Lean Is In

By Bizclik Editor

Lean systems promote problem solving to drive out waste, which is exposed by just in time flow, work that is triggered by pull from the downstream (customer) process and that is paced by customer demand. Inventory is reduced not only because of the costs associated with owning and managing it but because inventory acts to cover up weak spots in the supply chain. But once exposed, these weaknesses need to be either shored up or covered by redundant stock, systems, or resources. Since not all problems can be immediately solved, unless we accept that we allow supply chains to run dry from time to time, redundancy is a necessary part of lean systems, though never value-added or an end in itself.

NECESSITY OF REDUNDANCY

This may be a counter intuitive thought, but in fact, lean systems demonstrate many examples of the necessity of redundancy. Lean requires buffer stock inventory required to account for delivery lead time. It requires safety stock inventory required to account for delivery failures and losses. Within standardized work, recovery time built into a worker's cycle for repetitive operations to avoid fatigue. We could call this necessary redundancy. Using a skill matrix and cross training program to develop multiple people to perform the same task even when most days these skills may be "idle," is yet another example of built-in redundancy which adds no value but avoids the waste of system breakdown should there be an absence of a skilled person to perform the work. And the designer who convinced me that the time he spent walking around the office thinking and being inspired was not motion waste, but necessary secondary energy expenditure while his brain worked on the chief process of design.

Duplication of suppliers to insure competition, part availability or even multiple designs are also other ways of achieving similar objectives. The lack of this last type of redundancy in part design may have been a factor in Toyota's recent and expensive quality problems. According to an article titled, “Toyota’s Problems,” "...Highlight an often overlooked problem with its obsessive focus on hyper efficient supply chains." Namely, “Sure, fewer parts and fewer suppliers can drive down material costs and radically simplify operations. But when a strategic supplier of a critical part encounters a hiccup, it can have crippling and costly implications for the enterprise.”

The article goes on to make a "Darwin vs Kaizen" analogy:

Alex Blanton, an analyst at Ingalls and Snyder who has covered the U.S. industrial space for four decades, says that in this respect, companies that adopt Toyota's lean principles are ignoring the lessons of evolution.

"One of the ways Toyota has reduced costs in their lean program was commonality of parts," he said. "Well, if that part has a problem, then it affects many more models. If they'd been using a lot of different gas pedals for these models, and they had problems with one, they wouldn't have to shut down the company.

"That's why humans aren't lean," Blanton said. "It's a Darwinian thing. The purpose of fat is to carry you over periods when you don't have food."

SELF-SUSTAINING SYSTEMS

Perhaps in designing our supply chains we should learn from self-sustaining, low waste, renewable, solar-powered green systems that have persisted and improved continuously over geologic time. Ecosystems do not sub-optimize around the land, the organisms or the food, they are inherently stable. Ecosystems aren't global, they are exceedingly local. Ecosystems aren't lean, they are fit. If we want to imagine the future of industry, instead of lean manufacturing, which may suggest in black and white the notion that fat is bad regardless of the nature of the animal and its ecosystem, "fit manufacturing" is more appropriate. Just as there is no "best" or finish line in lean operations, we see no "perfect" creatures, only the "fittest" or well-adapted to the particular environment. As in biology, so in business.

Lean systems should not be implemented blindly or in ways that lack risk management. There are plenty of human, market and environmental factors to consider. The FMEA (Failure Modes and Effects Analysis) is a wonderful tool, but ironically it is seldom applied to the implementation of lean itself. Traditional change management attempts similar things but often without the rigor. Whether it is the steering committee that oversees and governs the implementation of major systems such as lean operations or disaster management at a national level, adequate planning is a must. Perhaps this too must wait for lean thinkers to enter public service.

Fitter means more fit, not necessarily more lean. There is no way to be "too lean" and be fit. If we are emaciated, we are no longer fit. We also need a certain amount of fat within any system to survive those natural disasters that are survivable. This lesson should be learned and applied more widely. Placed in an FMEA, the recent eruption of the Icelandic volcano may not justify a back up transport system from the point of view of frequency, though from the point of view of severity of impact it certainly may. I have friends in Europe who didn't make it home last week. Some took ferries home because they were stranded in one part of the Continent without clear air space. This would have been a good time for enterprising dirigible drivers to make a quick Euro and get on the map as the redundant air travel channel of choice. Perhaps next eruption.

Jon Miller a blogger and founder of Gemba Research LLC, was born in Japan and lived there for eighteen years. He is now an expert in lean consultancy. For more information on lean techniques, visit http://www.gembapantarei.com/about.html






 

Share

Featured Articles

Nirvik Singh, COO Grey Group on adding colour to campaigns

Nirvik Singh, Global COO and President International of Grey Group, cultivating culture and utilising AI to enhance rather than replace human creativity

How Longi became the world’s leading solar tech manufacturer

On a mission to accelerate the adoption of sustainable energy solutions, US$30 billion Chinese tech firm Longi is not just selling solar – but using it

How Samsung’s US$5billion sustainability plan is working out

Armed with an ambitious billion-dollar strategy, Samsung is on track to achieve net zero carbon emissions company-wide by 2050 – but challenges persist

UOB: making strides in sustainability across Southeast Asia

Sustainability

Huawei smartwatch goes for gold with Ultimate Edition

Lifestyle

How IKEA India plans to double business, triple headcount

Corporate Finance