overall Lean plan for the Business Unit for fiscal
2002. Now we are doing the assessment 4 months prior to the start of fiscal 2002, so we may want to amend it
to final quarter 2001 and all of 2002.
Compositing- each of the direct reports will have a score sheet covering all of the Business Unit. So if we ask each
of the 6 managers to give their scores, write them down and then allow 2-3 minutes resolution discussion, we can
move through the items in a timely manner. Each person can keep score as we go along.
Brainstorming- having just finished the assessment, we can move into trying to isolate the 2-3-4-? areas that we
need to focus on to make credible improvements in the next 15 months. Not too detailed, but to a degree where
this group of leaders can verbalize in their minds what the whole BU is going to try and improve.
Next steps- A discussion to mate together the areas for improvement, with their existing Lean plan (for alignment),
followed by a plan for modifying/developing a plan of value streams/Lean events to pursue over the 15 months,
with a clear set of metrics to follow to determine success or midstream changes needed.

E.2 - LESAT Summary Sheets
The LESAT summary sheets provide a means for organizing the LESAT results into a comprehensive list for review
by the enterprise leadership. In this section of Appendix D two options are presented as helpful ways of summariz-
ing the LESAT data. The first option is a single page summary that contains all of the LESAT practices. The lean prac-
tice and the average current enterprise level for each practice are presented. The use of scoring bins allows the entry
of the data to act as a visual indicator of where the enterprise ranks itself high or low in the assessment process.
While the type is small on this page, it can easily be enlarged to fit an 11” x 17” sheet and has the benefit of being
a single piece of paper to carry around. A blank version of this single page summary sheet and a sample version
with some example data are provided for your convenience.
The second option presented in this section is a multiple page version of the summary sheet. This option has the ben-
efit of containing the current and desired results along with a characteristic indicator for each practice. This helps
the enterprise leaders understand what characteristic they should be trying to achieve in their transformation
process. Additionally, the use of multiple pages makes the document easier to read due to the larger print than in
the single page version discussed above. The downside to this option is that it requires multiple pages to account
for all of the data. A blank version of the multiple page summary sheet and a sample version with some example
data are also included in this section.

Lean Competence
LESAT SUMMARY SHEET
Level Level Level Level Level
Sub-Sections Lean Practices 1 2 3 4 5
I.A. Enterprise I.A.1. Integration of lean in strategic planning process
Strategic I.A.2. Focus on customer value
Planning I.A.3. Leveraging the extended enterprise
I.B. Adopt Lean I.B.1. Learning and education in “lean” for enterprise leadership
Paradigm I.B.2. Senior management commitment
I.B.3. Lean enterprise vision
I.B.4. A sense of urgency
I.C. Focus on the I.C.1. Understanding the current value stream

Value Stream I.C.2. Enterprise flow
I.C.3. Designing future value stream
I.C.4. Performance measures
I.D. Develop Lean I.D.1. Enterprise organizational orientation

Structure & I.D.2. Relationships based on mutual trust
Behavior I.D.3. Open and timely communications
I.D.4. Employee empowerment
I.D.5. Incentive alignment
I.D.6. Innovation encouragement
I.D.7. Lean change agents
I.E. Create & Refine I.E.1. Enterprise-level lean transformation plan

Transformation I.E.2. Commit resources for lean improvements
Plan I.E.3. Provide education and training
I.F. Implement I.F.1. Development of detailed plans based on enterprise plan

Lean Initiatives I.F.2. Tracking detailed implementation
I.G. Focus on I.G.1. Structured continuous improvement processes

Continuous I.G.2. Monitoring lean progress
Improvement I.G.3. Nurturing the process
(I) LEAN TRANSFORMATION / LEADERSHIP

I.G.4. Capturing lessons learned
I.G.5. Impacting enterprise strategic planning
Page 144 of 166 LESAT SUMMARY SHEET
Lean Competence
LESAT SUMMARY SHEET
I.A. Enterprise I.A.1. Integration of lean in strategic planning process 2.4
Strategic I.A.2. Focus on customer value 2.6
Planning I.A.3. Leveraging the extended enterprise 1.8
I.B. Adopt Lean I.B.1. Learning and education in “lean” for enterprise leadership 1.9
Paradigm I.B.2. Senior management commitment 2.1
I.B.3. Lean enterprise vision 2.0
I.B.4. A sense of urgency 3.2
I.C. Focus on the I.C.1. Understanding the current value stream 3.1
Value Stream I.C.2. Enterprise flow 1.4
I.C.3. Designing future value stream 2.2
I.C.4. Performance measures 2.7
I.D. Develop Lean I.D.1. Enterprise organizational orientation 2.1

Structure & I.D.2. Relationships based on mutual trust 2.0
Behavior I.D.3. Open and timely communications 1.8
I.D.4. Employee empowerment 1.9
I.D.5. Incentive alignment 2.3
I.D.6. Innovation encouragement 2.9
I.D.7. Lean change agents 3.2
I.E. Create & Refine I.E.1. Enterprise-level lean transformation plan 2.2
Transformation I.E.2. Commit resources for lean improvements 2.4
Plan I.E.3. Provide education and training 1.2
I.F.1. Development of detailed plans based on enterprise plan 1.4

I.F. Implement
Lean Initiatives I.F.2. Tracking detailed implementation 1.3
I.G.1. Structured continuous improvement processes 2.2

I.G. Focus on
Continuous I.G.2. Monitoring lean progress 2.7
Improvement I.G.3. Nurturing the process 1.5
1.3
(I) LEAN TRANSFORMATION / LEADERSHIP

I.G.4. Capturing lessons learned
I.G.5. Impacting enterprise strategic planning 1.9
Lean Competence
LESAT SUMMARY SHEET
II.A. Business II.A.1. Leverage lean capability for business growth
Acquisition and II.A.2. Optimize the capability and utilization of assets
Program II.A.3. Provide capability to manage risk, cost, schedule and performance
Management II.A.4. Allocate resources for program development efforts
II.B. Requirements II.B.1. Establish a requirement definition process to optimize lifecycle value
Definition II.B.2. Utilize data from extended enterprise to optimize future requirement definitions
II.C. Develop II.C.1. Incorporate customer value into design of products and processes
Product & II.C.2. Incorporate downstream stakeholder values into products and processes
Process II.C.3. Integrate product and process development
II.D. Manage II.D.1. Define and develop supplier network

Supply Chain II.D.2. Optimize network-wide performance
II.E. Produce II.E.1. Utilize production knowledge and capabilities for competitive advantage
Product II.E.2. Establish and maintain a lean production system
II.F. Distribute & II.F.1. Align sales and marketing to production

Service Product
(II) LIFE-CYCLE PROCESSES

II.F.2. Distribute product in lean fashion
II.F.3. Enhance value of delivered products and services to customers & the enterprise
III.A.Lean III.A.1. Financial system supports lean transformation

Organizational III.A.2. Enterprise stakeholders pull required financial information
Enablers III.A.3. Promulgate the learning organization
III.B.Lean Process III.B.1. Process standardization

Enablers III.B.2. Common tools and systems
INFRASTRUCTURE
(III) ENABLING
III.B.3. Variation reduction
Lean Competence
LESAT SUMMARY SHEET
II.A. Business II.A.1. Leverage lean capability for business growth 2.3
Acquisition and II.A.2. Optimize the capability and utilization of assets 2.5
Program II.A.3. Provide capability to manage risk, cost, schedule and performance 2.6
Management II.A.4. Allocate resources for program development efforts 2.2
II.B. Requirements II.B.1. Establish a requirement definition process to optimize lifecycle value 2.1
Definition II.B.2. Utilize data from extended enterprise to optimize future requirement definitions 2.4
II.C. Develop II.C.1. Incorporate customer value into design of products and processes 1.6
Product & II.C.2. Incorporate downstream stakeholder values into products and processes 1.9
Process II.C.3. Integrate product and process development 2.5
II.D. Manage II.D.1. Define and develop supplier network 2.5

Supply Chain II.D.2. Optimize network-wide performance 2.9
II.D.3. Foster innovation and knowledge-sharing throughout the supplier network 2.1
II.E. Produce II.E.1. Utilize production knowledge and capabilities for competitive advantage 1.8
Product II.E.2. Establish and maintain a lean production system 1.3
II.F. Distribute & II.F.1. Align sales and marketing to production 2.0
Service Product
(II) LIFE-CYCLE PROCESSES

II.F.2. Distribute product in lean fashion 2.0
II.F.3. Enhance value of delivered products and services to customers & the enterprise 2.4
II.F.4. Provide post delivery service, support and sustainability 3.1
III.A.Lean III.A.1. Financial system supports lean transformation 2.9

Organizational III.A.2. Enterprise stakeholders pull required financial information 2.7
Enablers III.A.3. Promulgate the learning organization 2.4
III.A.4. Enable the lean enterprise with information systems and tools 2.5
III.A.5. Integration of environmental protection, heath and safety into the business 2.1
III.B.Lean Process III.B.1. Process standardization 1.4

Enablers III.B.2. Common tools and systems 1.5
INFRASTRUCTURE
(III) ENABLING
III.B.3. Variation reduction 2.1
LESAT Enterprise Self-Assessment Tool (LESAT)
SECTION I SUMMARY SHEET - LEAN TRANSFORMATION/LEADERSHIP
Process Definition: Develop and deploy lean implementation plans throughout the enterprise leading to (1) long-term sustainability,
(2) acquiring competitive advantage and (3) satisfaction of stakeholders.
CAPABILITY LEVEL
TTL Link Lean Practice Lean Characteristic Current Desired
I.A. Enterprise I.A.1 Integration of Lean in Lean impacts growth, profitability and market
Strategic Planning strategic planning process penetration
I.A.2 Focus on customer value Customers pull value from enterprise value stream
I.A.3 Leveraging the extended enterprise Value stream extends from customer through the
enterprise to suppliers
Average
I.B. Adopt Lean I.B.1 Learning and education in “Lean” “Unlearning” the old, learning the new
Paradigm for enterprise leaders
I.B.2 Senior management commitment Senior management leading it personally
I.B.3 Lean enterprise vision New mental model of the enterprise
I.B.4 A sense of urgency The primary driving force for Lean
Average
I.C. Focus on the I.C.1 Understanding current value stream How we now deliver value to customers
Value Stream I.C.2 Enterprise flow “Single piece flow” of materials and information
I.C.3 Designing future value stream Value stream to meet the enterprise vision
I.C.4 Performance measures Performance measures drive enterprise behavior
Average
I.D. Develop Lean I.D.1 Enterprise organizational orientation Organize to support value delivery
Structure and I.D.2 Relationships based on mutual trust “Win-win” vs. “we-they”
Behavior
I.D.3 Open and timely communications Information exchanged when required
I.D.4 Employee empowerment Decision-making at lowest possible level
I.D.5 Incentive alignment Reward the behavior you want
I.D.6 Innovation encouragement From risk aversion to risk rewarding
I.D.7 Lean change agents The inspiration and drivers of change
Average
Page 148 of 166 SECTION I - LESAT SUMMARY SHEET
LESAT SECTION I SUMMARY SHEET - Continued
Section I - Lean Transformation/Leadership Continued… Process Description: Develop and deploy lean implementation plans
throughout the enterprise leading to (1) long-term sustainability, (2) acquiring competitive advantage and (3) satisfaction of stakeholders.
CAPABILITY LEVEL
I.E. Create & Refine I.E.1 Enterprise-level Lean transformation plan Charting the course across the extended enterprise
Transformation I.E.2 Commit resources for Lean Resource provision for lean
Plan improvements
I.E.3 Provide education and training Just-in-time learning
Average
I.F. Implement Lean I.F.1 Development of detailed plans Coordinating lean improvements
Initiatives based on enterprise plan
I.F.2 Tracking detailed implementation Assessing actual outcomes against goals
Average
I.G. Focus on I.G.1 Structured continuous Uniformity in how we get better

Continuous improvement processes
Improvement I.G.2 Monitoring lean progress Assessing progress toward achieving enterprise
objectives
I.G.3 Nurturing the process Assure executive level involvement
I.G.4 Capturing lessons learned Ensuring that successes lead to more successes
I.G.5 Impacting enterprise strategic planning Results lead to strategic opportunities
Average
Page 149 of 166 SECTION I - LESAT SUMMARY SHEET
SUMMARY SHEET - LESAT SECTION II
Section II - Life-Cycle Processes Definition: Implement Lean practices across life-cycle processes for defining customer requirements,
designing products and processes, managing supply chains, producing the product, distributing product and services and providing post
delivery support.
CAPABILITY LEVEL
II.A. Business II.A.1 Leverage Lean capability for Exploiting new business opportunities arising from
business growth lean enabled capabilities
Acquisition and
Program II.A.2 Optimize the capability and Lean enables business growth through the redeployment
utilization of assets of assets
Management
II.A.3 Provide capability to manage risk, Success follows effective risk management
cost, schedule and performance
II.A.4 Allocate resources for program Teaming for success
development efforts
Average
II.B. Requirements II.B.1 Establish a requirements definition Stakeholder pull vs. technology/product push
process to optimize lifecycle value
Definition
II.B.2 Utilize data from the extended enterprise to Closed loop processes are in place to capture operational
optimize future requirement definitions performance data
Average
II.C. Develop Product II.C.1 Incorporate customer value into design Understanding customer value allows continuous
of products and processes improvement of product and process
and Process
II.C.2 Incorporate downstream stakeholder Understanding downstream stakeholders allows value to
values into products and processes flow seamlessly to customer
II.C.3 - Integrate product and process development Breaking down of functional silos enables seamless
communication and value flow
Average
Page 150 of 166 SECTION II - LESAT SUMMARY SHEET
SUMMARY SHEET - LESAT SECTION II Continued…
Section II - Life-Cycle Processes Continued… Definition: Implement Lean practices across life-cycle processes for defining customer
requirements, designing products and processes, managing supply chains, producing the product, distributing product and services and pro-
viding post delivery support.
CAPABILITY LEVEL
II.D. Manage II.D.1 Define and develop supplier network Core competencies aligned across supplier network
Supply Chain II.D.2 Optimize network-wide performance Partnering with key suppliers and optimizing processes to
achieve customer value
II.D.3 Foster innovation and knowledge-sharing Incentivizing innovation & technology transfer
throughout the supplier network
Average
II.E. Produce II.E.1 Utilize production knowledge and Strategic leveraging of manufacturing capability
Product capabilities for competitive advantage
II.E.2 Establish and maintain a Lean Defect free production pulled by the customer
production system
Average
II.F. Distribute and II.F.1 Align sales and marketing to production Matching demand and capabilities
Service Product II.F.2 Distribute product in Lean fashion Right product, right quantity at the right time
II.F.3 Enhance value of delivered products Responding to the voice of the customer
and services to customers and the enterprise
II.F.4 Provide post delivery service, support Providing customer solutions
and sustainability
Average
Page 151 of 166 SECTION II - LESAT SUMMARY SHEET
SUMMARY SHEET - LESAT SECTION III
Section III - Enabling Infrastructure Definition: To achieve a successful lean transformation, the enterprise infrastructure must support
the implementation of Lean principles, practices and behavior.
CAPABILITY LEVEL
TTL LInk Lean Practice Lean Characteristic Current Desired
III.A.Lean III.A.1 Financial system supports Lean requires appropriate financial data
Organizational Lean transformation
Enablers III.A.2 Enterprise stakeholders pull required Data on demand
financial information
III.A.3 Promulgate the Learning Organization Learning organizations create a flexible workforce
III.A.4 Enable the Lean enterprise with Facilitate the flow of information and knowledge
information systems and tools
III.A.5 Integration of environmental protection, “Cleaner, healthier, safer”
health and safety into the business
Average
III.B.Lean Process III.B.1 Process standardization Strive for consistency and re-use
Enablers III.B.2 Common tools and systems Assuring compatibility, reducing costs
III.B.3 Variation reduction Reduce uncertainty by reducing variation
Average
Page 152 of 166 SECTION III - LESAT SUMMARY SHEET
E.3 - LESAT Calculator for Data Entry/Consolidation
The LESAT Calculator is a Microsoft Excel® workbook pre-programmed to perform statistical calculations, data
grouping, and graph generation to help enterprise leaders manage and use their LESAT data. The workbook con-
tains seven linked spreadsheets, as follows:
1. Data Entry Sheet

2. Calculator Sheet
3. Current State Summary
4. Desired State Summary
5. Gap Summary
6. Section X.X. Averages
7. Graphs
The Data Entry Sheet is a listing of all of the LESAT practices. The user simply enters the current and desired state
for each respondent (or group representative). The Figure below shows the layout of the Data Entry Sheet.
Section 1 - Lean Transformation Leadership

Respondent/Group Number
TTL Link Lean Practice
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
I.A.Enterprise Current 2 2 2 2 2 3 2 3 2 3 2 1 2 3 4 3 2 3 2 1
Strategic I.A.1 Integration of Lean in strategic planning process
Desired 5 5 5 5 5 4 4 4 4 4 4 5 4 4 4 5 5 5 5 5
Planning
Current 2 1 1 1 1 2 2 2 2 2 2 2 1 1 1 2 2 2 1 2
I.A.2 Focus on customer value
Desired 5 5 5 4 5 5 5 4 5 5 5 5 5 5 5 4 4 4 4 4
Current 2 3 3 3 4 3 3 3 2 3 2 3 2 2 2 3 3 3 3 3
I.A.3 Leveraging the extended enterprise
Desired 5 5 5 4 4 4 5 5 5 5 5 4 4 4 5 5 5 5 5 5
I.B. Adopt I.B.1 Learning and education in “Lean” Current 2 2 2 2 2 2 2 1 1 1 1 1 1 2 1 2 1 2 3 2

Lean for enterprise leaders Desired 4 4 5 4 4 4 4 5 4 4 4 5 4 4 4 4 4 4 4 4
Paradigm
Current 2 2 2 1 1 1 2 2 2 2 2 2 3 2 2 2 1 2 2 2
I.B.2 Senior management commitment
Desired 4 4 5 4 4 4 5 5 5 5 4 4 4 5 4 4 4 4 4 4
Current 2 1 1 1 2 2 2 1 2 2 2 4 3 3 3 2 2 3 2 3
I.B.3 Lean enterprise vision
Desired 4 4 5 4 4 4 5 4 4 4 4 5 5 5 5 5 5 5 5 5
I.B.4 A sense of urgency Current 2 1 1 1 1 1 1 1 2 2 2 1 1 1 2 2 2 2 3 2

Desired 4 4 4 4 4 4 5 5 5 5 5 5 4 4 4 5 4 4 4 4
The Calculator Sheet is dynamically linked to the Data Entry Sheet and is the main computational spreadsheet in the
workbook. The data is used to generate values for the LESAT gaps and to create tallies of the scores for each LESAT
practice. The tallies are useful for visualizing the spread in the responses and allow for identifying multi-modal dis-
tributions in the results. This spreadsheet should not be used for data entry, as it will destroy the formulas that have
been imbedded in the file. The Calculator Sheet presents overall data for each of the LESAT practices as shown in
the figure below:
© Copyright Massachusetts Institute of Technology, 2001s Page 153 of 166

State Mean Variance Range Level 1 Level 2 Level 3 Level 4 Level5

I.A.Enterprise I.A.1 Integration of Lean in Current 2.3 0.5 3 2 11 6 1 0

Strategic
strategic planning process Desired 4.6 0.3 1 0 0 0 9 11
Planning
Gap 2.3 1.1 4 4 6 7 2 0
I.A.2 Focus on customer value Current 1.6 0.3 1 8 12 0 0 0
Desired 4.7 0.2 1 0 0 0 7 13
Gap 3.1 0.6 2 0 5 9 6 0
I.A.3 Leveraging the extended enterprise Current 2.8 0.3 2 8 11 1 0 0

Desired 4.7 0.2 1 0 0 0 6 14
Gap 2.0 0.6 3 3 12 4 0 0
I.B. Adopt I.B.1 Learning and education in “Lean” Current 1.7 0.3 2 8 11 1 0 0
Lean for enterprise leaders Desired 4.2 0.1 1 0 0 0 17 3
Paradigm
Gap 2.5 0.6 3 1 10 7 2 0
I.B.2 Senior management commitment Current 1.9 0.2 2 4 15 1 0 0

Desired 4.3 0.2 1 0 0 0 14 6
Gap 2.5 0.4 2 1 9 10 0 0
I.B.3 Lean enterprise vision Current 2.2 0.7 3 4 10 5 1 0

Desired 4.6 0.3 1 0 0 0 9 11
Gap 2.4 0.5 3 1 11 7 1 0
I.B.4 A sense of urgency Current 1.6 0.4 2 10 9 1 0 0
Desired 4.4 0.2 1 0 0 0 13 7
Gap 2.8 0.6 3 1 5 11 3 0
The next three spreadsheets in the workbook essentially represent the same data that exists in the Spreadsheet
Calculator, but are grouped by their state. Thus the Current State Summary would contain all of the data on the
current state results as shown in the figure below:
State Mean Variance Range Level 1 Level 2 Level 3 Level 4 Level 5

I.A.Enterprise I.A.1 Integration of Lean in strategic planning process Current 2.3 0.5 3 2 11 6 1 0
Strategic I.A.2 Focus on customer value Current 1.6 0.3 1 8 12 0 0 0
Planning
I.A.3 Leveraging the extended enterprise Current 2.8 0.3 2 8 11 1 0 0
I.B.1 Learning and education in “Lean” Current 1.7 0.3 2 8 11 1 0 0

I.B. Adopt
Lean for enterprise leaders
Paradigm I.B.2 Senior management commitment Current 1.9 0.2 2 4 15 1 0 0
I.B.3 Lean enterprise vision Current 2.2 0.7 3 4 10 5 1 0
I.B.4 A sense of urgency Current 1.6 0.4 2 10 9 1 0 0
The Desired State Sheet and Gap Summary look the same as this figure except they say “Desired” and “Gap” in
the “State” column respectively. At the top of each of these spreadsheets there is also a summary block that calcu-
lates the overall section statistics as shown in the figure on the following page:

Current State - Overall LESAT Score
Mean Variance Range
Current 2.0 0.3 1.9
Section I - Lean Section II - Life Cycle Processes Section III - Enabling Infrastructure
Mean Variance Range Mean Variance Range Mean Variance Range
Current 2.1 0.4 2.0 Current 1.9 0.4 1.9 Current 1.5 0.3 1.3
The Section X.X. Averages spreadsheet takes all of the data and averages the results at the LESAT X.X level. Thus
for Section I.A - Enterprise Strategic Planning, the number generated will be the average of I.A.1, I.A.2, and I.A.3.
This spreadsheet presents the current state, desired state, and gap, along with the variances on these values, as
shown in the figure below:

Section X.X Averages Section X.X Average Variances
TTL LINK Current Desired Gap Current Desired Gap
I.A. Enterprise Strategic Planning 2.2 4.6 2.4 2.2 4.6 2.4
I.B. Adopt Lean Paradigm 1.8 4.3 2.5 1.8 4.3 2.5
I.C. Focus on the Value Stream 2.1 4.5 2.4 2.1 4.5 2.4
I.D. Develop Lean Structure and Behavior 2.0 4.5 2.5 2.0 4.5 2.5
I.E. Create and Refine Implementation Plan 2.5 4.4 1.9 2.5 4.4 1.9
I.F. Implement Lean Initiatives 2.8 4.6 1.8 2.8 4.6 1.8
I.G. Focus on Continuous Improvement 2.2 4.5 2.3 2.2 4.5 2.3

The final spreadsheet in the LESAT Calculator for Data Entry/Consolidation generates two graphs for use in review-
ing the results of the assessment. The first bar graph shows the value for the current state, desired state, and gap
0
I.A I.B I.C I.D I.E I.F I.G II.A II.B II.C II.D II.E II.F III.A III.B
for each of the LESAT practices. The graphs are cumulative, thus the lower bar (in black) represents the current state,
the upper bar (lighter) represents the gap and the sum of the two (value of the top of the gap bar) represents the
desired state. The second graph is in the same format, but represents the data at the X.X-level. Data was entered
into a sample spreadsheet to develop a sample graph, as shown in the figure below:
The user of the spreadsheet may wish to sort the data in ascending order to get a better view of the lowest ranking
LESAT sections and practices as was done with the data in the graph above to create the following figure:
0
III.B III.A II.A I.B II.C I.D II.B II.F I.C I.G II.E I.A II.D I.E I.F

E.4 - Site Visit Alternatives for Analyzing and Displaying Data
The Alpha and Beta testing of the LESAT tool provided insight into the many ways results were analyzed and report-
ed by the participating companies. The following pages provide an overview of some of these reporting options.
There are pros and cons associated with each individual method, but they do provide useful examples of how your
enterprise may choose to review its LESAT results.

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in ev g ica M D Le
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Lean Element
I Lean Transformation/Leadership
I.A Enterprise Strategic Planning 1.7 2.0 2.0 2.0 2.0 2.3 1.7 1.0 1.3 2.0 2.0 1.8 4.2 2.4
I.A.1 Integration of Lean in strategic planning process 2 2 3 2 2 2 2 1 1 2 2 4.0
I.A.2 Focus on customer value 2 2 2 2 2 3 2 1 2 2 2 4.0
I.A.3 Leveraging the extended enterprise 1 2 1 2 2 2 1 1 1 2 2 4.5
I.B Adopt Lean Paradigm 1.8 2.0 2.3 2.3 2.8 2.5 2.8 2.5 2.3 2.0 2.0 2.3 4.5 2.2
I.B.1 Learning and education in “Lean” for enterprise leaders 2 2 2 2 3 3 2 1 2 2 2 4.5
I.B.2 Senior management commitment 3 2 3 3 3 2 3 3 2 2 2 4.7
I.B.3 Lean enterprise vision 1 2 2 2 3 3 3 4 2 2 2 4.4
I.B.4 A sense of urgency 1 2 2 2 2 2 3 2 3 2 2 4.5
I.C Focus on the Value Stream 2.3 2.3 2.3 2.0 2.3 2.3 2.0 2.8 2.5 1.8 1.8 2.2 4.5 2.3
I.C.1 Understanding current value stream 2 2 3 2 3 3 1 3 3 3 3 4.4
I.C.2 Enterprise flow 3 3 2 2 2 2 2 3 2 2 2 4.4
I.C.3 Designing future value stream 2 2 2 2 2 3 3 3 3 1 1 4.4
I.C.4 Performance measures 2 2 2 2 2 1 2 2 2 1 1 4.7
I.D Develop Lean Structure and Behavior 2.1 2.4 2.1 2.4 2.1 2.7 2.0 2.0 2.1 2.1 2.1 2.2 4.4 2.1
I.D.1 Enterprise organizational orientation 3 3 2 3 3 2 3 3 3 3 3 4.5
I.D.2 Relationships based on mutual trust 3 3 3 2 2 2 1 2 1 2 2 4.4
I.D.3 Open and timely communications 1 1 1 2 1 2 2 2 2 2 2 4.5
I.D.4 Employee empowerment 2 2 2 3 3 3 3 1 2 2 2 4.5
I.D.5 Incentive alignment 2 2 2 2 1 3 1 3 2 2 2 4.2
I.D.6 Innovation encouragement 2 4 3 3 3 4 2 1 2 2 2 4.3
I.D.7 Lean change agents 2 2 2 2 2 3 2 2 3 2 2 4.0
I.E Create and Refine Transformation Plan 2.3 2.7 2.7 1.7 1.7 2.0 2.3 2.3 2.3 2.3 2.3 2.2 4.3 2.1
I.E.1 Enterprise-level Lean transformation plan 2 2 2 1 1 2 3 2 3 2 3 4.3
I.E.2 Commit resources for Lean improvements 2 2 3 2 2 2 2 2 1 2 2 4.2
I.E.3 Provide education and training 3 4 3 2 2 2 2 3 3 3 2 4.4
I.F Implement Lean Initiatives 2.5 2.0 1.5 2.0 2.5 2.5 2.0 1.5 2.0 2.0 2.0 2.1 4.1 2.0
I.F.1 Development of detailed plans based on enterprise plan 4 3 2 2 3 3 2 2 3 3 3 4.0
I.F.2 Tracking detailed implementation 1 1 1 2 2 2 2 1 1 1 1 4.3
I.G Focus on Continuous Improvement 1.8 1.8 1.6 1.6 1.8 1.8 1.6 1.4 2.0 1.8 1.4 1.7 4.5 2.6
I.G.1 Structured continuous improvement processes 2 1 2 2 2 2 1 1 1 1 1 4.5
I.G.2 Monitoring lean progress 2 2 1 1 2 2 1 1 2 2 1 4.5
I.G.3 Nurturing the process 1 2 1 1 1 1 2 2 2 2 2 4.5
I.G.4 Capturing lessons learned 1 1 1 1 1 1 2 1 2 2 2 4.5
I.G.5 Impacting enterprise strategic planning 3 3 3 3 3 3 2 2 3 2 1 4.5

Lean Lean
Aerospace Company A - LESAT Report Out Aerospace Company A - LESAT Report Out
Initiative Initiative
I.A. Enterprise Strategic Planning I.B. Adopt Lean Paradigm

• Overall Site Score 1.8 out of 5 • Overall Site Score 2.3 out of 5
• Desired Level 4.2 • Desired Level 4.5
• Gap 2.4 • Gap 2.2
• Definition of 2 - Lean is recognized but relegated to lower • Definition of 2 - Actively seeking opportunities to learn about
levels and is fragmented. Structured process for defining lean, initial grasp. Senior managers but into group
value is applied to selected areas. commitment with common vision of lean and have
developed and urgent case for lean transformation
• Definition of 5 - Strategic plans leverage the results of Lean
implementation to achieve growth, profitability and market • Definition of 5 - Senior leader advance knowledge of lean,
position. Customer value predominant driving force mentoring lean champions internally and through
throughout enterprise the extended enterprise
Lean Lean
Aerospace Company A - LESAT Report Out Aerospace
Company A - LESAT Report Out
I.C. Focus on the Value Stream I.D. Develop Lean Structure and Behavior
• Gap 2.3 • Gap 2.1
• Definition of 2 - Key stakeholders and what they value have been • Definition of 2 - Initial efforts underway to identify functional
identified. Key internal value streams have been revised to overcome the
barriers, understand implications, fostering innovations,
main constraints for information and product flow. Baseline performance
measures established to reflect progress toward lean vision and visible
identification of change agents. Breaking down
throughout the enterprise organizational barriers and developing mutual trust
• Definition of 5 - Value streams (present and future) are • Definition of 5 - Process based organizational structure
continually monitored and updated with agreements on aligned across the extended enterprise. Decision making is
performance measures and goals across the extended delegated to the point of application. Lean incentives
enterprise. deployed across the extended enterprise

Lean Lean
I.E. Create and Refine Transformation Plan I.F. Implement Lean Initiatives
• Gap 2.1 • Gap 2.0
• Definition of 2 - Enterprise level view identifies Lean • Definition of 2 - Key goals of the enterprise Lean
transformation projects to meet strategic objectives. implementation projects are understood by a majority of
Some enterprise level resources committed but often applied employees. Progress of detailed lean implementation
to symptom rather than root cause. projects are tracked within operational units
• Definition of 5 - Lean transformation plan balances mutual • Definition of 5 - Lean transformation plans and interrelated
benefits of stakeholders, pool of resources provided for lean implementation projects are coordinated with and support
initiatives, education and training supports the needs across the lean transformation plan and are throughout the
the extended enterprise extended enterprise
Lean
Aerospace Company A - LESAT Report Out Lean
Initiative
Aerospace Company A - LESAT Report Out
Initiative

• Overall Site Score 1.7 out of 5
• Overall Site Score 1.9 out of 5
• Desired Level 4.5
• Desired Level 4.5
• Gap 2.8
• Gap 2.6
• Definition of 2 - Some senior managers are providing
encouragement support and recognition on Lean but is not • Definition of 2 - Understanding the core competencies but
consistent across enterprise. Lessons learned documented in business pursuits are uncoupled form enterprise planning.
some areas. Benefits of lean are beginning to influence Management system to monitor and control performance
strategic planning and staffing
• Definition of 5 - Senior manager monitor Lean progress • Definition of 5 - Virtual organizations are created from the
throughout extended enterprise. They champion and nurture extended enterprise resources to execute the development
a culture of Lean. Forecast future results of lean in efforts. Ability to easily shift resources to new opportunities
assessment of new business opportunities

Lean Lean
II.B. Requirements Definition II.C. Develop Product and Process

• Gap 2.4 • Gap 2.5
• Definition of 2 - Requirements definition process which • Definition of 2 - Customer inputs considered qualitatively
balances cost, schedule, and performance is partially through top-level liaison and occasional reviews.
developed deployed and documented Multidisciplinary development is used to a limited extent.
• Definition of 5 - The requirement process is a strategic • Definition of 5 - Customer is routinely involved with IPT with
advantage for the extended enterprise contributing to effective continuous communication. Product and process
increased responsiveness and new business opportunities. definition is seamlessly integrated both internally and with
Process established to actively seed data on needs. usage, the upstream and downstream stakeholders.
and process capability across the marketplace.
Lean Lean
II.D. Supply Chain Management II.E. Produce Product

• Gap 1.4 • Gap 2.2
• Definition of 2 - The supply base has been rationalized to focus • Definition of 2 - Production System Operates with a batch and
suppliers who have high impact on strategic objectives. queue schedule with limited cellular or inline layouts to
Long term purchase agreements are introduced focusing on improve flow.
affordability and cost reduction
• Definition of 5 - Work segmented and organized along the
• Definition of 5 - Integrated supplier value stream is optimized value stream flow to achieve defect free production upon
to create and deliver best value to the customer over the demand through the implementation of pull from customer
entire product life cycle and maintain long-term sustainable through material suppliers.
competitive advantage.

Lean Lean
II.F. Distribute and Service Product III. Enabling Infrastructure

• Gap 3.0 • Gap 2.8
• Definition of 2 - Distribute in smaller batch sizes in line with • Definition of 2 - Identified high leverage opportunities for
increased reliability. Programs in place to reduce customer common tools and systems with initial deployment in a few
receipt inspection. Collection of data on failure trends for areas. Personal management process is in early stage of
preventative maintenance and reduction of spare part levels. development. Maintenance of legacy systems consume
most of IT resources. Sources of variation are being
• Definition of 5 - Defect free distribution on demand by
identified and analyzed with initial efforts underway
implementation of customer pull from end customer through
material suppliers. • Definition of 5 - Stakeholders across the extended enterprise
generate and share timely financial and performance data.
Information is easily accessible/usable.

Lean Assessment Summary Average Average
Present Desired
Level Level
Section I - Lean Transformation/ Leadership
I.A.Enterprise Strategic Planning
2.3 4.6
I.A.1 Integration of Lean in strategic planning process
2.2 4.6
I.A.2 Focus on customer value
2.4 4.5
I.A.3. Leverage the Extended Enterprise
Average Level 2.3 4.6
Gap 2.3
Suggested Actions:
2.2 4.7
I.B. Adopt Lean Paradigm 2.1 4.6
I.B.1 Learning and education in “Lean” for enterprise leaders 1.9 4.4
I.B.2 Senior management commitment 2.1 4.6
I.B.3 Lean enterprise vision
Average Level 2.1 4.6
I.B.4 A sense of urgency
Gap 2.5
Suggested Actions:

SECTION I - Lean Transformation/Leadership Team Team Current Desired
Avg Avg L-H L-H
Current Desired Gap
Level Level
I A Enterprise Strategic Planning 1 I.A.1 Integration of Lean in strategic planning process 2.0 4.5 2.3 1-3 3-5
2 I.A.2 Focus on customer value 2.1 4.6 2.4 1-4 3-5
3 I.A.3 Leveraging the extended enterprise 2.1 4.6 2.3 1-3 3-5
Average Level 2.1 4.6 2.3
B Adopt Lean Paradigm 1 I.B.1 Learning and education in “Lean” for enterprise leaders 1.9 4.5 2.4 1-3 3-5
2 I.B.2 Senior management commitment 2.1 4.5 2.6 1-4 4-5
3 I.B.3 Lean enterprise vision 1.8 4.5 2.7 1-2 3-5
4 I.B.4 A sense of urgency 2.2 4.5 2.4 1-3 3-5
C Focus on the Value Stream 1 I.C.1 Understanding current value stream 1.9 5.0 2.7 1-3 3-5
2 I.C.2 Enterprise flow 2.0 5.0 2.4 1-3 3-5
3 I.C.3 Designing future value stream 2.2 4.5 2.4 1-3 4-5
4 I.C.4 Performance measures 2.1 5.0 2.7 1-3 3-5
D Develop Lean Structure 1 I.D.1 Enterprise organizational orientation 2.2 4.5 2.2 1-3 4-5
and Behavior 2 I.D.2 Relationships based on mutual trust 2.0 4.4 2.4 1-3 4-5
3 I.D.3 Open and timely communications 2.1 4.5 2.4 1-5 4-5
4 I.D.4 Employee empowerment 2.1 4.5 2.5 1-3 4-5
5 I.D.5 Incentive alignment 1.9 4.5 2.7 1-2 3-5
6 I.D.6 Innovation encouragement 2.0 4.5 2.5 1-3 3-5
7 I.D.7 Lean change agents 1.9 4.5 2.4 1-3 4-5
E Create and Refine 1 I.E.1 Enterprise-level Lean transformation plan 1.8 4.5 2.4 1-3 3-5
Transformation Plan 2 I.E.2 Commit resources for Lean improvements 2.0 4.4 1.9 1-3 3-5
3 I.E.3 Provide education and training 2.0 4.5 2.4 1-3 3-5
F Implement Lean Initiatives 1 I.F.1 Development of detailed plans based on enterprise plan 2.1 4.5 2.9 1-4 4-5
2 I.F.2 Tracking detailed implementation 2.2 4.5 2.0 1-3 3-5
G Focus on Continuous 1 I.G.1 Structured continuous improvement processes 2.3 4.5 2.2 1-3 4-5
Improvement 2 I.G.2 Monitoring lean progress 2.0 4.4 2.1 1-4 4-5
3 I.G.3 Nurturing the process 2.0 4.4 2.2 1-2 3-5
4 I.G.4 Capturing lessons learned 2.0 4.6 2.4 1-2 3-5
5 I.G.5 Impacting enterprise strategic planning 2.1 4.6 2.6 1-3 3-5

LESAT - Pareto Analysis of the Present State
Sub-category Lean Practice
Average Present Level
I.B. Adopt Lean Paradigm I.B.4. A Sense of Urgency

1.5
I.E. Create and Refine Transformation Plan I.E.1. Enterprise Level Lean Transformation Plan
1.5
Section III: Enabling Infrastructure III.F. Enterprise Flow
1.6
I.C. Focus on the Value Stream I.C.1. Current Value Stream
1.6
II.A. Business Acquisition and Program Management II.A.1. Leverage Lean Capability for Business Growth
1.9
II.A. Business Acquisition and Program Management II.A.2. Optimize the Capability and Utilization of Assets
1.9
II.B. Requirements Definition II.B.2 Utilize the Data from the Extended Enterprise
2.0
II.D. Supply Chain Management II.D.1. Develop/ Manage Supplier Network
2.0
II.F. Distribute and Service Product II.F.4. Provide Post Delivery Service, Support, and Sustainability
2.1
Section III: Enabling Infrastructure III.G. Enable the Lean Enterprise with IT Tools and Systems
2.1
I.C. Focus on the Value Stream I.C.2. Future Value Stream
2.1
II.F. Distribute and Service Product II.F.3. Enhance Value of Delivered products and Services to Customers and the Enterprise
2.1
I.F. Implement Lean Initiatives I.F.1. Development of Detailed Plans Based on Enterprise Plan
2.1
II.F. Distribute and Service Product II.F.2. Distribute Product in Lean Fashion
2.1
I.E. Create and Refine Transformation Plan I.E.3. Provide Education and Training
2.1
Section III: Enabling Infrastructure III.C. Enterprise Stakeholders Pull Required Financial Measures
2.1
I.A. Enterprise Strategic Planning I.A.2. Focus on Customer Value
2.2
I.D. Develop Lean Structure and Behavior I.D.6. Innovation Encouragement
2.4
I.F. Implement Lean Initiatives I.F.2. Tracking Implementation
2.4
I.G. Focus on Continuous Improvement I.G.5. Feedback to Enterprise Strategic Planning
2.4
I.B. Adopt Lean Paradigm I.B.3. Lean Enterprise Vision
2.4
LESAT - Pareto Analysis of the Gap (Desired Level - Current Level)

Sub-category Lean Practice
Average Present Level
I.B. Adopt Lean Paradigm I.B.4. A Sense of Urgency
I.D. Develop Lean Structure and Behavior I.D.4. Employee Empowerment 3.5
II.D. Supply Chain Management II.D.1. Develop/Manage Supplier Network 3.3
Section III: Enabling Infrastructure III.F. Enterprise Flow 3.2
I.A. Enterprise Strategic Planning I.A.3. Leveraging the Extended Enterprise 3.0
I.D. Develop Lean Structure and Behavior I.D.3. Open and Timely Communications 3.0
I.E. Create and Refine Transformation Plan I.E.3. Provide Education and Training 3.0
I.G. Focus on Continuous Improvement I.G.5. Feedback to Enterprise Strategic Planning 2.9
I.F. Implement Lean Initiatives I.F.1. Development of Detailed Plans Based on Enterprise Plan 2.8
I.C. Focus on the Value Stream I.C.1. Current Value Stream 2.8
I.E. Create and Refine Transformation Plan I.E.1. Enterprise Level Lean Transformation Plan 2.6
II.A. Business Acquisition and Program Management II.A.2. Optimize the Capability and Utilization of Assets 2.6
I.A. Enterprise Strategic Planning I.A.2. Focus on Customer Value 2.6
I.C. Focus on the Value Stream I.C.2. Future Value Stream 2.6
I.C. Focus on the Value Stream I.C.3. Performance Measures 2.5
Section III: Enabling Infrastructure III.C. Enterprise Stakeholders Pull Required Financial Measures 2.5
II.F. Distribute and Service Product II.F.4. Provide Post Delivery Service, Support, and Sustainability 2.5
II.F. Distribute and Service Product II.F.2. Distribute Product in Lean Fashion 2.5
II.F. Distribute and Service Product II.F.3. Enhance Value of Delivered products and Services to Customers and the Enterprise 2.5
I.B. Adopt Lean Paradigm I.B.3. Lean Enterprise Vision 2.5
2.5
Identify, prioritize and sequence a comprehensive set of lean initiatives that collectively constitute the plan for achieving the desired transformation.
• Is the enterprise level lean transformation plan prioritized and aligned with strategic business objectives?
• Have adequate resources been provided to facilitate lean transformation?
• Does the current education and training program adequately support the strategic direction(s) and lean transformation?
• Have lessons learned and best practice been effectively incorporated within lean transformation planning?
TALLY
MEAN
I.E.1. Enterprise-Level Level 1 Level 2 Level 3 Level 4 Level 5

Lean Individual planning efforts Enterprise-level view Enterprise improvement Lean transformation plan is Lean transformation plan
Transformation are mostly bottom up initia- identifies lean implementa- plans are coordinated and continuously refined through balances mutual benefits
tives with little priority or tion projects, which are pri- prioritized across enterprise learning from implementa- of stakeholders across the
Plan
1.6 coordination established oritized to meet long and value stream(s), with a tion results and changing extended enterprise.
Charting the course
at enterprise level. short-term strategic timeline for expected strategic requirements.
4 3 1
across the extended objectives. measurable results.
enterprise
❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D ❑C ❑D
Lean Indicators • A process is in place to incorporate lessons learned into the enterprise-level lean transformation plan.
(Examples) • The milestone targets of the lean transformation plan are broken-down by section and deployed across the enterprise.
• Plans balance long-term and short-term stakeholder objectives for the best overall solution.
Evidence
Opportunities

Lean Aerospace Initiative
Massachusetts Institute of Technology
77 Massachusetts Avenue
Room 41-205
Cambridge, MA 02139
web.mit.edu/lean

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LEAN

Part II – Lean Enterprise Architecture..................................................................11

Part III - Development of Lean Maturity Matrices .................................................14

Part IV – Assessment Methodology ....................................................................22

Part V - LESAT Maturity Matrices .......................................................................32

Appendix A – The “What and Why” of Lean .....................................................86

Appendix B – LESAT Glossary ...........................................................................104

Appendix C – TTL Tutorial .................................................................................108

Appendix D – Comparison of LESAT to Other Assessment Approaches ................125

Appendix E – LESAT Assessment Aids ................................................................136

© Copyright Massachusetts Institute of Technology, 2001

Figure 1. LAI Enterprise Tool Triad

Page 2 of 166 © Copyright Massachusetts Institute of Technology, 2001

© Copyright Massachusetts Institute of Technology, 2001 Page 3 of 166

LESAT Maturity Matrices

Page 4 of 166 © Copyright Massachusetts Institute of Technology, 2001

© Copyright Massachusetts Institute of Technology, 2001 Page 5 of 166

Page 6 of 166 © Copyright Massachusetts Institute of Technology, 2001

© Copyright Massachusetts Institute of Technology, 2001 Page 7 of 166

In Appendix D, LESAT is compared to these three models.

Selection of the LESAT Approach

Page 8 of 166 © Copyright Massachusetts Institute of Technology, 2001

Level 2 - Senior leaders adopt common vision of Lean

Level 4 - Common vision of Lean shared by the extended enterprise

Development and Testing of LESAT

© Copyright Massachusetts Institute of Technology, 2001 Page 9 of 166

Page 10 of 166 © Copyright Massachusetts Institute of Technology, 2001

Enterprise Leadership Processes:

Life Cycle Processes:

Enabling Infrastructure Processes:

© Copyright Massachusetts Institute of Technology, 2001 Page 11 of 166

Figure 2 - Generic Lean Enterprise Process Architecture

Life Cycle Processes

• Business Acquisition and Program Management

Enabling Infrastructure Processes

Enterprise Leadership Process

Page 12 of 166 © Copyright Massachusetts Institute of Technology, 2001

© Copyright Massachusetts Institute of Technology, 2001 Page 13 of 166

Generic Capability Level Definitions

Figure 3. Generic Level Definitions

Level 1 Some awareness of this practice; sporadic improvement activities may be

Level 2 General awareness; informal approach deployed in a few areas with

Level 3 A systematic approach/methodology deployed in varying stages across most

Level 4 On-going refinement and continuous improvement across the enterprise;

Level 5 Exceptional, well-defined, innovative approach is fully deployed across the

Page 14 of 166 © Copyright Massachusetts Institute of Technology, 2001

© Copyright Massachusetts Institute of Technology, 2001 Page 15 of 166

Section, Group # and Group Name:

LP# LEAN PRACTICES CAPABILITY LEVELS

A specific lean Level 1 Level 2 Level 3 Level 4 Level 5

Sound bite phrase

II.A. Business Acquisition and Program Management

LP# LEAN PRACTICES CAPABILITY LEVELS

II.A.1 Leverage Lean Level 1 Level 2 Level 3 Level 4 Level 5

Figure 6 - LESAT Architecture

Section II Section III

Life Cycle Processes

Figure 7. Organization of LESAT Maturity Matrices

Section I - Lean Transformation/Leadership

Section II - Life-Cycle Processes