Is Lean the answer for manufacturing? Or is it just the latest flavor of the month peddled by management gurus? We interviewed experts in the field to find out:
Lean manufacturing, which had its origin in the Toyota Production System (TPS), is built around getting rid of waste — defined as any activity that does not add value (whatever a customer will pay for) to the product. Taiichi Ohno, father of TPS, identified the Seven Wastes (muda, in Japanese) — defects, overproduction, motion, transportation, waiting, inventory and processing — that TPS works to eliminate. But there is much more to Lean than that, says Mike Kuta, Managing Partner at Productivity, LLC.
“Lean is made up of just-in-time; TPM, which is total productive maintenance; STS, which is socio-technical systems or high-performance workplace; TQM, total quality management; and I would throw in …Six Sigma, variation reduction,” and Lean is not complete without including elements of all of these. “Most people don’t understand that,” he says, “and they pick and choose.”
Lean and the Toyota Production System
While Lean Manufacturing came out of TPS, some have suggested that Toyota’s recent troubles show that TPS and Lean no longer work. Others counter that the Toyota had, in fact, abandoned — or forgotten — essential elements of TPS. An argument can perhaps be made that the such systems seems to work best when order flow is predictable and does not increase rapidly — which can be traced back to Henry Ford’s original manufacturing system, which worked well when the product mix was narrow but did not respond well to rapid changes in business conditions, as shown by the company’s late and badly-handled changeover from the Model T to the Model A.
Jamie Flinchbaugh, co-founder and partner of the Lean Learning Center, feels that Toyota’s troubles are not an indictment of TPS itself. While Toyota may have lost track of something in their supply chain that caused their pedal issues, he says, “If you look at it in context of everything that have to do to be who they are, it’s amazing that they haven’t made a mistake of this magnitude in the past” — a sentiment echoed by Toyota president Akio Toyoda in prepared testimony for the House Committee on Oversight and Government Reform, February 24, 2010: “Quite frankly, I fear the pace at which we have grown may have been too quick. I would like to point out here that Toyota’s priority has traditionally been the following: First, Safety; Second, Quality, and Third, Volume. These priorities became confused, and we were not able to stop, think and make improvements as much as we were able to before, and our basic stance to listen to customers’ voices to make better products has weakened somewhat. We pursued growth over the speed at which we were able to develop our people and our organization …”
All of which suggests, says Kuta, “that their systems, their policies that govern how they do things… they’re all subject to that social network that’s necessary to maintain and sustain them. It comes back again to what is Lean. Lean is all about building capabilities and learning, so if you don’t surround yourself with the people that have the capabilities to govern the policy then you’re going to get in trouble. I believe that’s what happened to them.”
People, and their wisdom and experience, are an essential component of any production system, Kuta continues. “The Toyota Production System is an outcome of the past 60, 70 years of a series of management practices, and the ability move from a current best practice to a new best practice,” he says. “It’s through tribal knowledge, it’s through working there, it’s through sensing and it’s through witnessing and having the opportunities to practice.”
Obstacles to instituting Lean practices
Lean manufacturing is known to be a good thing, so you’d expect everybody to embrace it when it’s offered, but that’s not what generally happens. The people most directly affected may think of it as either:
- A scheme for laying some of them off,
- A way to make them work harder for no more pay
- A boondoggle that will cause disruption for a while, and then be abandoned like so many other initiatives.
Or all of the above. Remember, the average manufacturing worker is 53 years old, and most have seen management initiatives come and go, like MBO, TQM, the customer service revolution, the Deming System, Reengineering, Knowledge Management and the list goes on. “They’ve learned,” says Kuta, “that if you wait long enough it will go away. This, too, shall pass.”
The three main things needed to make it work are, he says, are articulation, management and focus.
Articulation means “you have to be a good story teller,” says Kuta. While sales and marketing people may be good at story telling, operations people tend not to be, and find it difficult “to articulate the difference between cost down and capabilities up.” So rather than talking about building capability, they tend to talk about “standard cost reduction programs and do these things that we’ve always been doing.” And that doesn’t get the job done.
Next comes management. “We still are very impatient,” says Kuta. ‘We still think to a large degree in the short term, not the longer term, and all managers are driven by performance, by metrics, by measures. And frequently those measures do not support the longer term capability-building that we’re trying to do. So management becomes very impatient and what they want is the perfect videotape or the prefect blueprint on how to do all these things.” And there is no such thing.
Flinchbaugh agrees. “We’re going around trying to apply sophisticated tools to these things, and we haven’t either thought about or made clear to people where it is we’re going or what it is we’re trying to accomplish.” And without clear direction, “we get scattered, and we waste a lot of time and energy going in different directions,” he says. “A lot of energy gets expended and very little progress gets made.”
The third is focus. “There are so many different workplace initiatives today that organizations have employed that they do tend to lose focus,” says Kuta. “Leaders have a tendency to jump from thought to thought to thought,” says Flinchbaugh. “I’ve been through Total Quality Re-Engineering, Lean, Six Sigma, and now Lean Six Sigma, and while they’re all based on the same tool sets, we have a tendency to leap from one to the other to the other,” he continues, “I have found that it’s difficult for leadership to maintain the course.”
And those other initiatives — like SAP implementation, ERP implementation, refining MRP — don’t go away when you start with Lean, and they dilute attention and resources, says Kuta. Managers, he says, tell him “what we really don’t have any time for right now is Lean. We’re already resourcing all these other initiatives and we just don’t have time to do it.” In truth, he counters, all these things “overlap and reflect and build off of each other and all support each other,” yet with poor project management they don’t, and nothing gets done. It’s better to do a few things well than many things badly; “I believe firmly that no organization can do more than three or four things at any given time and do them well,” says Flinchbaugh.
But don’t blame it all on the boss, says Flinchbaugh. In many organizations someone who is nominally a leader ends up devoting less than half time to actually leading; the rest goes to other things. “Rather than spend my day thinking about being a leader I’m spending my day worrying about nits and gnats and costs, and paperwork and what my boss thinks, etc.,” he explains. “It’s difficult to focus on leading, which is my job.”
And on top of all that there will be those who actively resist the new methods, “the people that we would call blockheads or cement heads,” says Flinchbaugh. “The whole organization knows that those people are there and resisting change,” he says, “and they’re waiting for you to do something about it. And when you don’t, they don’t believe you mean it. So they go about their business.’
So how long can it take to implement? Think years, not months, says Flinchbaugh. “I’m working now with a company that comes out of Charleston, SC that’s in their ninth year of doing Lean, and still plugging along, and doing extremely well as a result.”
Lean and Six Sigma
In 2005 ThomasNet News reported on a survey by the executive search firm Avery Point Group that found that Internet searches and job postings for Six Sigma outnumbered those for Lean by about 50%. Yet by 2010 things had changed, with the same firm reporting “[l]ean talent demand now clearly outpacing Six Sigma by a substantial margin as the new prevailing force in corporate continuous improvement.”
Yet Lean and Six Sigma do not compete — as stated above, Kuta considers Six Sigma to be part of Lean. “You can’t get lean without Six Sigma,” he says, “but Six Sigma isn’t the first thing that you do.” Perhaps the best way to look at them, he continues, is that “Six Sigma is a strategic tool that plays a very important role in process variation reduction. And Six Sigma tends to be driven from project to project, where Lean, as the umbrella, is the systemic process that deals with time.”
To get a good handle on all aspects of Lean manufacturing and how to implement it, our interviewees suggested a short list of books:
- Jeffrey Liker: The Toyota Way
- Masaaki Imai: Gemba Kaizen: A Commonsense, Low-Cost Approach to Management
- James P. Womack: Lean Thinking : Banish Waste and Create Wealth in Your Corporation
- Dennis Hobbs: Lean Manufacturing Implementation: A Complete Execution Manual for Any Size Manufacturer
- Thomas L. Jackson: Corporate Diagnosis: Setting the Global Standard for Excellence
- Stephen A. Ruffa: Going Lean: How the Best Companies Apply Lean Manufacturing Principles to Shatter Uncertainty, Drive Innovation, and Maximize Profits
One more thing: To keep up with the latest thinking, Mike Kuta recommends regular reading of The Harvard Business Review and the MIT Sloan Management Review. And, he adds, don’t forget the Internet. Where, incidentally, you can find an introduction to Lean practices in the not-so-new but still good IBM white paper “Bringing Lean Strategies to the Process and Hybrid Industries,” by Filippo Focacci and David Simchi-Levi.
My thanks to the following for their help with this article: Mike Kuta, Managing Partner at Productivity, LLC, who made two presentations at the VMA Manufacturers Workshop in Waterloo, IA in April: “Establishing and Managing a Culture of Improvement” and “Managing a Lean Supply Chain;” Jamie Flinchbaugh, co-founder and partner of the Lean Learning Center, whose presentation was entitled “Tactics of Lean Innovation: Improving Your Lean Transformation;” and Ken Branco, principal at the consulting and training firm R.E.V.V. International, who presented “Moving Beyond Concepts: Starting the Lean Transformation.”