Lean over backwards

Manufacturing News, Source : British Industry
Published : 16 Oct 2002 8:48

MARTIN ASHCROFT reports on Manufacturer 2002 - the management expo, where the lean debate dominated the agenda, but where investment and the euro would not lie down.

My only problem with Manufacturer 2002 - the management expo, was how to be everywhere at once. Four Masterclasses were presented simultaneously and there were interesting talks in the auditorium, not to mention all the stands exhibiting the talents of consultants, universities, government bodies and IT applications experts.

Before we had to make a decision on our priorities, however, we had the launch of the Manufacturing Alliance to set the scene for the event. This took the form of a breakfast debate, chaired by the BBC’s John Humphrys, which took its agenda from the results of the Manufacturing Attitudes Report, the latest original research from Conquest Business Media’s Manufacturing Research Centre.

The report had revealed that there was widespread support within UK manufacturing for early entry to the euro (nearly 60 per cent), yet there was still a hardcore who said the UK should never join (20 per cent). Hardly surprising, perhaps, as the Annual Manufacturing Report published in June had shown that 60 per cent of UK manufacturing exporters supplied to the eurozone. Those who don’t, of course, have a different agenda.

The distinguished panel seemed less concerned about whether or not the UK adopted the single currency than they were about the Government’s prevarication on the issue. Professor Dan Jones, from Cardiff University’s Manufacturing Centre, commented that the euro was “less of an issue when the exchange rate is favourable, but entry would remove the uncertainty from investment decisions.” Ron Egginton, deputy director of the DTI responsible for the Manufacturing Advisory Service, maintained, however, that “inward investment is good right now. Foreign owned companies invest more in the UK than UK owned companies do.”

The lack of investment by UK manufacturers had also been highlighted in the Manufacturing Attitudes Report, but there was cautionary advice from both panellists and contributors from the floor. Panellist Clive Grinyer, design director with the Design Council, stressed that it was innovation and value that counts. Anand Sharma, president of TBM Consulting, commented from the audience that capital investment did not bring innovation, it just made you faster. Panellist Bob Pendlebury, group engineering and research director of JCB, backed this up. “Only one person can be the cheapest,” he said. You might save 10 per cent by operational improvements but a new widget could deliver 30 per cent.

If investment in R&D is to provide the next competitive edge, however, where will the money come from? The message which many of the delegates had come to hear, was that you can make it yourself, through what you save by becoming more efficient. They were not disappointed. Lean manufacturing dominated the event and the lounges were buzzing with lean talk during coffee breaks and lunch. Many of the delegates thought they had adopted lean techniques already, with cell manufacturing, kanbans, JIT and the like, but most of them were shocked to find they had only scratched the surface.

John Drew, of McKinsey and Company’s Production System Design Centre, led a session on the sustainability of change programmes. Why do they often fail after the adrenalin runs out and the consultants have left? He separated lean into three elements; the operating system, the management system and the mindset. “What you keep is the technical element,” he explained. “What you lose is the behavioural effect. A lot of lean is about changing behaviour.” Tackling behavioural change at the beginning, he said, would prevent many of the problems. It’s easy for a workforce to get ‘initiative fatigue’ or the ‘bohica’ syndrome (bend over, here it comes again). But you don’t have to see scepticism as a negative phenomenon, he observed, because it forces you to take action rather than make assumptions. “Many change programmes don’t change anything for the front line people,” he said. “Line managers have to make it a way of life. Real change must be demonstrated.” It’s easy to misinterpret scepticism, too, he pointed out. Many of those we see as sceptics are not resistant to change, per se, but need to know why it’s necessary and how it will work. To help them take it on board, incentives have to be aligned with how you want them to behave.

Anand Sharma’s Masterclass reminded me of a workshop of his I had attended a few months ago, where a group exercise had delegates producing wooden widgets in a simulated factory. The original production system was enormously wasteful, with parts moving long distances between processes, bottlenecks at some workstations and others waiting for materials to arrive. After a short discussion, we soon straightened out the assembly line and produced widgets much more quickly, with half the number of operations (and hence, people).

I could see how our improvements would benefit the company, but I was concerned, I told Sharma, that I’d just helped to rationalise myself out of a job. “No you haven’t,” he said, “because I’m going to give you something else to do.” This is where Sharma’s organisation differentiates itself - they make their clients promise not to make redundancies after they have implemented their lean techniques. All the resources released are redirected into taking the business forward, through new product design, sales and marketing initiatives, training and continuous improvement.

While lean seemed always to be in the conversation at the expo, it was by no means everyone’s complete solution. Professor Mike Sweeney of Cranfield University led a Masterclass which looked at the limitations of lean as well as its advantages. Having developed in the automotive industry, lean is best suited to manufacturers who can predict their demand, said Sweeney, and in the right place it can have astounding results. Nissan, for example, achieves 40 stock turns a year on a 10,000 component car. “But if demand rises, they make you wait.” If you are in a highly unpredictable sector, he concluded, it’s agility you value more highly than leanness. This message was endorsed by Joe Booth of management consultants Stratabridge. “Responsiveness should not be confused with leanness,” he said in his presentation in the auditorium. You need to design your supply chain around your circumstances, taking into account whether your products are high volume or low volume and how predictable your demand is.

As well as the Masterclasses and the excellent presentations, delegates had the much-needed opportunity to meet representatives from various government bodies and agencies. The DTI undoubtedly has much expertise, many well-meaning initiatives, and not a little money to distribute to the worthy, but it’s never been easy to access. Knowing which agency to approach is the first stumbling block. But the presence of the Learning and Skills Council, the Manufacturing Advisory Service (MAS), Trade Partners UK, Business Link, UK Online for Business and representatives from Regional Development Agencies helped to put this in perspective.

If you were at The Manufacturer 2002 in Telford on 25 or 26 September this year, you will know how valuable it has been. If you weren’t there this year, and you want to stay in business, don’t miss next year’s event.

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