The difference between conventional production and lean
This short story shows the difference between conventional management thinking and lean.
The CFO believes that the numbers he receives at the end of a period (usually a few weeks late), would serve to keep the operation running.
A Lean practitioner believes that there is no better place to run an operation as Gemba, the place where value is created..
The first phenomenon is also called "management by numbers". A acoounting system ist used which is recognized across the industry but doesn't necessery represent the special features of the specific operation. So the processes and structure of the company are pressed into a tight corset to fit the accounting system.
Results can be that costs constituting a major proportion of the company's total costs are distributed over all products (although the only apply to some products) because accounting calls them generelly costs.
Furthermore the numbers are usually taken from an IT system, they migrate through severell Excel sheets and are converted (partly distorted) until they end up at the final arbiters.
This process can take up to several days.
Making a decision based on those figures is about the same, as flying a jet fighter by using a satellite pictures.
Before you have the required data, the jet (and so the company) has allready moved on.
The perspective of Lean practitioners is that there's no better place to gather information for making a decision than gemba where the numbers, dates, facts are "born". Whether it is an assembly cell, a warehouse, an order processing or sales counter. You'll have to grasp the current situation and streamline processess based on the seven types of waste.
The advantage of this method is that you can take action on the spot and they are effective immediatly.
Trust your employees
Critics might complain that managers are not able to tear themselves apart to be everywhere at once.
I agree with that completely.
But who has said that the manager has to make the decision?
One of the key ideas is to get local staff as much decision-making authority as necessary / possible and to specify and define processes to escalate and set up an infrastructure that allows for quick decisions on the spot.
(The Lean practitioner already thinks about the Andon system)
How do I convince him?
Be aware though, you can't convince such a CFO only by talking about waste and gemba etc.
What you can do, is to take your bottleneck process and to hold a concentrated Kaizen event. Set high goals (50% reduction in cycle time) and report out on your successes.
If you're lucky, your board will be interested and wanting to know what happened, what methods you used to accomplish this change (or if you just cheated with the numbers). If not, then he will at least hopefully have more confidence into you and the methods you use.