Manufacturing Excellence: Lean and Sick

March 2, 2009
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Just in time (JIT) gave a new name to the Toyota Production System (TPS) and a set of good tools. However, I feel that the word lean undid all of that. Look what our economy has become: We are lean and we are sick.



In the mid-80s, I learned about the practice of just in time (JIT) from the best practices at Japanese companies. To me, JIT focused on responsiveness to customer needs by reducing waste and streamlining processes. It gave a new name to the Toyota Production System (TPS) and a set of good tools. However, I feel that the word lean undid all of that. Look what our economy has become: We are lean and we are sick.

We credit Toyota for lean principles, but Toyota does not call its system lean. It is called TPS. In fact, TPS is a system to strive for perfection in everything. It means doing the right things in design, production, sales, management and marketing-every facet of the business.

Looking back at the book, “The Machine that Changed the World,” I do not think U.S. manufacturers implemented lean in a way that benefited them long term. As a result, they are closing factory after factory, or asking for bailout money.

I am concerned because I see companies continually focusing on lean and then getting excited to see something moving in operations, almost in a kamikaze way. Lean has become more of displaying numbers, reorganizing the floor and such, but still most businesses shrink as there is little focus on customers and not much impact on growth. As a result, employees deploying lean will no longer be around. We don’t hear such horror stories from the originator of these concepts-Toyota.

How could our consultants, thought leaders and organizations not see it coming? Corporations continually must focus on profitable growth and creating opportunities first and doing everything as close to perfect in operations. We must raise awareness of global competition and ask our people to raise the performance bar without giving it some fancy, misleading or complicated name. Call it what it is, so it does not need additional training. If the concepts are not simple, we must question the intent behind the principles.

I believe that lean has created confusion and, in hindsight, was unnecessary because JIT already existed. I see too many big name schools used for some mediocre methodologies and executives jumping on the bandwagon seeking bliss, eyes closed, looking for the flight, and, of course, the obvious outcome-the fall.

We must question every methodology for its value, return on investment, employee perceptions, customer delights, corporate growth and new opportunities. We must question scorecards, lean, Six Sigma, innovation, business process management, management systems, and compensation methods for meeting their intents and helping companies do better in achieving profitable growth. We must think through any methodology for its short-term and long-term impact before deploying it in corporations.

Corporations cannot survive by managing for cost because no matter what we do, there will always be a lower-cost option. We should be working toward higher wages, not lower wages.

When Bob Galvin started Six Sigma, he started it concurrently across the board-in the CEO’s office, legal, accounting and manufacturing.

Corporations must be re-engineered fast with broad participation, not in boardrooms or in tall towers. Employees can bail out corporations much better than any amount of money. Leadership must concentrate on formulating strategy for profitable growth for all stakeholders, including employees.

I bet not only will the solutions and execution be the best, but if sacrifice is needed, it will be offered willingly rather than demanded. It will be teamwork of all employees, rather than just a responsibility of the leadership team.

We should use various tools for achieving perfection and reducing waste, but avoid big name programs. Running a corporation simply for Wall Street accolades will bring it to the ground. Wall Street frequently publishes the obituary of these corporations.

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Hope many read your article

Ann
March 3, 2009
Praveen, I think you've made some powerful points. I'd take it one step further: US companies haven't yet learned how to work with and develop their knowledge workers. We haven't learned that performance is more than the bottom line - it's also about human performance. We are looking for the quick fix, without regard to how we got where we got, without regard for the workers who are part of the equation of where we get, and by always choosing a solution before finding out the problem. We need to address real problems by doing analysis. Analysis that guides us to ways to resolve our situation, rather than choosing a solution--balanced scorecard, reengineering, etc.--that we try to layer over the problems that still exist.

Names

Mark Graban
March 8, 2009
Aren't JIT, TPS, and Lean just different names for the same thing? If companies are doing dumb things in the name of "lean" -- they are just dumb things. Dumb things weren't done in the name of JIT? What about companies got rid of all of their inventory when the process wouldn't support it? That was dumb too. You make a lot of valid points, but I don't think calling JIT/TPS "lean" is the root of all of these problematic implementations and bad things that companies have done.

Lean

Tom Kay
March 30, 2009
I think that the points made are valid with respect to the management du jour companies fall prey to. As mentioned in the 80's it was SPC, Quality Circles, JIT etc. etc.... In my opinion Lean, Six Sigma and other methodologies are collections of techniques that if applied correctly increase the probability of successfully solving a given problem. And yes it does require getting out and talking with and including the people working on the shop floor. The key for management is to understand and have folks around that can apply these techniques and be very honest with themselves about what they can and can not deliver. One last thought, the comments offered about the importance of the costumer are right on.

Lean and Sick

Praveen Gupta
April 1, 2009
Thanks for all your comments. Let's stay waste free and grow for creating new opportunities for everyone! Let's just be the best! Praveen

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