Medtronic's Lean Journey

#lean12 Among the best presentations I have ever heard about Lean process improvement occurred this morning at the LEI Lean Transformation Summit in Jacksonville.  It was offered by Greg Johnson, senior director of process solutions at Medtronic.  Medtronic is a 45,000 person, $16-billion global leader -- 43% of sales outside of the US -- in medical technology.  It operates at a scale that is hard to fathom: Every 4 seconds somewhere in the world, someone is getting care using a Medtronic product.

Lean evolved at Medtronic from the grass roots.  Initial experimentation started in 2003 with Lean Sigma -- an optional improvement effort with specific project orientation. The ideas was to "get a good tool box out there for people to use," Greg said. "I label this phase 'curiosity.' It was not systemic. There was uneven implementation. Some lost interest. Others persisted."

Over time, interest at the corporate level grew as leaders saw some competitive impact. There was more systemic improvement, mainly applied to big projects. Still, however, the effort was a grass roots one and local in nature.

The big change occurred when decision was made to build world class competency in problem solving. The leadership team realized that those at the grass roots level were right.  This was a tipping point for the company.  They decided to create an operating standard around the issue of continuous improvement. "Everyone every day," became the goal. The Shingo Prize framework became the standard for their operating process.  They knew they would have to think big, but then sweat the details.  Over time they figured out how to collaborate.

There were five stages in the process:

1 -- Define our operating standards, who we aspire to be.
2 -- Set a global expectation to accelerate improvement.
3 -- Develop the ability to assess current state.
4 -- Create ongoing mechanisms to learn and leverage to close gaps.
5 -- Continually check and adjust.

The most interesting moment to me was when the plant managers and quality improvement people (90 in all) from all of the company's facilities met to plan this approach.  This was the first such meeting ever!  It was at this meeting that plant mangers agreed to accelerate the rate of improvement by learning from each other.  This discarded previously long-held attitudes:  Plant managers now needed to be willing to give away their secrets of success.

Also, the company began a process to assessment the current state, based in great measure by on-site reviews by people from other facilities. These take place every 18 months, with teams of 6 to 8 visitors.  But these are not just assessments. Gap analyses take place, and helpful suggestions from elsewhere are offered. Also, the assessors bring back ideas to their own facilities.

Greg noted, "We don't stamp solutions across the company." Having a common language across the company, though, was key.  Broadly adopted operating systems are used to solve problems locally. These solutions are then shared across the company.

He summarized a powerful financial result.  The company has achieved a reduction in costs of good sold of $1 billion in the past 5 years.  One third of that resulted from Lean.   They plan to do it again  over the next 5 years, again expecting a third to result from Lean.  Greg said, ""We don't know how yet, but we have confidence."

He ended his talk by saying, "We are nowhere near where we want to be, but we are happy with our path."