[This post is an excerpt from my article “People at the wheel – Volvo’s lean journey” co-authored with Ebly Sanchez at Volvo, and freshly published in the Lean Management Journal.]

A fundamental lean transformation, leading to sustained continuous improvement and improved business results, are always produced by the most valuable resources all organisations already possess: PEOPLE. Far too often, companies radically underestimate the role of people while overemphasizing tools and methods. This lack of connecting the appropriate focus on people and a holistic learning process with the implementation process creates a false start, leading to both overspending, lower-than-expected effects, union conflicts, and lower credibility of the lean transformation process.

Based on our industrial and theoretical insight, we uphold that the more high-tech, high-value and customised the production gets, the more important the role of people will be in the lean transformation. We see this in the Volvo Group and elsewhere in industry. Thus, we argue that focus on people involvement and people development is the single most important factor for successful implementation of lean in the high-customisation industry. Production of customer-specific and high-tech products requires much higher levels of flexibility in the technological and organisational set-up and more advanced human capabilities than repetitive mass-production.

A Volvo Truck outside the Volvo Trucks New River Valley plant, VA, USA (c) betteroperations.com

Volvo believes that building attractive work places is much about building people capabilities. If people are involved and allowed to learn, they will be pleased to help improve their work places and increase the competitiveness of their employer. The idea is to spread the thinking before the tools. Therefore, Volvo launched a new capability growth strategy in 2011 that will accelerate the implementation of the Volvo Production System (VPS) by focusing solely on increasing the knowledge level around the world through extensive training and education.

In conclusion, Volvo builds on the Scandinavian tradition of people involvement, people development and team building to succeed with the VPS globally while retaining the need for local solutions. We do not pretend that we have the solution for all types of lean improvement issues in industry; however we do believe that having an autonomous team with the correct implementation capabilities will be the single most important factor for successful lean transformation in mass-customised industries. Knowing that “high-tech”, “high-value”, and “high-customisation” is foreseen to be the attributes of the future high-growth industries; we dare to claim that the Volvo Way is the future way!

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Further reading

Read the whole story in: Netland, T. and E. Sanchez (2012). “People at the wheel – Volvo’s lean journey.” Lean Management Journal (March): pp,35-36.(www.leanmj.com –subscription needed).