Is There a Future for Lean? (Nov 17, 2007)

Is There a Future for Lean? (Nov 17, 2007)

We often get asked, “What’s beyond Lean?” or meet managers who say “When we started doing Lean we were way ahead of the pack. But now our competitors are doing it too, so how do we get back in front?”

What this tells us, is some people believe just using Lean tools makes them Lean, and if that’s so, then they’ve missed a key point. Initiatives like Lean and Total Quality are slow and steady approaches based on the principle that doing the right thing at the right time will lead to greater value.

The fact is that Lean has been approaching something of a crisis for quite awhile. Operations people continue to drive the effort, but business managers, with responsibility for making profit have lost faith because they can’t see results on the bottom line, and they don’t have the thirty years it took Toyota to beat the competition. They need more money NOW.

Your gut feeling will tell you that reducing waste and saving time have to be good. Right? Shutting the machine off when you’re not using it reduces the utility bill. More automation reduces direct labor cost. So where’s the “disconnect” with profit?

But think about it. Does a lower utility bill really have visibility in the overall cost? Did we shed direct labor when we hired automation engineers to support the new robots? Did that project solve an obvious difficulty that needed to be solved right now? If the answer to questions like these is “no”, then there’s your disconnect.

If we assume a solution, or even pick the Lean tool to solve a problem, before viewing that problem in its business context, then we’re going the wrong way. To avoid disconnect, look for the immediate, accurate match between a business unit goal and your Lean project, and if you can’t find one, forget it.

The good news is, that if you laser target an explicit business objective with every Lean initiative, every time, you will see the bottom line results, and fast. But if you haven’t established that direct relationship between your project and that objective, then you shouldn’t be doing it.

It turns out that running your business by rules of thumb like, “more efficiency means less spending” or, “lower inventory means increased cash flow”, is just plain dangerous. Because if you’re not addressing the most pressing issues facing the business right now, then you’re the one wasting time and resources.

Making that connection consistently is a talent we must add to our skills list with a matter of urgency.

Oh, Lean has a future all right, but only if we to do it with the “paranoia” of making sure that every project has that one-to-one match with the achievement of a clearly stated business objective.

James O’Sullivan

Menawat & Co. Ireland