Lean Manufacturing

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Phase IV: Reflection
LIKE MODERN SOCIETY IN GENERAL, TRADITIONAL strategic planning rarely stops to reflect upon
results, even if they are measured in a developmental framework such as the Nine Keys. In
addition to an appropriate framework, proper reflection requires a Delta Zero mindset, a
willingness to rethink the results desired as well as the factors required to achieve them.
Throughout the previous phases of the strategic improvement cycle, the attitude of Delta Zero
pervaded planning, policy deployment, and improvement activities in daily work. At the end of the
cycle, the company's top leadership returns to Zero again, reviewing the overall results, problems,
and surprises, and informing itself for building next year's policy.
In companies that have progressed one year or more beyond the Business Renewal Process, the
focus team formally reviews the company's performance figures from the previous year to
discover any gaps between actual performance and stated targets. The focus team also reviews
assumptions made in its business renewal strategy-such as the importance of a product line to a
particular customer-to see how they hold up against actual conditions and emerging trends. The
outcome of this analysis is a list of assumption gaps and barriers to the company's continued
progress towards its vision. Finally, the focus teams offers an evaluation of the prior year's policy,
with suggestions for themes and keys to address in the coming strateegic improvement cycle.
STEP 1. COLLECT INFORMATION
To reflect on policy implementation, the focus team collects information, developed during the
previous Business Renewal Process or through regular business reporting during the year:
company's Product/Market Matrix, Key Factor Matrix, and other strategic planning tools
The team also gathers documents generated during the Adherence phase:
ummary for the prior
deployment teams, as well as the focus team's notes from the latest Corporate Diagnosis
STEP 2. IDENTIFY CRITICAL PERFORMANCE GAPS
Next the focus team should identify the gaps between last year's improvement targets and the
company's actual performance, as evidenced on the company's Plan Summary for the current
improvement cycle. For example, Figure 7-8 (p. 134) showed Nonesuch Casting's Completed Plan
Summary. This chart indicates that Nonesuch reached its annual policy targets in the leadership
key, and in some (but not all) of the control points for the lean equipment management key. In
addition, the Lean Equipment Management Initiative deployment team's Analysis Sheet suggested
the following gaps in anticipated performance:
STEP 3. IOENTIFY EMERGENT GAPS ANO BARRIERS
In this step, the focus team questions the assumptions that support the company's business
renewal strategy. The team begins by reviewing its market position using traditional strategic

planning tools such as updated Product/Market Matrixes and Key Factor Matrixes (introduced in
Chapter 4; see pp. 52--55).
After reviewing the strategic market information, the team brainstorms a list of emerging factors
in the market that could keep the company from achieving top competitiveness. The team then
uses the affinity diagram technique to group like factors together. If necessary, the team further
subdivides these problems into smaller groups sharing common characteristics.
STEP 4. ANALYZE GAPS AND BARRIERS
The next step of analysis uses a chart similar to the Target/Means Diagram introduced previously.
First, the management team combines the lists of performance gaps and emergent barriers to its
strategy, and analyzes the causes of each gap or barrier. The team sets up a cause- and-effect
diagram for each gap or barrier, writing it on the effect side of the diagram. It then drafts a gap
statement, suggests a target, and creates a performance graph showing industry, world class, and
target levels.
STEP 5. SUMMARIZE
After the focus team has identified and analyzed critical performance and environmental gaps, it
fills in an Analysis Summary. Keyed to the Completed Plan Summary, this document records the
focus team's evaluation notes and recommendations for the focus of next year's annual policy (see
Figure 8-3).
This evaluation lays the groundwork for the focus team to begin a new round of the Strategic
Improvement Cycle. In many cases, the focus tea m can develop the theme for the new policy
cycle directly from the recommendations in the Analysis Summary, without having to analyze and
rank profit factors as it did in the first round (see Chapter S). Top management will find that it is
much more aware of the daily operation of the company than it was before the improvement
cycle, and will understand better what it must do to continue its progress toward excellence in its
strategic keys.

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