Lean extremes

Posted on 13 Jun 2011 by The Manufacturer

In this article Jane Gray takes a look at different perspectives on what lean looks like when its trajectory has become warped or its focus too myopic. The article extracts below are taken from TM’s sister publication, Lean Management Journal, issue 08.

Lean manufacturing has become far and away the favourite methodology in the world for gaining efficiency and effectiveness in production, and for many other manufacturing business functions. But as with any management or improvement structure, focusing exclusively on lean techniques can be counter-effective, and some would say, through bitter experience, disastrous.

There is a great deal more to discuss about the dangers of lean ‘extremism’. Practitioners of lean in all environments should bear in mind, however, that, as systems-thinking advocate John Seddon is fond of saying, Taiichi Ohno rejected the codification of the Toyota Production System. Lean approaches are a part of the puzzle but the authors featured here would argue that an appreciation of broader system dynamics and alternative improvement methodologies will create a more balanced and robust end to end capacity for success.


Management by extremes

Bill Bellows, associate fellow at United Technologies’ Pratt & Whitney Rocketdyne and president of the In2:InThinking Network

This extract is taken from the introduction to LMJ issue 08.

Following discussion of the lean ambitions to eliminate waste and variation coupled with the “conflicted thinking” in continuous improvement, Bellows went on to say: “A wholesale ambition to achieve either zero or an infinite amount of something has consequences that can easily be more expensive to the system than the local savings achieved by well-intended work. Try applying the same attitude to eradicating fat (a common synonym for waste), what would happen to the world’s population of whales? Whales need fat for a reason; insulation. Without it they cannot function or survive.

At the opposite end of the spectrum we can see that extreme focus on infinite goals can be paralysing. Consider home improvement. A homeowner who hopes to profit from their property will not make improvements indefinitely. Instead specific changes are made to optimise for the market context.

Infinite improvement out of context will make the property unsalable and the owner’s hard work useless.

The extremism of zero and infinity as goals for the performance of products and processes extends from the focus of the elimination of waste and variation and continuous improvement to include a desire for zero inventory, zero cycle time, zero cost, and zero delivery time. I refer to this well intentioned bravado for achieving “faster-better-cheaper” as management by extremes.”


Lean without limits

Julian Wilson and Andrew Holm, directors of defence manufacturer Matt Black Systems

This article recounted a lean implementation project at Matt Black Systems which was undertaken in response to pressure from a customer.

The consequence of this was a singular focus on the manufacturing processes which affected the products of the customer in question.

“Our choices were constrained.

We undertook a cost benefit analysis and ended up with a plan for some easy and beneficial (sometimes both) projects. This plan was then introduced to everyone in the firm, both to educate and allay fears that the changes were simply a ploy to lose jobs, cut overtime or to make them work harder.

After 12 weeks we had we had rearranged work spaces, introduced new production tooling, working practices and test equipment, repaired and modified machinery and established a new visual management system. The consultants calculated that the benefits represented a saving of £100,000 per year, of which a significant proportion was attributable to the sponsoring customer’s product. The programme was deemed a great success and we were able to offer our customer the necessary price reduction linked to our savings.

Only we didn’t see this money appear on our bottom line.

Perhaps this was due to the costs of implementation; perhaps it was due to mistakes in our approach.

Whatever the case, the savings trickled away through a thousand unforeseen routes.

For example, new inspection equipment highlighted problems we never knew we had resulting in the need for more expensive parts from suppliers. Each unintended consequence like this didn’t add up to much in itself, but when combined meant we were no better off…

This is an effect of boundaries. Grand claims can be made about the efficacy of a project when measures are kept within tight boundaries, yet overall the benefits may be few. So it is with the bottom line. A lean project may make savings, but it’s difficult to squeeze these savings through the complicated systems of a business and see them appear intact on the bottom line.

Our advice is to beware the measures and boundaries that you allow to be set for a lean project, make sure they are not too narrow and that they reflect your wider goals. Lean tools often highlight more problems than they solve and these new problems quickly drift away from what is immediate. Like untangling a ball of string, it doesn’t matter what thread you start with, pretty quickly you are led to the heart of the tangle.

We all have problems we don’t know we have, some small and directly linked to the issues in hand, others more complex, systemic or even cultural in nature. The lean toolbox comes equipped with some great tools to help but again the issue of boundaries impacts on how much benefit you will gain from their use. If you bound your lean activity to discrete areas the underlying causes of the problems and therefore the symptoms will remain…

After our false start, we vowed to use the lean tools to dig deeper. This more profound approach took us down a very unconventional route as we looked to address our underlying dysfunctions and indirectly deal with the symptoms. It took time to develop this holistic approach, one that results in the lean techniques (and others) being drawn in by our people from wherever they can be found, but the results are far more enduring.

A quick search of the internet will reveal all the business improvement techniques you could ever want; the question is; why aren’t they being implemented in your organisation already? Our answers guided us in cutting away the hidden anchors within our organisation and we achieved much greater improvements in important areas like quality, delivery, profit and conformance- things our customers care about.

Going back to that original customer who sponsored our lean journey; we went from being one of their bottom 19 suppliers, to their second best global supplier in four years. The deep changes we made to our business means our improvement efforts didn’t stop with the official lean programme. Dozens of self generated changes take place every month as our organisation continues to innovate, optimise and cut costs as the world around us changes.

To anyone seriously considering embarking on a lean journey I recommend reading the seminal work by Taiichi Ohno, Toyota Production System: Beyond Large-Scale Production.

Reflect long and hard on the boundaries of their journey, not on the tools that were discovered along the way, for it is here where the secret of lean lies.”


Lacklustre lean

With a heavy focus on efficiency, lean manufacturers do not always appreciate the role of service within a truly lean system. This is despite value creation for the customer being the first lean principle.

In this article Chris Daffy explained to readers the benefits manufacturing companies can gain by incorporating approaches to service excellence into their lean programmes.

“Why is it that so many manufacturers make great products that are incredibly reliable, yet deliver a service experience that is flawed? We see this everywhere – a car that hardly ever goes wrong but a routine service experience that’s awful, a laptop that’s fantastic but a helpline that’s anything but helpful. It’s something that’s interested (and irritated) me for a long while.

I have a passion for helping organisations to deliver service excellence and, having worked with companies in many different sectors, over the past year or so I’ve had the opportunity to collaborate on service improvement projects with a variety of manufacturers and I think I now know some of the reasons why the anomalies between product and service excellence occur. I’ve also had the opportunity to test and develop what works.

I am convinced that the problems result from the way manufacturers naturally approach improvement projects.

They are usually highly skilled in the application of process improvement techniques, like lean and 6 sigma, so they understandably turn to them when confronted with the challenge of improving a service experience.

These approaches are undoubtedly excellent for what they were designed for, improving a process, but my experience is that they are nowhere near as good at improving a service experience; which they may have been adapted for, but were not designed for…

The opportunities for manufacturing businesses to use service as a source of differentiation and competitive advantage are I believe, immense; especially in today’s ever more competitive markets. It’s also a fact that in most markets, if one supplier gets a reputation for having a service experience that is substantially better than the competitors, it can lead to many other benefits. I would therefore encourage all leaders to investigate this and discover for themselves how they too could make service excellence a key element of their competitive strategy.” Daffy made clear in this article that: “The goal is not to replace the science-based approach [of lean and 6 sigma] with an emotional one, it is just to ensure that both key components [to efficient and effective organisational performance], competence and character, are given equal prominence and attention.”